The Business of Psychotherapy Practice
Reflections and Lessons Learned in the Trenches
I direct a psychotherapy practice in the northeastern United States with about 30 providers focused on providing cognitive behavioral therapy. We have two locations and treat a wide range of adults, teens, and children. I ended up in this role because I fell in love with the fields of psychology and psychotherapy almost three decades ago.
In this article, I would like to offer some lessons I have learned about the business of psychotherapy. I am going to imagine writing this as an advice letter to graduate students and early career professionals who are curious about business-of-practice issues. I also hope that my comments may be of interest to others who care about the dissemination and development of psychotherapy practice. There is so much that isn’t taught in graduate school about practice-relevant business attitudes and skills that could lead to much greater success.
Business Is a Team Sport
I tend toward the independent side and feeling like I need to figure everything out myself. However, I have found that the business of psychotherapy is best considered a team sport. You will do best if you have many different players on your team. You will need a good lawyer, a great accountant, a computer firm, a web design firm, and someone trustworthy to clean the office. You may need a financial advisor, an insurance agent, and consultants of various types. Most of these players will be central, even if you are in solo practice and certainly if you have multiple providers in your group. I want you to think about building this team as a central component of the business of psychotherapy and crucially-linked to delivering excellent patient care. If you are spending tons of time trying to balance your books, clean the office, or figure out how to design a website, you are not taking care of patients or working “on” your business (versus “in” your business, as the saying goes). Trust me—my wife and I have spent lots of time running these experiments and learning the hard way. I have spent silly numbers of hours dealing with computer issues and website issues—which were probably quite far above my head, despite the fantasy that I could do them well. For years when our children were young, my wife (and practice manager) would stay late into the night every Thursday doing many tasks which we only eventually learned to “sub out” to others.
Customer Service Is Key
Customer service is a basic concept in business and a central focus in most industries. My sense is that it is almost never discussed in graduate school and other training programs. It means trying to make it easy, pleasant, and reinforcing to receive services from you. We try to provide excellent customer service in many, many ways. We have carefully hired and trained intake coordinators who answer phone calls live and help patients to feel glad they reached out for help. We provide coffee and water in all of our waiting rooms. We accept credit cards and keep them in a secure online vault, so that patients don’t need to present the card at each session. In all of our dealings with patients we try to be flexible, accommodating, and treat people with kindness and empathy. If we make a mistake, we apologize and try to make it right. I’ve sometimes sent people gift cards when our office has given a wrong appointment time or made a scheduling mistake. I encourage you to think about what kind of experience you want someone to have finding, signing up for, and receiving your services. Make it easy for them. Make sure you return messages promptly or have someone reliable answering calls and messages from patients. Don’t be shy about amazing people with positive touch-points beyond what you do in the treatment room (e.g., establishing a good therapeutic alliance and providing proven strategies). How can you amaze and delight your patients?
Long-term Relationships Are Central to Business—and Life
Another key idea that is central to business thinking is to develop long-term relationships with your customers. I remember when I first read about this idea. Now it seems obvious. However, it was new a point-of-focus for me at the time. Businesses typically succeed in the world because they develop loyal customers. It works much better for businesses to provide services to their existing customer base than it does to keep bringing in new customers. There is often a significant cost to customer acquisition, such as in marketing dollars. Businesses with little repeat business will usually struggle.
