Psychotherapy’s Soothsayer

Nick Cummings Foretells Your Future

by Richard Simon

Suddenly, sometime in the mid-1980s, as the managed care revolution raged around them, therapists emerged as if from a dream to find that terms like “heath care delivery systems,” “covered lives” and “capitated health plans” had gone from being mind-numbing policyspeak to urgent pocketbook issues. As an entire profession nervously scanned the horizon, anyone at a national conference who had something vaguely credible to say about whether the Golden Age of Private Practice was truly coming to an end was able to attract a capacity crowd. Since that time, as the sense of imminent crisis has gradually subsided, most therapists have grown much less interested in such crystal-ball gazing. Many appear to have accepted the fact that they no longer live such sheltered lives and have adapted to the economic realities of the mental health field today. In fact, lots of clinicians talk confidently about having weathered the storm, freeing themselves from managed care and, in some cases, recasting their services as coaching or consulting so as to emancipate themselves entirely from the world of corporatized mental health care.

But is this just another example of therapists’ notorious head-in-the-sand attitude toward the business of therapy? What does lie ahead for the more than half-million psychiatrists, psychologists, social workers, mental health counselors, marriage and family therapists and other professionals who continue to call what they offer the public “psychotherapy”?

Lacking the sense of urgency that accompanied the dawn of managed care, therapists today seem to have little interest in the cautious generalizations and policy jargon of health care industry analysts, while few of their clinical colleagues have emerged as leaders with a compelling grasp of the Big Picture of therapy practice in the 21st century. So when one hears a quote like “health care delivery in 20 years will bear as little resemblance to the managed care organizations of today as Henry Ford’s Model T had to space technology,” most informed observers can quickly identify the source–Nicholas Cummings, psychotherapy’s most quotable soothsayer and, arguably, one of the prime architects of modern mental health practice.

For the last 40 years, Cummings has cast himself as both a friend to the ordinary practitioner and a visionary capable of seeing just around the curve to the next stage in the evolution of the health care marketplace. His contributions to the field are almost indistinguishable from the signal turning points in the delivery of therapy services over that period. The story of his career reveals much about the changing economics of mental health and the emergence of much of what we now take for granted about how therapy is practiced and the personal career options available to today’s practitioners.


The Birth of Coverage for Psychotherapy

When Cummings started out as a young psychologist in the late 1950s, not a single health plan included psychotherapy. For the actuaries of the health insurance world, psychotherapy was simply too vague and ethereal to be taken seriously. But Sidney Garfield, cofounder of Kaiser Permanente, the nation’s first HMO, had become increasingly aware of complaints from overworked physicians within the Kaiser system about the time spent dealing with “hypochondriacs”–patients who required attention for problems that had little to do with physical disease. Believing that psychotherapy might be the key to reducing the workloads of his physicians and realizing enormous cost savings, Garfield hired Cummings, who had recently resigned from the graduate faculty at Cornell University after only three weeks, unable to tolerate the bureaucratic snail’s pace of academic life. Cummings’s assignment was to investigate the impact of including psychotherapy as a benefit in the Kaiser plan.

Instead of viewing “hypochondria” as evidence of pathology, Cummings began by normalizing what he termed “somatization”–the predictable symptoms of the stress or underlying psychological issues that are part and parcel of any major medical condition. He designed a pilot project with 30,000 Kaiser subscribers, offering them–for the first time–the option of seeing a physician-referred psychotherapist for a $5 co-payment. By the end of his three-year study, Cummings concluded that as many as 60 percent of physician visits were based on somatized complaints and demonstrated that therapy could save medical and surgical dollars far beyond the money necessary to provide psychological services. Hence the term “medical cost offset,” the economic rationale that fueled the growth of mental health coverage–and, ultimately, the mass impact of therapy on American culture–was born. As a direct result of Cummings’s work, in 1963 Kaiser Permanente became the first health insurer to include psychotherapy as a regular benefit, with the rest of the insurance industry soon following suit.

Over the next two decades, Cummings became a member of a core group of insurgent psychologists within the American Psychological Association (APA), dubbed by their adversaries “the dirty dozen” (even though there were 14 of them) because of their penchant for unconventional guerrilla tactics in challenging the association’s status quo. Along with his co-conspirators, Cummings set out to galvanize the staid, academically oriented APA into furthering the growth of psychology as an independent clinical practice. Cummings and his allies led the way in the battles for “freedom-of-choice” legislation in the ’60s and ’70s that opened the way for psychologists (and later social workers and other mental health professionals) to gain licensure and the right to be reimbursed alongside psychiatrists. Determined to offer an alternative to traditional academic clinical training, in 1969 Cummings also founded the California School of Professional Psychology, the first professional school of its kind, that offered doctoral-level clinical training emphasizing experiential learning, personal therapy as a requirement for trainees and a faculty of practicing clinicans rather than academics who, as Cummings puts it, “had never seen a patient in their lives.”

