The downsizing of clinical psychology

By Stan Lipsitz, PhD

Downsizing seems to be popular these days. Hardly a week goes by when the business section of The New York Times or the Wall Street Journal does not list a company that is laying off people, oftentimes 5,000, 10,000 or 15,000 nationwide. We may note this with some sympathy, but then go on about our daily activities without any further thought. If anything, we deny the pain and justify the action on the basis that this is necessary for a robust economy, and we certainly don?t want the value of our stock portfolios to decrease. Of course, if we were one of those people being laid off, we would feel differently.

In fact, we are those people, although you won?t see it in the newspapers. Clinical psychology is in the process of downsizing. Few clinical psychologists have been laid off, but many have seen their income and business decrease. Michael Haley, executive director of the California State Psychological Association, has estimated the income reduction to be about 40 percent.

From either your own experience or that of colleagues, you know this to be generally true. New PhDs frequently cannot find salaried jobs as clinical psychologists and so are forced to take lower-paying positions in the mental health field, perhaps as a caseworker or halfway-house counselor. If the new PhDs are in private practice, they frequently have to charge only half the going rate because they can attract only lower-paying clients. Some might argue that this is a benefit to society: well-trained professionals at lower prices. Fee per session or testing, the number of sessions allowed by insurance or managed-care companies, and income are all down, at least for most psychologists.

Although many people, including prominent business leaders and politicians, point out benefits to society and the economy of reduced health-care costs, now that we are the ones being downsized, we don?t see it that way. Downsizing reduces our standard of living and makes it harder to pay off the graduate school loan, to buy a house, to send our kids to college or to take a long-awaited vacation.

We all keep hoping that, like a bad dream, the economics of practicing clinical psychology will change and we will wake up to the way it used to be, or better. The popular word for this kind of thinking is denial, but why should our thought processes be different than anyone else?s just because we are psychologists? Professional narcissism? Unfortunately, this is the reality, and there are no easy answers.

There are certainly enough smart people in our field. Some clinical psychologists have been able to find an answer for themselves. A few have gotten their MBA or JD and set up specialized practices. Others have found untapped niches. But these approaches work for only a few because the demand for such specialization is limited. The bread-and-butter work of most clinical psychologists is what it has always been, psychotherapy and psychological testing; and exhortations to develop new areas of practice have not resulted in a significant number of new jobs.

Some dream that the extension of prescription privileges to clinical psychologists will save our profession. If this were to occur, it would probably change the economics of our profession. But even this is not guaranteed, since insurance companies would certainly pay PhDs less than MDs, using it as another opportunity to save money. However, I doubt that clinical psychologists will be given prescription privileges at least on a large scale; and if this were to occur, it probably would be a mixed blessing and not provide the professional redemption we desire.

Bottom line, there are no easy, ready-made answers. We can hope for an intensified backlash against managed-care organizations, but this is more likely to achieve the worthwhile goal of improving quality of care, not to secure more jobs or income for clinical psychologists. As much as we may wish for it, managed-care organizations are not going to disappear, at least in the foreseeable future. The problem boils down to money versus services: Most people want more services but do not want to pay more money. For managed-care companies to provide more services and hire more psychologists, they have to charge more?a concept that won?t fly in this competitive health-care environment. The most we can hope for is to force managed-care organizations to act more responsibly, a not-insignificant goal. Hence the PARCA bill.

Our professional organizations have begun to take long-overdue actions to remedy these problems. The Public Education Campaign that APA has started in conjunction with state and local psychological associations and divisions appears promising, particularly if the organizations provide the necessary support to sustain a long-term campaign. Recent lawsuits initiated by APA with New Jersey and, soon, California, also hold promise in that they may force managed-care organizations to act more responsibly?to desist in 'without-cause' termination of psychologists from their provider networks and to make managed-care organizations provide the services that they say they will. We?d be wise, however, to be cautious in our expectations.

Our greatest hope may lie in federal legislation such as the Mental Health Parity Act of 1996, which requires that covered plans offering mental health services not impose different lifetime or annual dollar limits than are applied to medical services. Parity bills have been introduced into many state legislatures this year. It appears that a broad movement, supported by many mental health organizations, which could significantly increase monies for mental health services, is gaining momentum.

Short of this, we each are left, to a greater or lesser extent, with disappointments with our professional dreams and to find our own individual solutions. Perhaps the greatest disappointment is that no one else has the answers for us?or for our profession.

Stan Lipsitz is a clinical psychologist in San Francisco.