Business Basics for Private Practice

A Guide for Mental Health Professionals

Anne D. Bartolucci

• Publisher: Routledge
• Year: 2017
• ISBN:
  9781315472034
• Edition: 1
• Topic: Psychologie
• Subtopic: Santé mentale en psychologie

Business Basics for Private Practice is a step-by-step guide to developing a successful practice from initial conceptualization and business plan to future growth for the true entrepreneur. Dr. Bartolucci draws from interviews with fellow mental health practitioners and experts in business-related fields to make even the most intimidating parts of practice easy to understand. Business Basics is written to give the feel of mentorship, and the author talks about lessons learned the hard way. She's also included checklists and worksheets to help you stay organized and ready to meet the challenges of opening a private practice.

Nuts and Bolts

I

Planning for Success

1

I was recently at the American Academy of Sleep Medicine conference, where a colleague of mine was relating to me how he had moved to a new city in the Southwest because his wife had found a great job there. He’d found a position with another practice but once he arrived, he realized their expectations were not in line with his life/work balance values, so he decided to start his own private practice. The shocked expression on his face as he related how much he had to do before he even opened his doors mirrored my own, which I remember well. We may have been on opposite sides of the country, but our experiences were similar. This book is for people like him who need a step-by-step guide for what to do and when to do it.

In this chapter, we’ll go through the initial decision-making process and talk about a step that a lot of psychologists—including myself, I’m ashamed to say—tend to skip: writing a business plan. While it can seem intimidating, it’s a good place to practice switching between the therapist mindset and the businessperson mindset. In order to have a successful private practice, you need both, and it’s useful to be able to shift between them as needed.

Types of Practice Structure

Television shows typically depict psychologists and other mental health professionals in their own space, sometimes with an administrator, but generally on their own. In the 1980s television show Growing Pains, the father character, Alan Seaver, was a psychiatrist with an in-home practice. Bob Newhart is another example from an even older era (sorry, Mom and Dad, he’s not that ancient, really) and he, too, is shown in what we picture as a typical office structure and space for a solo practitioner. However, this is just one type of practice; you have many options. Each practice structure has its pros and cons, and the one you choose will depend on how much control you like over your environment and finances. That sounds ominous, doesn’t it? Don’t be frightened—there’s a practice structure for every kind of personality. Although there are as many types of practice as there are people who have creative ways of putting them together, I’m going to focus on some of the main ones. This is by no means a comprehensive list, so if you do come up with a different type, please tell me! I’m always happy to learn.

The Solo Private Practice

In my previous practice, each morning when I came in, I would unlock the door to my office if my administrator hadn’t beaten me to it (she typically did—at least one of us is a morning person), turn on the lights and white noise machines, and check messages. I’d look at my calendar, to see if there were any cancellations, and make adjustments. I’d log in to my insurance clearinghouse site, download Explanation of Benefits (EOBs), and enter payments in to my accounting software. If I had time, I’d pay bills, and if needed, order office supplies either then or at lunchtime.

Oh, wait, I still do most of that stuff, although I’m hoping to delegate some of it as the practice grows and it gets too overwhelming. But for now, I’m still essentially a solo practitioner, so the control—and responsibility—of the office is mine.

If you have a very independent streak and are considering private practice because you don’t want to work for anyone else, or if you want as much control over your environment, business, and schedule as possible, solo independent private practice is for you. The main advantages are not having to answer to anyone, flexibility to try new things, and creating the environment according to your standards and preferences. This goes for the big things like paint colors to the small things like whether you have a water service or whether you have to haul 5-gallon plastic jugs to the office from the grocery store every week.

Yes, I used to do that. I don’t anymore since I now have a water service.

One of the major disadvantages of solo private practice is that it can get lonely. I’ve found myself missing the collegiality of having another provider in the office, someone who speaks the same language of mental health, and the opportunity for on-the-fly consultation or commiseration, as the case warrants. If you’d prefer having someone more available to consult with and to share the financial and other responsibilities, consider looking into the next practice structure, space sharing.

Space Sharing

In a space sharing arrangement, the practitioners split the costs—rent, administrative, utilities (if applicable)—of a space while maintaining their own private practices. Sometimes they go under one umbrella name, whereas at other times they maintain their own practices and businesses.

