Getting started in private practice
Mental health professionals make tough decisions during their career, but few are as fraught with anxiety as the decision to pursue self-employment. The benefits of employment at a community agency, hospital, or university setting include the security of a regular paycheck, health and retirement benefits, and a community of professional peers.
Despite these benefits, there are numerous reasons given for leaving the relative security of employment at an organization. Severe shortages of social workers, psychologists, counselors, and psychiatrists employed in health care settings result in high caseloads of clients with complex pathology.
The inability to control factors such as caseload, combined with inadequate resources, can lead to burnout and job dissatisfaction. Private practice offers autonomy and the opportunity to exert control over caseload, schedule, and income.
Planning the transition
Clinicians who want to transition to self-employment benefit from a detailed business plan, laid out in phases. The start-up phase encompasses the period of pre-planning through the first six months of initial operations.
During the start-up phase, the establishment of a savings or credit line is important to ensure cash flow. Consultation with an attorney and/or an accountant is important to determine how to structure the business from a tax perspective. There are aspects of setting up a practice that requires financial investment, such as malpractice insurance, disability insurance, subscriptions to therapist directories, and an electronic medical record system. If the clinician plans to participate in insurance panels, lead time is needed for credentialling.
Therapists may decide to join one of the large telehealth companies that employ clinicians as contractors in the gig economy of tele-mental health. These large-scale companies can help the newly self-employed practitioner to get started in terms of credentialling and caseload but usually take a substantial cut of the insurance payment.
Other companies contract directly with employers, bypassing the health insurance provider and can offer better remuneration for contracted clinicians. The self-employed therapist can explore these as potential income sources but should do their due-diligence research prior to signing a contract.
Start-up
The second phase of launching a practice encompasses the first year of operations, dating from the time that the first client is seen. Over the first year, the clinician gains knowledge about which sources of referral are most fruitful.
Therapist directories, colleagues, former patients, and insurance panels are common referral sources. The day-to-day operations of the practice in the first year will evolve over time as the business owner determines what aspects of the business are not working efficiently and need refinement.
Self-employed therapists often state that managing anxiety is the biggest challenge in setting up a solo practice. It is difficult to set a new path, without knowing exactly how it will all work out. Self-employment can feel scary for anyone, especially for people who are risk averse. It helps to keep a written record in the first year of operations as a record of accomplishments. Like renovating a house, it can be discouraging to look ahead at the undone tasks, and it is easy to lose sight of all the work it takes to reach the present state.
On-going Operations
The self-employed practitioner may never reach a stage of autopilot because there are always myriad complexities and challenges to self-employment. However, after about one year, the clinical and administrative tasks become more predictable. With experience, it is easier to determine whether to contract out specific jobs such as scheduling or billing. Tactics that work in the start-up phase usually need to be adapted over time. Some marketing strategies will fail and need to be abandoned. The ability to recognize what is not working, to persist and adapt is critical for successful business owners.
Is Private Practice Worth It?
Self-employment entails risk in terms of financial investment and the potential for litigation if a client brings about a lawsuit. The decision to leave an agency for self-employment is weighty. Nonetheless, there are substantial numbers of mental health practitioners who are happily self-employed in private practice.
Self-employment continues to be attractive to therapists because of the autonomy and potential to have greater control over income and time. Private practice offers a great deal of flexibility and is possible as a small independent endeavor or a full-time effort. Private practice, though not for everyone, is deemed very worthwhile by vast numbers of clinicians!