I take and encourage a “primary care doctor” metaphor in providing psychotherapy. I convey that I am taking responsibility for the patient’s mental health care. Much like a primary care doctor, I will propose we meet more frequently at first and then taper off gradually. Once someone is doing much better, I will see them monthly or quarterly—until we go to a call-me-when-you-need-me plan. I rarely do hard terminations with patients. The nature of life, depression, anxiety, and stress is the recurrence of issues, stress, and problems. It is much better healthcare to remain a resource for patients, within ethical boundaries, and we want to avoid forcing on clients the difficulty of feeling ashamed when they need our help again. We want to de-shame and normalize seeking support and wise counsel. So, I want to encourage you to think about forming long-term relationships with patients—even if you are trained as a short-term, problem-solving kind of clinician. I consider myself very much working from a CBT point of view. This does not preclude me from having been there for my patients over many life stages. I have helped people cope with their teenage years, college, dating, marriage, and parenting. Indeed, seeing someone through a crisis if I haven’t seen them in a few years is one of the most gratifying parts of my work as a psychotherapist. As you develop your practice, plan for what you want your relationship with patients to be over time. Discuss explicitly that you hope to be a resource for them in an ongoing way, regardless of the length of any treatment episode.
Trust Your Value—Deep Listening and Wise Counsel Are Crucial and Rare
For a business to succeed it has to have an excellent product or offering in which the people running the business truly believe. Great customer service can’t make up for a lousy product. So, in general, how valuable is the service we are trained to offer? There are many pieces of evidence that suggest to me that it is highly valuable. First, decades of research and many meta-analyses have shown that psychotherapy is generally effective, that differences between active treatments are difficult to show, and that many patients find it an acceptable service to receive. Indeed, stress and anxiety appear to be at all-time highs—just ask high school or college students about how stressed their peers seem to be, or how many mental-health related issues they encounter in school. Shame and stigma about both having emotional problems and receiving help for them appear to be decreasing. My sense is that is far more common now to share that you are seeing a therapist than it was 30 years ago. With the advent of the smartphone age, it seems that having someone give you undivided attention for 45 minutes is increasingly uncommon in the real-world. We can no longer expect most people to have the kind of friends who will listen to them well for significant lengths of time and who have the availability and knowledge to discuss issues and guide them skillfully. So, I want you to trust your value to your patients, even if you don’t fully feel competent yet. Show up, be unbelievably genuine, focus in and help patients organize and clarify issues, and work collaboratively on a game plan for progress. If you are offering psychotherapy, you are likely offering something increasingly valuable. It may not feel like it all the time, because you know there are many things you don’t know and your sense of confidence and competence may still be forming. However, we also know from decades of research that if you can form a strong therapeutic alliance, in which you help the patient feel warmth from you and trust in you, and you seek agreement on the goals and tasks of therapy, you will likely help them feel and function much better in their lives.
Don’t Be Cheap About Training
In the business world, successful companies keep innovating and improving their products. They put significant resources toward research and development. They upgrade the food and appearance of the restaurant, the look of the website, or the speed and power of the iPads they sell. If Apple, Google, or 3M hadn’t kept improving their products and inventing new services, they would have been long defunct. In the strange industry of psychotherapy, you are largely your product. So, I want you to spend heavily on your training, workshops, and professional development. Buy and read large numbers of books on the field. Go to an embarrassing number of continuing education events. Develop areas of expertise. Pay for supervision and consultation. It is okay if it is a bit scary and feels indulgent. That is the price tag of your research and development. I also want you to keep investing in making your personal life as pleasant and growth-oriented as possible. Try never to be a hypocrite: If you are pushing your patients to keep growing and improving, you need to as well. You have my full doctor’s permission to experiment with traveling, going to a gym, getting a house cleaner, hosting a party, and changing your hairstylist. It is all part of the field. You can’t really help people improve their self-care and growth if you aren’t also pushing yourself out of your comfort zone.