When I started my private practice, I joined a group of psychologists and psychiatrists who shared space in a seven-office suite in a Class A (top tier of office space—see Chapter 3) building in an area called “Pill Hill,” near three major hospitals and several medical offices. We were under the umbrella of the larger practice with our own cards from that business, but for tax purposes we were all incorporated separately and had our own businesses. We paid rent to the central practice, and in return got space, access to the copier, office supplies, and administrative help. Since I didn’t have a book like this, it was really helpful to have other practitioners who had been through it all before to ask when I came up against a challenge with regard to business or patient matters.

Being in a group practice can facilitate the referral process. Not only do the practitioners within the group refer each other—for example, I used to get referrals from my colleagues for patients with sleep problems—but when someone called the practice who didn’t have a specific doctor in mind, the office manager would match them up or assign them to the next doctor on the list. The flexibility in this arrangement allows for all sorts of interesting cross-referral combinations, for example, a psychologist with a dietitian or other compatible allied health professional. I’ll talk more about this in Chapter 10.

A disadvantage of this type of arrangement is the lack of control over certain aspects of the business. For example, one tiny thing that bothered me was that I didn’t like using yellow-lined pads for psychotherapy notes, but they wouldn’t buy white ones for me. I had to get my own. Also, I knew I would eventually want to expand my business and take on other health psychologists, but I couldn’t do it in that office because there simply wasn’t enough space. After I left, the practice ended up having to move, and while I’m sure the two main partners asked for input, it’s not something the others had planned for or might have wanted to do. I’ve also heard of other practices where providers were left having to scramble for space when the principal decided to retire.

Embedded Practice

In this case, the practitioner is housed in another larger practice but still maintains their own business. For example, many health psychologists are ­embedded in a medical practice. The major advantages of this type of arrangement are that the main practice can handle scheduling and possibly billing, and being in the space facilitates referrals, specifically the “soft handoff,” where the medical or other main practice provider can walk the patient down to the practitioner’s space and introduce them. This increases the chances of the patient following up with the practitioner.

The major disadvantages of embedded practice are limited office hours, unless other arrangements can be made, again lack of control over the environment, and the fact that if the medical practice is housed in a high-rent area, the practitioner has to pay commercial rates in order not to be in violation of the law. Then there is the share of the administrative costs and the other potential expenses that may not be included in the rent.

Partnership

I saved this type of private practice for last because I highly recommend that you engage in space sharing before committing to a business partnership. Going into business with someone is kind of like dating—you’re typically not going to become engaged unless you really know them. One business mentor I know recommends working with someone for at least two years before offering them partnership, and I agree.

In a business partnership, you’re both or all part-owners of the business, and you share the responsibilities, costs, and profits. This means that major decisions need to be undertaken and agreed upon by all involved. There’s definitely a certain level of maturity required and respect for the needs of everyone, both personal and professional. Again, this is an area where I would recommend outside consultation and mentorship to make sure the business agreement, and contract arrived upon, is fair to everyone.

The Business Plan

When I first heard of the concept of a business plan, I was somewhat taken aback. Isn’t the plan to make more money than you spend so you can pay yourself and your bills and save up for unexpected expenses and retirement? The truth is, it’s not that simple. Just as we need ways to measure our clients’ progress, we need to have a map for how we’ll know our business is successful and when it’s time to change strategies.

Looking at other books on private practice, it’s apparent that business plans, just like assessment instruments, can be as simple or as complicated as you’d like. I don’t have much patience for paperwork, so my thought is that the simpler it is, the more likely it is you’ll make one and keep up with ­reassessing it. There are many online classes and resources, free and paid, if you want more guidance with your plan. The Small Business Administration is also a great resource here.

One thing I’ve done that I found helpful was to take a course on strategic planning, which was aimed at writers. Strategic planning can apply to anyone, not just writers, and the most beneficial part was to help me define my mission statement for both my careers. When you’re drafting your business plan, you might find it helpful to define your own mission statement and values as a guide before you start.

What is a mission statement? It’s a statement of what you do and how you do it. Think first about how you want to make a change for your clients and in your community through your practice. Then find the part that you’re passionate about and hone in on that. For example, my mission statement is to help my clients (and readers) see the world and themselves in a new way [that’s the what] by releasing unreasonable expectations and coming to a more mindful, compassionate view of themselves and others [that’s the how]. I’m passionate about helping people release unrealistic expectations and to be more compassionate with themselves. With that in mind, I found it easier to define my business, and, more importantly, my vision for it. As you’ll see, my mission statement is flexible enough to accommodate whatever direction I choose to take my business in the future.

Flexibility is the ke...