Should I Grow my Solo Therapy Practice into a Group Practice?

Written by on May 3, 2012 in Practice tips - No comments
woman by the psychologist

By Anthony Centore, MD

Benjamin Franklin is known historically for his disciplined schedule. His personal notes show that he was asleep at 10 p.m., awake at 5 a.m. – and he spent most of his waking hours working or reviewing his tasks. Starting a counseling practice isn’t a 40-hour a week job. Successful entrepreneurs either “do the Franklin,” or burn the midnight oil – or both! This is because an aspiring counselor-entrepreneur must stay abreast on the practice of counseling while learning (and executing) the myriad aspects of running a business (e.g., enacting a business plan, managing finances, setting up an office, marketing, etc.).

After a year of hustle…

Once you’ve “done the Franklin,” for about a year, you’ll notice some changes. Your phone is ringing and your caseload is quickly filling! People will tell you that they’ve read your articles, or saw you on the news, or heard you speak somewhere. New clients will inform you that another client, to whom you provided great care and service, referred them!
If all goes well, at some point in year two your caseload will reach 35 sessions a week. At 35 sessions, you’re with clients 26.25 hours a week. You’re spending 13.75 hours a week on clinical notes and your one-office company is well-managed. You’re now working a comfortable 40-hour weekly schedule and bringing home net earnings of six figures a year.

Now that your private practice is thriving you have options. You can either…

Stay small

While nothing needs to change, there are several options for your small practice to consider.
• Should you hire administrative help? Perhaps there are some tasks you wish to delegate: reception and scheduling, billing, bookkeeping, or general office upkeep. Hiring additional staff can sometimes be done without reducing you net profit. If a counselor earns $65 per clinical hour, as long as the new employee costs less than $65 an hour, and completes their tasks efficiently, an increase in the counselor’s caseload could compensate for the administrative costs. This approach won’t reduce the counselor’s workweek, but it will allow them to trade administrative tasks for clinical work.
• Should you raise your rates? If your caseload is full and you’re turning clients away because you’re too busy to see them, you may have the luxury of raising your rates. This is supply and demand: There is limited supply of you, and there’s overwhelming demand of your services. By raising rates you will reduce demand—so finding a balance is important. Don’t overdo it! Raise prices slowly and only for new clients. Or you could raise rates for the most desirable appointment times. Note: If you accept insurance, you will need to provide services at your contracted rate. However, one can reserve premium times for the highest paying insurance companies, or block out some times for cash-only clients.

Grow larger

Perhaps, after years of counseling, you decide that spending the majority of your workweek in session with clients isn’t for you. Or, you decide that you want to capitalize on your practice’s extra client leads, without raising prices. A desirable option may be to bring on another counselor.
• Should you add another counselor? Bringing on a counselor to work in your practice is a big decision (and responsibility) as it involves much more than funneling surplus client leads. For many, to execute this well, one will need to transition from clinician to full-time manager. In addition, counselors expect a lot in exchange for a split of their session fees. Traditionally, a practice will provide:
Office space: Two counselors sharing one office won’t work. Even if one counselor is part-time, there will be scheduling conflicts during the most desirable session hours.
Ample leads: The attrition rate for clients is around eight sessions. Therefore, a counselor needs over four new clients a week to build and maintain a full caseload.
Billing / credentialing: Reliable, timely medical billing is crucial. Also, even if a counselor is previously paneled with insurance companies, additional credentialing is necessary to allow him/her to bill through your practice.
Reception and scheduling: Counselors expect a high level of administrative help. Printing forms, ordering supplies and other office tasks are often the responsibility of the practice.
Insurance: To recruit great counselors, consider a 50 percent split on health insurance, and 100 percent of professional liability insurance.
Community: Counselors often wish to be part of a community, and even seasoned clinicians expect the practice to offer some clinical supervision.
Changing from a solo practice to a group practice isn’t a minor alteration; it’s the start of a new business (with more risk and more reward). Get ready for an exciting journey, and to again “do the Franklin!”

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