VOLUME 30 , NUMBER 2 -February 1999
Finding the right niche in new market
Psychologists are gaining business expertise to survive in today's health-care marketplace.
By Lisa Rabasca
Monitor staff
When Ginger Blume, PhD, realized managed-care companies were driving the marketplace, she did everything she could to make her practice more attractive to them. She expanded her group practice from six providers to a dozen, hired additional administrative staff, installed extra telephone lines and bought new software, additional computers and fax machines.
But the transformation had unexpected consequences. Because managed-care companies required her to consolidate the 12 providers' tax ID numbers under her own name, Blume was now considered an employer. Her annual malpractice insurance jumped from $600 to $5,000. And, she had to pay workers compensation and additional taxes.
As her overhead went up dramatically, her income was coming down at the same rate--this because managed-care companies, she found, typically pay providers at a lower compensation fee-for-service contracts.
'I gave them everything they wanted and it was a nightmare for me,' says Blume.
Only 18 months after grooming her practice for managed-care companies, Blume decided to go back to being a traditional fee-for-service provider. She scaled back to four practitioners and got rid of the extra phone lines. Today, about 70 percent of her clients pay for services out of their own pockets.
Across the country, providers like Blume are searching for ways to remain profitable in a health-care marketplace that is considerably different from the environment they began practicing in a decade
or more ago. Many practitioners believe patients are often reluctant to seek treatment because managed-care companies frequently require information about sensitive issues before they will authorize treatment.
Meanwhile, recent graduates are emerging from doctoral programs anxious to build their own practice or find a niche in a changing marketplace where business sense is essential to survival.
Obstacles to care
One of the ways managed care impedes the practice of psychology is by creating barriers that prevent consumers from seeking treatment, says George Taylor, PhD, an APA board member who operates a part-time independent practice in Atlanta. While many patients are willing to pay for services themselves rather than risk disclosing their mental health history to managed-care companies, others avoid seeking treatment altogether.
As a result, patients are not getting the care they need, says Taylor, who has seen his income drop by 50 percent in the last five years.
Taylor believes patients are getting inadequate care because managed-care companies create artificial barriers to treatment, such as requiring reauthorization every six visits and demanding information about sensitive issues.
'There are barriers put up in the name of accountability that are probably more disruptive and discouraging than they are beneficial and probably are not necessary,' says Taylor, who has been practicing for 31 years. Like many psychologists, Taylor has curtailed his participation with managed-care panels because he believes many managed-care companies put more emphasis on cost than quality and are disruptive to patient care.
Many practitioners say they believe managed-care companies put profit over patient treatment. Even something as simple as referring a patient to another provider has become difficult because, if the practitioner is not covered by the patient's insurance, the managed-care company won't pay for the service--even if it's in the patient's best interest to seek treatment from that provider.
Carol Goodheart, EdD, president of Div. 42 (Independent Practice), says she recently had to refer a patient to another provider but found the patient's insurance only offered a choice of three practitioners. Goodheart says she didn't feel any of the three had the necessary experience to provide her patient the best care.
Being prevented from directly referring patients to other providers also has an effect on the referral network psychologists spent years building. 'Previously, the decision-making process would be from one practitioner to another--for example, an internist would refer someone directly to me,' says Taylor of Atlanta. 'The opportunity to go directly to someone is more limited and in some ways it is harder to figure out how to market oneself.'
Good business sense
The biggest change in the health-care marketplace is psychologists need to understand how to operate a business to survive, practitioners say. 'People in independent practice these days need a good sense of business and marketing,' says Taylor.
Psychologists who increase their business sophistication often find that they don't have to violate their professional integrity or give up their core values to practice in the current marketplace, says Russ Newman, PhD, JD, APA's executive director for practice.
Yet business and finance classes typically are not included in psychology graduate programs, though several practitioners say the lessons they teach are critical for practicing in today's health-care market.
'Psychologists are not being prepared to be successful,' says Jeff Bragman, PhD, former vice-president of clinical services/chief clinical officer for Medco Behavioral Care, which became Merit Behavioral Care. Bragman says he was forced to learn about business and finance when he and three others started American Biodyne, one of the country's first managed-care companies.
Bragman left Merit four years ago to develop a part-time private practice in California treating a mixture of fee-for-service and managed-care patients. 'The people who are struggling are the people who need to continue to work with managed care as providers on panels, or they are struggling with how to contract directly with a managed-care company,' he says. Psychologists who understand business and finance could market their services directly to employers or managed-care companies, he says.
