Every mental health professional faces one insurmountable barrier:

You cannot help the patient you never see.

In graduate school you learned how to deal with emotional issues.  But there’s one course you never took:

How to get your patients in the first place.

Now’s your chance.  The Graduate Course You Never Had teaches you what you never learned in school..  Here is the ultimate primer on marketing your mental health practice so you can:

Help more people.

Free yourself from dependence on insurance.

Provide the treatment that’s best for your patients.

Increase your income.

Enjoy a secure future.

Dr. Larry Waldman is a seasoned psychologist with decades of experience helping patients of all kinds.  More than that, he is a master of practice marketing—a skill he has studied, developed, and taught for 30 years.

It is said that if you want to be a millionaire you can accelerate the process by associating with millionaires, getting inside their heads, and learning how to think the way they do.

Although this book is not about becoming a millionaire, I think the same learning process can be applied to becoming the best mental health care provider you can be—and do so by running your practice following a proven business model.

You might have heard the old adage that a “bird in the hand is worth two birds in the bush.”

Well, in this course that you never had in school, consider me your “bird in the hand.”  This is your opportunity to get inside my head, learn how I think, and learn how to develop and maintain a quality, profitable practice just as I have done.

I’m in the twilight of a career that has spanned over 30 years of mental health care practice that—yes—I run effectively using proven business principles that really do work for those who are willing to apply them.

No matter what stage you are in as a mental health care provider – still in school, just out of school, being client-fed by a Managed Care company, or have an independent practice with primarily cash-pay clientele – you will find nuggets on these pages that will help you build, increase, and maintain a more profitable business.

Dig in.  Learn.  Apply.

Larry Waldman

(seen variously attributed with slight variations to William Arthur Ward, Ralph Waldo Emerson, Leo Buscaglia, and anonymous)

CHAPTER ONE

MY STORY

I knew very early on in my training that I wanted to develop and run a private psychological practice.  Nevertheless, I never had the opportunity to take a course or as much as a seminar on the basics of developing, running and growing a private mental health practice.  In the 1970’s there was little literature available on the subject.  For that matter, not much has changed in the ensuing three decades.

Initially, I began working in the field of psychology as a school psychologist.  After I obtained my Ph.D. I continued to work for the school for a time but also did evaluations on the side for another psychologist in private practice located on the opposite end of town.  This psychologist, more or less, began to mentor me in the business of private practice.

Since my “mentor” was planning to retire around the time I intended to leave my school psychology job and go into private practice, it was agreed that I would buy his practice.  Thus, in January 1980 I went into private practice.  My mentor stayed several months afterward to ease the transition.

I was glad I “bought” the practice (it was not much money because I had little at the time) because I instantly had an office, furniture, file cabinets, test kits and forms, a phone system, and a trained receptionist/secretary/biller.  The only thing I did not have, of course, were clients/patients.

Because there were two other suites in the office, I took on two other psychologists—who happened to be husband and wife—and had just come to Phoenix.  We had a hand-shake agreement on an arrangement where I supplied everything and received a percent of their receivables.

For the first six months or so, I spent more time out of the office than in it, as I very actively marketed our “group.”  I also rented some office space and services to a psychiatrist—who sent us referrals.

For the first year I barely earned enough to cover expenses.  My family and I lived off savings and the State retirement reimbursement I took when I left the School District as a school psychologist.

By year two I was beginning to make some money.  I continued to add some part-time people, like a tutor, speech and language therapist, and a counselor. 

By year three the office was coming along, and I was making two to three times more than I did as a school psychologist.  I was enjoying the fruits of my labor and I was about to ask the two psychologists to become full-partners in the practice for a small fee, since I had done all the work putting the practice together.  We agreed to discuss terms after I got back from my first vacation in three years—in the summer of 1983.

When I returned from vacation I learned that my prospective partners, instead of aligning with me, had decided to set up in another office in the same complex—and the secretary and counselor were going with them, as well.  What I realized then was that my prospective partners initially were accepting of our business relationship when there was little income and I was paying the bills.  However, when the practice began to make money they became resentful of the income I was making from their labor—forgetting about my initial investment.  Hence, I inadvertently fostered a classic “hostile-dependent” relationship.

Since my lease on the suite was nearly up, and I did not feel like starting completely over, I closed my practice and joined the largest private mental health group in Phoenix at the time, which was based in a hospital with several different psychiatric programs.  The group consisted of four psychiatrists, one nurse practitioner, eight psychologists, and two or three therapists.  The practice essentially owned the various psychiatric units, and very quickly I was extremely busy doing inpatient as well as outpatient work.  Twelve-hour days, six days per week, was the norm. 

