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Psychotherapy Private Practice: Should You Be Free Of Managed Care?

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Author: William Morgan

Today a mental health practitioner in private practice faces this choice: Either work under contract for a profit-driven managed-care company and accept whatever fees and conditions they decree, or find clients who are willing to pay out of pocket for high-quality services. Therapists can consider operating outside of managed care, and set up a private-pay based practice. Here are some things to think about.

As you will soon find in the following paragraphs, I believe it is possible as a therapist to help people and make a good living while enjoying an enviable lifestyle. Today a mental health practitioner in private practice faces this choice: Either work under contract for a profit-driven managed-care company and accept whatever fees and conditions they decree, or find clients who are willing to pay out of pocket for high-quality services.

Yes, you can decide to operate primarily outside of managed care.

I have, and so have hundreds, maybe thousands, of therapists. To do this, you need more than a bunch of tips and techniques. You need a systematized approach that works and some necessary skill sets.

Why Are You Reading This? Maybe you are tired of working in the managed-care system and are thinking about starting a managed-care free practice. Maybe you have started a private practice, but are struggling to get private-pay clients. Maybe you have a good private practice, but feel you have not realized your full potential. You want a full practice of well-paying clients. Maybe you just want a few great ideas to take your practice to the next level. One good idea can sometimes make a big difference.

Private practice has changed drastically from what it was a little over a decade ago and continues to evolve. Much of the change has been related to the expansion of managed-care insurance.

Many practitioners have been able to thrive while others struggle. Many mental health professionals have left private practice, unable to successfully adapt.

Some of the concerns and frustrations I hear expressed include:

Low fees

Being undervalued in the managed-care system

Lower quality of services in the managed-care system

Discouragement with the lowered income, additional strains
and burdens

Managed care is too much in the driver’s seat

Encountered inequities in the managed-care system

Ethical dilemmas about such things as continuity of care and
terminating therapy too soon

Having to work too many hours to make ends meet

Time-consuming authorization, billing and administrative work

A pervasive current of gloom regarding the future of the profession.

Perhaps you, like many professionals I talk to in the consulting and coaching part of my work, aspire toward a more rewarding and lucrative practice. That’s where I was several years ago. As a practicing psychologist, I know what you are likely experiencing. I love being a psychologist in private practice, but also understand how challenging it can be. I also know how to make a practice grow and stay successful.

I foresee that more and more practitioners will discover financial success and freedom to deliver individualized services in private practice outside of managed care. These practitioners will increase their satisfaction level and sustain it.

From the outset, I established a private-pay-only practice. I did this for several reasons:

I believe that managed care does not cover high quality services

Clients want and deserve customized attention

Many people value real privacy, which they cannot have in managed care

I believe I deserve to make a good living in the profession, and can design a more satisfying workplace outside of managed care

The question was, would enough people be willing to pay out of pocket for services? The answer was and is YES. More and more, people are coming to the realization that insurance no longer covers high-quality therapy. If people desire it, they have to pay out of pocket. If people pay less, they get less.

Managed care does not cover high-quality therapy or many psychologically-based services for which people feel a need. People will pay for services they perceive as a sufficient value to themselves.

The value of private-pay services over managed-care services are that they are more personalized, remove the stigma of the medical model and clinic setting, offer true privacy and are higher quality.

In addition, we have the distinction and opportunity to offer services from a personal growth model in addition to or in place of the traditional medical model.

When you let go of managed care, you:

1. Assume control of your services, income and lifestyle. There is greater opportunity for financial success and satisfaction in your work.

2. Have greater enjoyment and passion for your work. You won’t be as bored with your work, and will be less susceptible to burnout. This model encourages you to do more of the work that taps into who you are, what you love to do and unleashes your creativity. You will have greater variety in the work you do, not the same basic work day-in and day-out.