October 29th, 2018

The dilemma: to join a group practice or go solo

Jeff Zimmerman, Ph.D, ABPP

Jeff Zimmerman, Ph.D, ABPP

It is perhaps the most important question to answer for anyone just starting out in a clinical practice. Does it make sense to take a “safe” position in a group practice or would it be wiser in the long run to set out on your own, rent an office, and start building your brand?

There is, of course, no “right” answer, only many factors to consider. Among them, the administrative benefits of each option, the financial impact, the social impact and the market itself must each be considered before deciding which path to follow.

Of course, it’s also important to take into consideration one’s own goals and personal working style. No use going into private practice if you can’t stand to work alone. Nor does it make sense to join an established group if you value autonomy above all else.

A private practice gives you the freedom to set your own hours (even changing them week to week) define your own vision, make decisions on where to locate, and what insurances you will accept.

With your own name on the letterhead, there can be a sense of pride and ownership you would not have with a group practice.

Joining a group, on the other hand, can mean a wide variety of options     are available that would not be otherwise.

Depending on the size and setup, groups may offer health and dental insurance, administrative support with scheduling and billing, shared risk management, IT support and shared costs on computer and other technical equipment, and have more marketing reach.

Being involved in a group practice can reduce isolation and burnout and provide on-site consultation options.

For Evan Greenwald, Ph.D, executive director of the Counseling Center in New Hampshire and Maine, the choice to start a group practice nearly 30 years ago was pretty straightforward. He wanted, he explained, to split his time between running a business and doing clinical work.

“At the time I was hoping to eventually not do full-time clinical work,” he said. “It is the balance I wanted.”

Things are different now, though, he explained. Starting a practice is more difficult with managed care plans and more competition. Plus, there is a lot of unpaid time that goes into the setting up phase.

“It is an immense amount of work,” he said.

His advice would be to look at the variety of group practices that exist and compare the options. Some may take care of all billing and administrative tasks while others may merely share office space.

There are many ways to join a group, also – from full to part time to using it as a semi-retirement option.

If setting up your own practice is the goal, however, both solo and group practices would do well to follow some basic guidelines, said Jeff Zimmerman, Ph.D, ABPP, who has a private practice in Connecticut and New York.

He is also co-founder of The Practice Institute, a business and marketing consultancy firm for mental health professionals. Hiring experts, both those with experience in the mental health field and attorneys and accountants, is imperative.

Doing the math on expenses and income shouldn’t be put off and goes hand in hand with creating a solid business plan.

“Most psychologists have made a tremendous financial investment in their careers,” said Zimmerman. “If they were paying me $20,000 as an investment, they wouldn’t sign a check if I didn’t have a business plan. Yet, for ourselves, we don’t require the same care and planning we would of someone else.”

Although it goes against logic, joining a group practice can actually raise costs for the individual psychologists.

“Psychologists typically overestimate the financial benefits of starting a group,” said Michael Goldberg, Ph.D, director of Child and Family Psychological Services in Massachusetts.

“They tend to underestimate the overhead that goes into running a group. I have provided practice management consultations to behavioral health groups and it would shock people to know how little ‘profit’ group leaders tend to earn and how much time they invest into developing practices.”

Overhead costs can be higher but mainly because there is a cost to having someone run a group practice. They need to make a profit also. But those costs can be offset in part by higher insurance rates negotiated by a larger group.

“Health plans made it very public years ago that they generally prefer to contract with groups and make it much easier for clinicians to join networks through groups,” said Goldberg.

With less hours spent on administrative work and fewer headaches dealing with lease contracts or staffing issues, a therapist can also spend more time in session, making up some of that income loss.

“You could end up making the same or even more money,” said Greenwald.

Setting up a practice, from the business plan to leases, insurance contracts, staffing, marketing, billing and admin work, can be overwhelming.

It’s not something often taught in graduate school, either. To give mental health practitioners some basic training, the Practice Institute has teamed up with the University of Redlands in California to offer a certificate course in business management.  For more information, visit www.redlands.edu/study/schools-and-centers/CAPE/.

Catherine Robertson Souter is a freelance writer and social media agent based in New Hampshire. A contributor to New England Psychologist since its inception, she previously wrote for Massachusetts Psychologist among other media outlets.

By Catherine Robertson Souter

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