After about six months of working 60-70 hours per week, my wife began to complain that if I was going to be gone working so much, where was all the money?  My response was that I had to build up accounts receivable and then the money would begin to flow.  Unfortunately, by the end of the first year or so, I was earning about half as much as I had earned in my own little practice before—but was working twice as much.

After a few more months the financial situation for me was still no better.  A client I was seeing for several months happened to note to me that he was wondering when I was going to bill him and his insurance company, since he had received no paperwork of any sort related to his treatment with me.  With that information I left a message with the office manager asking why this client and his insurance had not been billed.  When I did not get an answer after a few days, I met with her and demanded an answer.  I requested that she explain, in detail, how the billing procedure worked.

What very quickly became apparent is that the office manager had no idea how the billing process, from the beginning to the end, actually worked.  Moreover, when I met with the back office staff, they, too, were quite unclear about the entire process.

I reviewed the problem at the next partners’ meeting but, surprisingly, the partners’ response was essentially to leave the situation alone.  To make my point I proceeded to train one of the more enthusiastic back office staff persons in the process of insurance verification, billing, and re-contacting.  In three months my accounts receivable was the highest in the group; I was earning more than psychiatrists who were billing more than $350,000.00 per year—and had been doing so for years!  Again, amazingly, the partners’ reaction was that I was “meddling where I didn’t belong.”

I left that large group in 1983 and took my accounts receivable with me.  I set up another practice with another therapist from the group who was also frustrated by the lack of income despite working very hard.  We hired a secretary who worked for the two of us—whom I trained.  Within three months she collected 90 percent of the old accounts receivable from the group practice for both of us. 

I thrived in my simple practice doing inpatient and outpatient work and consulting.  I made the most money ever in my career in the late 80’s to early 90’s—better than a quarter of a million dollars per year.

As Managed Care began to get stronger in Phoenix, I began to think about again becoming a member of a group; reducing overhead increasingly seemed to be a good idea. Thus, in 1995 I joined a group practice, which included psychiatrists, psychologists, and therapists. The group was essentially a collection of individuals practicing separately—which is exactly what I was looking for.

In 2004, with three partners—a psychologist and two psychiatrists—we bought and built our own office.  We designed it specifically for our needs, with particular attention paid to soundproofing.  We four partners rent the spare suites to other mental health practitioners.  The rental income essentially pays our costs and expenses.

I remain quite successful, with a diverse, largely cash-pay practice, even in a difficult economy.  By owning our office, I have major tax advantages, and the building has appreciated significantly in value.

What did all this experience teach me about mental health practice? 

1. Get all contractual agreements in writing.

2. Do not form hostile-dependent financial arrangements with employees/colleagues.

3. Learn and understand the business of mental health practice well.

4. Learn the process of insurance billing well.

5. Train, treat, and pay your staff well.

6. Specialize and diversify.

7. Become creative in thinking of ways you earn income and find clients—especially those bearing cash.

My practice today is multifaceted and involves the following:

Cognitive-behavioral and/or solution-focused therapy with children, adolescents, and adults.

Parenting training.

Marital training.

Psycho-educational evaluations.

Psycho-educational evaluations for school districts.

Psychological evaluations.

Psychological evaluations for the Court.

Custody evaluations.

Parenting Coordinating.

Consultations to personal injury, defense, estate planning, and immigration attorneys.

Consulting to Social Security.

Selling my books and CDs.

Professional speaking.

Important points to remember in CHAPTER ONE: 

1. Get all agreements in writing.

2. Do not form hostile-dependent financial relationships with colleagues.

3. Learn to consider your practice as a business and treat it as such.

4. Learn the insurance game.

5. Train, treat, and pay staff well—it pays.

6. Specialize—and diversify.

7. Become creative in how to earn income in mental health other than sitting in a room with a client.

Action steps to take from CHAPTER ONE: 

1. Have an attorney review your lease, rental agreements with tenants, financial arrangements with colleagues, employment contract(s), and other pertinent legal documents.

2. Consider revising your financial arrangement with colleagues to get out from under a hostile-dependent relationship.

3. Consider giving your staff a raise accompanied by more responsibility to increase loyalty.

4. Read a book and schedule a workshop to begin to develop a new “specialty.”

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