You Can Care Deeply and Charge Appropriately
Successful businesses price strategically and seek high margins on their products and services. They look to differentiate what they sell from what their competitors sell. They try to avoid pushing commodities in which the consumer is focused only on obtaining the lowest price. Businesses with low margins and poor business models often fail. Then, they don’t serve any of their customers. Successful businesses need to make reasonable profits for many reasons. As discussed previously, they need to keep improving their products and services. That takes money. They need to have a stockpile of cash to weather inevitable upturns and downturns in the market. They need to have money available to seize unique opportunities that emerge. If they sell too cheaply to current customers, they are harming potential future customers. In the industry of psychotherapy, there are several challenges. For many of us, the fees we charge don’t matter much because insurance companies dictate reimbursement amounts so heavily. Some clinicians, myself included, find it so easy to care about people, and they love work they do so much that they wish they could do it for free. It feels like it is hardly about the money. Others get a sense that if they charge patients a significant fee, it means that they don’t really care about them. I want to encourage you to learn to feel good about charging high fees. Stick to them and raise them periodically. Your caring and expertise are valuable and worth significant remuneration. The more you can just broadly accept this equation, the better off both you and your clients will be. Being deeply caring doesn’t mean you should be paid less! It means you should be paid more—it is your natural resource and you are offering it for someone else’s gain. Furthermore, it is a terribly limited resource. There are only so many hours in the day and only so much emotional energy you have to give to others. You also have a unique voice and life experience that informs your work. No one else comes from precisely the same point of view. In terms of the restrictions put on what you get reimbursed by insurance companies, it is tricky. You can try to develop a strong niche and either go out-of-network, or you can try your hand at negotiating with them. Both scenarios are possible. You can also develop some services that don’t count as medical procedures and for which you can set fees at the level you choose. For instance, offering a workshop on the psychology of money might be a good non-insurance service.
Identify Your Ideal Customers and End Relationships With Your Worst Customers
Successful businesses figure out the profile of their ideal customer. Then, they seek out those customers and try to over-deliver value to them. Businesses that don’t know which market segment they are trying to reach will struggle. Mercedes and Hyundai are trying to please different segments of the car market. If businesses try to please everyone, they will likely get spread too thin, confuse the marketplace, and dilute their brand message. Apple makes it clear that they are trying to deliver a premium product. They are not trying to reach customers seeking the cheapest device possible. Businesses can also get caught up trying to accommodate their most difficult and demanding customers. This can take time and energy away from dealing with your main customer base. So, I want to encourage you to think deeply about your strengths and who is so easy for you to treat that it feels like cheating. The picture of this client will differ greatly between clinicians. My usual example is that some clinicians don’t like treating angry men. It makes them nervous and stressed much more than it might make someone else. Thus, we don’t give these psychotherapists angry men to treat, if we can possibly help it. We encourage them to frame the evaluation as an evaluation and to feel empowered to send them to a colleague who loves that kind of work, if the match isn’t right. Keep asking yourself which of your clients make you feel energized. Notice patterns among them and seek them out as much as possible. I know some clinicians who love college students and some who don’t. Your preferences are unique and okay. And if it time to stretch those growth areas, invest in the personal therapy, training, and supervision to do so ethically and effectively (see above!).
One to five percent of a busy clinician’s caseload can be consuming much of their emotional energy and contribute disproportionately to burnout. Though I have learned much from working with that sliver, I would tell my younger self and other colleagues coming up that it is okay to set limits and to refer more readily. You need to protect your whole caseload by protecting yourself some times. Go the extra mile for patients, but know when to bring in other providers on a case.
For a small business example, let’s say an accountant had a general practice and was preparing taxes for dozens of individuals and small businesses. This is their bread-and-butter work and not too difficult. If they also had a large medical practice they were trying to serve, that demanded tons of time from them, created lots of stress, and made it difficult to stay on top of the bookkeeping of the rest of the client portfolio, we would have a major problem. It would likely make sense for them to refer the medical practice to a specialist in that area of accounting—or perhaps refocus their own efforts on that niche. Whether for accountants or psychotherapists, stress matters and must be carefully monitored.
I encourage you to keep learning about the business of practice. The better we get at the business of psychotherapy, the more people we can reach. One of the best ways of disseminating therapy to those in need is to disseminate business-positive attitudes and skills that make it easier to succeed.
Cite This Article
Johnson, B. (2018). The business of psychotherapy practice: Reflections and lessons learned in the trenches. Psychotherapy Bulletin, 53(2), 14-18.