Editor’s Note: July/August 2007

Creating a Private Practice for the 21st Century

Magazine Issue
July/August 2007
Editor’s Note: July/August 2007

Those of us old enough to have practiced during psychotherapy’s Eden, before the managed care revolution, remember that all a private practitioner needed to do to make a good living was hang a framed degree on the wall, furnish a pleasant office with a couple of comfortable chairs, install a tasteful piece of art or two, and wait for the customers to come. When people showed up in our offices, we talked with them about whatever happened to be on their minds, and we did it once, even twice, a week, possibly for years. Best of all, the crass subject of money rarely came up–it didn’t have to. With any luck, generous reimbursement checks from the insurance company showed up as regular as clockwork.

Every therapist who hasn’t been in a coma for the past two decades knows, at least theoretically, that those days are long past. But just how far past comes as a shock even now. According to the sobering statistics Lynn Grodzki cites in her article, “Harnessing the Winds of Change,” the average licensed full-time therapist currently makes a net profit of only $30,000 a year, due mainly to the erosion of the private-pay market and the staggering shrinkage of reimbursements funneled to mental health services from managed care–from 10 percent of all health insurance dollars in 1982 to 1.5 percent today. Managed care fees make up 43 percent of the average clinician’s income, and they haven’t risen in a decade. To make matters worse, it seems that the poorer we get working with managed care, the more we depend on managed care for the referrals we get! Indeed, as Grodzki writes with fine understatement, the relationship between private practitioners and insurance companies “has become abusive.”

So, what does a psychotherapist do when a client is addicted to a dangerous substance or involved in an abusive relationship? They help him or her kick the habit. And, if the client is being abused, and the abuser won’t clean up his act, they help the client dump the bum. Similarly, writes Grodzki, we have to stop the abuse and the addiction, and the only way to do that is wean ourselves from managed care. How? We need to redefine our profession, drop the outmoded (and ill-fitting) medical model, and openly take up a consumer model of psychotherapy, in which we offer market-based, buyer-attracting services. Further, we need to take the huge leap and rethink ourselves and what we do, drop the idea that we’re initiates of some quasi-religious calling, and begin acting like honest entrepreneurs. Finding our inner entrepreneur, Grodzki suggests, won’t lead us away from our core professional values, but will actually help us fulfill them.

It won’t be easy. We’ve heard it before–if we want to succeed as good therapists, we also have to become good businesspeople–but it’s an idea that strikes fear and loathing in the heart of many a therapist. As Joe Bavonese writes in “How to Develop a Money Mindset,” when he tried helping other therapists use investing and marketing skills to grow their practices, his attempts were not always met with teary-eyed gratitude. One therapist responded with outright horror to his suggestion that she take a few baby steps to promote her practice: “Promoting myself? Why, it’s just . . . so icky!” But all the knowledge and skill required to become successful in the business of therapy can be learned. His article describes his own odyssey from fearful, resentful neophyte in the business world to excited convert to confident success story.

The very thought of becoming businesspeople, as well as therapists, tends to instill the kind of fear and defensiveness in us we see so often in our clients. But we need to realize that doing what it takes to become successful entrepreneur-therapists won’t just help us achieve economic security, it’ll enable us, once again, to practice our profession with the kind of independence and integrity that good therapy is really all about.

Rich Simon

Richard Simon, PhD, founded Psychotherapy Networker and served as the editor for more than 40 years. He received every major magazine industry honor, including the National Magazine Award. Rich passed away November 2020, and we honor his memory and contributions to the field every day.