By the mid-1980s, Cummings became convinced that the issue for therapists was no longer recognition and reimbursement, but a sea change in the fundamental economy of contemporary health care. His assessment: “The cottage industry which constituted a fractionated and disorganized non-system of health care was about to industrialize.” He urged psychologists to become leaders in the inevitable movement toward a more coherent, cost-conscious approach to health care, rather than ceding the field to corporate interests. He argued that efficient, targeted treatment was not incompatible with effective clinical services and, by way of example, he founded American Biodyne, a model for the kind of practitioner-run national company he advocated that grew to serve 14.5 million enrollees in 39 states by the time he sold his interest in it in 1993.


Today, at 77, ever ebullient and able to get by with only three hours of sleep a night, he lectures widely and runs two foundations devoted to furthering the cause of quality mental health care–the Foundation for Behavioral Health and the Nicholas and Dorothy Cummings Foundation. And, as the following conversation reveals, one of his favorite pastimes still is foretelling the future of psychotherapy and the nation’s health care system.

The Industrialization of Health Care

Psychotherapy Networker: Let’s start with a typically provocative quote from a paper you wrote a few years ago–“The transition from managed care to the next phase in the industrialization of health care has already begun.” Most therapists I know have struggled mightily to make their peace with managed care as it exists today, so what will we need to do to adjust to this next phase that you’re talking about?

Cummings: Since the ’80s, along with the enormous growth of managed care, we’ve seen all the managed care companies swallowed up into a few huge corporations. Today two companies–Magellan and ValueOptions–control 40 percent of the managed behavioral health care market. The 5 largest managed behavioral care companies control 50 percent of the market and the top 10 companies control 98 percent. But along with the mergers and the growth of these gigantic corporations, one problem has become clearer and clearer–these companies are now run by people who don’t have a clue about how to deliver mental health services and, in the privacy of their own boardrooms, they’re facing that fact. And so, even though they won’t admit this publicly, they’re surfeited with complaints and drowning in malpractice suits. So they’re getting out of the behavioral care delivery business and beginning to reorganize themselves pretty much as third-party payers.

PN: So who will be stepping in to actually provide mental health care?

Cummings: The managed care companies are beginning to “outsource it–that’s the word the industry uses for doing it out of house. For example, since the beginning of this year, Magellan, the largest managed behavioral care company with 60 million covered lives, has sold all the group practices it operated, most of them back to the providers themselves. They’re now just administrators, completely out of the service delivery business. So the next great trend that we’re starting to see is the emergence of large group practices run by providers who are taking over the delivery of health care. And the practices that are successful are those that have learned that if you concentrate on effective, efficient therapy, there’s a bonanza to be made. They’re out from under managed care–they now contract with managed care.


PN: And what will determine which of these groups will actually make it?

Cummings: Most of these groups start out saying, “Well, we’re going to do better than the managed care companies did. We’re going to make sure that the patient gets what the patient needs.” Of course, they then find out that they’re swimming in red ink because they haven’t learned to differentiate between what gets the job done and what just feathers the nest of an individual practitioner. They’re really two very different things. For the solo practitioner–the longer the thing takes and the less turnover there has to be, the better you do; plus you don’t have to have as many referrals. But from an economic standpoint–and there’s just no ignoring this–the opposite is true. The faster you get the job done, the more likely you are to make a profit. The point is to make therapy both effective and efficient.

Unfortunately, most practitioner groups don’t have a clue how to do this, so the ones that are doing the best have finally admitted that they’re economic illiterates and are beginning to bring in the right kind of managers to help them do it. So you’ve got an incredible paradox here–the managed behavioral care companies are outsourcing the clinical side and then the practitioners are outsourcing the management side. So you’ve got three levels of outsourcing here. Anyway, that trend is in full swing, and when a huge company like Magellan decides it no longer wants to be a deliverer of mental health services, you can begin to see where the industry is headed.

The Therapist Workplace of the Future

PN: Your other big prediction about the future of health care is that the majority of mental health services will be dispensed in medical primary care facilities, with therapists located right across the hall from physicians. So are the managed care giants proponents of this new kind of “integrated care”?

Cummings: Even though the managed care companies pay tremendous lip service to the integration of care, for the most part, they’ve done a miserable job of trying to bring it about. They are organized to provide “carve out” services, and how in the world to “carve in” is beyond them.


PN: But wait a minute. Aren’t there tremendous economic incentives to reducing physician visits by “carving in” mental health services as part of primary care?

