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The 'Dark Side' Of Joining A Group Private Practice (part 2)

Last week, I blogged about the benefits of joining a private practice group. Today, I'll discuss the downside of being in business with other practitioners. I briefly worked in a group practice where all therapists owned equal parts of an LLC (Limited Liability Company). At first it sounded like a good idea. After a while, I could see that it wouldn't work long-term for me and for my practice.

The Drawbacks of Joining a Group Practice

1) Liability concerns

After several months in a group practice, I realized that the drawbacks far outweighed the benefits. One of the biggest drawbacks was sharing liability for other mental health provider's actions and decisions, of which I ultimately had no control. Therapist Melissa J Templeton, MA, LPC, LMFT agrees, “It's really important to be aware of the legal entanglements of being in practice with another mental health provider, as it exposes you to all kinds of liability. Being in the same building even without a formal partnership agreement could open you up to being sued by someone who was injured on the property or who accuses your co-leaser of a criminal or civil action.”

Psychologist Wes Crenshaw PhD, ABPP of Family Psychological Services, LLC strongly cautions other therapists against creating legal partnerships in group therapy practice.

The best advice I ever received was to avoid creating a partnerships, and I ignored it. When one is say, a 25% owner of something, one is an owner of nothing. The only groups that work well this way are those with a clear 51% managing partner. Unfortunately, psychotherapy practices are not traditional businesses in the sense that they produce a profit above payroll sufficient to take distributions. They are instead a conduit by which money flows from the client/insurance company pockets into the provider. Without the attributes of a normal business (e.g. a profit margin above salary) there is no good reason to form a fiduciary obligation with other providers.

2) Loss of autonomy

When I joined a group I realized that the decision making process, even for minimal office expenses, was extremely inefficient. It was frustrating and even painful for me. I like see things change and move forward quickly. Since everyone owned equal shares no one was really "in charge" and able to make quick decisions, or to create a cohesive vision, or to take the lead of the group.

Arizona psychologist Christina G. Hibbert, Psy.D. was employed by a group practice but now is in solo private practice. Of her group experience Hibbert says, "Sure it’s great to have less responsibility but that also usually means having less input into decisions regarding everything from office décor to how things run." Illinois counselor Melanie Dillon, LCPC, at Center For Wellness, Inc also notes that a drawback of a group practice is the loss of say "over who I counseled and what my hours would be.”

3) Less control over income

Like Dr. Crenshaw warned, when you're legally partnered with others they have a say in business decisions that affect your income. When you're part of a group, others may have already dictate the cost of joining the partnership, or the amount you'll be paid when employed by a group practice. “I had put off joining a group practice because of the dramatic decrease in hourly income," Dillon adds.

When I was in a practice group with five other therapist I was contributing 1/5 of the overhead even though I was practicing part-time.  I quickly realized that, although I enjoyed working with other therapists, I could run a solo practice for a lot less that I was paying to be a part of the group. I decided to venture out on my own and started Wasatch Family Therapy.

Since then, I have built my solo private practice into a private clinic with a dozen employees. I am the sole owner and can make decisions quickly. In upcoming articles I'll walk through the pros and cons of going into solo private practice.

Based on your experience, what are the drawbacks of being in a group private practice?

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Why I 'Broke Up' With Managed Care (Part 2)

Several months ago I wrote a post titled, "Why I Broke Up With Managed Care" that stirred up some passionate discussion! While I understand that it's not the route for every private practitioner, I have continued to build a private practice free of managed care and recently hired my 12th therapist.

While we don't bill insurance directly, we do give a superbill to clients so they can seek reimbursement from their health insurance so they can still use their benefits. As I've continued to write this blog, I've come across several therapists who have also "broke up" with managed care and asked them why they decided to build a fee-for-service therapy practice. Here's what they had to say:

Increased Reimbursement Rate

I've been in private practice for over 15 years. So, I experienced the first major transition of health care to "managed" care. I had friends and colleagues who began working in the managed care industry, and it quickly became clear to me that despite all the rhetoric about the necessity for evidenced-based care (which can be a very useful model of care), managed mental health care was really about making corporate the work of individual psychotherapists.

I also did the math. The last time I checked, insurance reimbursement was the average rate charged by psychotherapists in the 1980s. Today, I can afford to have two additional office hours available for new clients, by taking just one fee-for-service patient. This also allows me more discretion in seeing clients who are needing a low fee. Will Courtenay, PhD, LCSW "The Men's Doc"

Control Over Therapeutic Work

I wanted the freedom to determine, along with parents, the course and length of treatment and felt managed care would impede on that. Pam Dyson, LPC, RPT

My training is in social work, which is the source of the old adage "start where the client is at." That's my barometer for treatment, not where an insurance company believes my client and I should start or end our work. Will Courtenay, PhD, LCSW "The Men's Doc"

Increased Client Commitment to Therapeutic Process

Being a Christian counselor, by law I cannot bill insurance, even if I could I think private pay gives each person responsibility in the therapeutic efforts. When people  have to pay it makes them take their  therapy more seriously. Natalie Davis

No Diagnosis Required

My services are specialized in that I will work with children as young as three, something many therapists in my area will not do. The problems child clients present with are often not clinical but rooted in the parent-child relationship. I feel strongly that young children do not need a diagnosis on their permanent health record. Pam Dyson, LPC, RPT

More Time With Clients (Less Time Doing Paperwork)

I had worked in a managed care setting in the past, and I decided that in my practice that I want to avoid the incredible amount of paperwork, defending sessions, and over-diagnosing.  I also think it provides clients with more privacy. Sara Levitsky, LMSW, Birmingham Counseling For Women

Paperwork was the other major decision (in building a fee-for-service practice). I put a great deal of time and energy into my work with clients outside of our scheduled hours, including receiving professional consultation on a consistent basis. I have no time or patience for administrative busywork. Will Courtenay, PhD, LCSW "The Men's Doc"

More Flexibility To Offer Reduced Fees

Like Dr. Courtenay mentioned earlier in this article, when his practice is doing well financially, he has more (not less) time to devote to seeing clients at a reduced fee. I have found the same to be true. As my practice grows I am able to offer more free community workshops and do more pro bono work.

Do you run a fee-for-service mental health therapy practice? What led to your decision?