Find a niche
|
| Scott Mesh found his professional niche testing Spanish-speaking preschool children for developmental delays and behavioral problems. |
In 1995, he quit his job at the mental health center to become a full-time consultant evaluating Spanish-speaking preschool children. Since then, Mesh has greatly increased his salary and he recently formed his own New York City agency, Los Ninos: Child and Family Services, Inc., to provide evaluation and treatment services for children under age 5 with developmental delays.
While Mesh says he got a top-rate education in clinical psychology, his graduate program didn't teach him the business of psychology or how to develop a professional niche. By providing preschools with quality service, offering to practice in inner-city New York neighborhoods and working flexible hours, Mesh was able to carve out a market for himself. 'It's all about creating a niche for yourself, doing what you love, what you are good at and filling a needed area of service,' says Mesh.
Developing a specialty also benefits experienced psychologists. Dennis Steele, PhD, a private practitioner in Southern California, is carving out a niche for himself in forensics. He evaluates defendants in personal injury, wrongful termination, discrimination and worker's compensation lawsuits and often provides testimony as an expert witness. Although he devotes only 20 percent of his time to forensics, it accounts for 40 percent of his income.
'I am hopeful that it will become an increasing percent of my practice and maybe I won't be doing any managed-care work,' says Steele, who has been practicing since 1975.
Steele says a decade ago he had a thriving hospital and outpatient practice and his income was greater than many physicians' salaries. Typically, he was paid $180 an hour for inpatient care and about $125 an hour for outpatient work. Today, 90 percent of the insured patients he sees are in managed-care plans, which pay only $75 per hour for inpatient care and $50 per hour for outpatient care.
'All the incomes of people who were practicing around 10 years ago or more have dropped precipitously,' Steele says. 'Mine has dropped by 50 percent, and I think that is a common experience for psychologists seeing patients insured by managed care.'
Steele says he began doing forensics 10 years ago when a patient sued his employer and the patient asked Steele to give a copy of his record to his attorney. Since then, work has steadily increased as Steele made connections with attorneys in his community.
Developing new markets
Psychologists are also finding success on their own by identifying new markets for their services by forging links with other professionals--including physicians, pharmacists, dentists, attorneys, funeral directors and human resources directors, says Goodheart, Div. 42 president.
'It integrates psychologists more into the community and makes what we have to offer more visible and available,' she says.
Mesh says he called preschools in New York City with Spanish-speaking students and offered his services when he started working as a full-time consultant.
Visibility, such as a weekly radio show or newspaper column, is key for practitioners who want to enter the fee-for-service market, says Blume of Connecticut. 'You have to be really good at marketing and you must be perceived as an expert,' she says. 'It may not work for someone who hasn't been practicing for the last 10 years or hasn't marketed their practice.'
Blume, who began practicing 17 years ago, has a radio show on a local AM station, does a regular news article for the local newspaper, gives free talks at bookstores and belongs to community groups like the Exchange Club and the American Association of University Women. 'The people who go to these groups are people with jobs and decent incomes who can afford to see you out of pocket,' she says.
When Blume talks to civic groups she says she recasts the purpose of psychology. 'I talk about using psychological knowledge for everyday problems and that everyone can use a coach,' she says.
Refining psychology
But when the role of a psychologist is put in the context of a mentor, clients usually don't expect their insurance to cover services, Blume says. In fact, Blume often tries to steer patients away from using insurance because of the consequences they face, including loss of privacy and the inability to control their treatment.
Peter Oppenheimer, PhD, president of the Rhode Island Psychological Association and a partner in a group practice, says that when his group left a large managed-care company, he offered his existing clients the option of continuing to see him at the same compensation rate the managed-care company paid for his services, or referring them to another provider covered by their insurance company. Most clients chose to pay for services out of their own pockets.
'Consumers with mental health problems want the best care,' says Michael Werle, EdD, private practitioner in Rhode Island, who saw his income actually increase by 20 percent when he left a large managed-care panel. 'They're not interested in bargains.' Werle, who has been practicing for more than 20 years, says half of his managed-care clients are willing to pay for their own services.
But, Werle and Oppenheimer say they are concerned that managed care has created a two-tiered system of mental health care where the minority can afford to pay for the best care and the majority must settle for treatment provided through managed care.
'I'm worried that high-level psychotherapy will become primarily available to people in the top 20 percent income bracket,' says Werle.
As for Oppenheimer, who began practicing in 1988 'wanting to serve everyone,' managed-care companies are making that ideal impossible to live up to. 'People who hold to the traditional values of mental health services,' he says, 'see something that just doesn't fit with what's being imposed on them.'
PsychNET®
APA Home Page
.
Search
.
Site Map
Read our privacy statement and Terms of Use
© 1999 American
Psychological Association
|
|
|