Cummings: That’s true, and that’s why they have tried to do it, but they have found out that they don’t know how. Look, the success of the managed care industry has been tremendous. In 1993, the Congressional Budget Office predicted that by 1998 health care expenditures would reach $1.7 trillion. In fact, in the year 2000, health care costs had reached only $1.3 trillion. Managed care has saved the United States somewhere between $350 to $400 billion last year alone! Congress, literally, balanced the budget on what they saved on Medicare and Medicaid by farming out the services to managed care. So the managed care companies don’t want to change. They don’t want to do something they don’t know how to do. And most of all, they don’t want to disturb a huge profit center unless they absolutely have to. How can I explain this? I mean, it’s like asking the members of the chauffeurs’ union to suddenly all become airline pilots. You’re either a pilot or you’re a chauffeur. It takes a lot to stop physicians from doing what they are trained to do. A patient comes in week after week with the same symptoms and the physician will repeat the same “standard” test–electrocardiograms, blood tests, X-rays–trying to chase down some physical disease. And when one physician has had it, there are always more doctors with whom to start off the whole process again. And unless the patient mentions a psychological problem, most physicians have not been trained to think of referring to a mental health specialist.

But the important thing to remember about integrated care is that it’s not enough just to change a few components in an otherwise traditional medical system. That’s like adding a few drops of red paint to a 50-gallon can of white paint. You have to approach every primary care problem by including attention to the behavioral care issue as well. That’s true integrated care.

PN: If there is so much resistance within traditional medicine and from managed care companies satisfied with their current profits, where is the impetus for change coming from?

Cummings: The real impetus for integrated care is coming from the employer. By now, they are familiar with the medical cost-offset literature that has consistently found that 60 to 70 percent of visits to physicians are made by people who have no organic disease, but whose primary problem is that they are somatizing stress. They know that there are billions and billions of dollars to save on the medical and surgical side, if those people could be treated by mental health professionals instead. So employers are starting to pressure the companies out there to change the way they deliver health care, which will have a huge impact on therapists.


PN: What about the people who are in private practice today? As I talk to therapists around the country, it seems that most of the experienced clinicians I know are able to be quite successful in private practice. Will this trend toward integrated care affect their livelihood?

Cummings: Back in 1996, I predicted that as the managed care companies continued to fail in delivering adequate and quality mental health services, consumers would be willing to pay out of pocket for private care that wasn’t covered by insurance. But I also predicted that this “boutique market” would only last for a few years. It was a transient thing, a bubble, that was going to be very much subject to economic times–boutiques don’t do well in recessions–and could never grow above five to eight percent of the market. I based that percentage on the fact that in every country that has universal health care, whether you’re talking about Sweden or the United Kingdom, no more than five to eight percent of the population is willing to pay out of pocket for services that are insured. So the boutique market can be seductive, but it’s a transient thing.

The success of the boutique market is inversely proportional to the number of people in it. The people who got into it first are doing very well. But if 30 or 40 or 50 percent of practitioners out there decide to go after the out-of-pocket, fee-for-service clientele, they’re going to find that there’s a very, very small clientele out there–too small to keep a large number of practitioners in practice.

Advice for Therapists

PN: Okay. If that is the big picture, what do you say to the individual practitioner who’s trying to prepare for the contingencies of the future? As a therapist, how can I best shape my own destiny, rather than having the marketplace shape it for me?


Cummings: First, don’t get sucked in by the bubble that we’re seeing now because some private practitioners seem to be doing so well. Second, realize that psychotherapy is finally going to go where it should have gone from the very start–to be an integral part of general health care. So the most important thing you can do to prepare for the health care system of the future is to become proficient in health psychology–the application of behavioral and psychological techniques to medical conditions. There is no such thing as a physical illness without its behavioral dimension. For example, depression is an accompaniment of almost every chronic condition, and non-compliance with medical regimens is one of the costliest issues within our current health care system. Some conditions are especially notorious for non-compliance. The worst is hypertension, probably because with hypertension, patients often don’t feel any serious discomfort. They just suddenly have a heart attack; there’s no incentive to change their lifestyle. Hypertension, diabetes and asthma account for almost 30 percent of all the medical expenditures in the 25 to 55 age group, and it’s mostly because of non-compliance and problems in handling stress. But to tease out the psychological component of patients’ problems, therapists will need to know much more about the whole range of physical diseases.

PN: On a concrete level, how will therapists actually spend their time in the kind of health care system you envision?

Cummings: Most of their time will be spent leading time-limited, protocol-based, psychoeducational groups that have been shown to reduce medical costs and improve patients’ functioning more than traditional medical treatment. One type of group might be called “disease management” groups–these are designed for people with the same medical condition: rheumatoid arthritis, asthma, diabetes–all of which are chronic, have no biomedical “cure” and are extremely frustrating conditions for traditionally trained primary care physicians, who don’t really know what to do with these kind of patients once the diagnosis is made. And then there are “population-based” groups that address conditions that are not primarily medical–like Borderline Personality Disorder, depression, substance abuse, Panic Disorder–but which impinge drastically on the medical system.

PN: Is it groups like that you have in mind when you say at least 50 percent of the mental health services of the future will be psychoeducational?

Cummings: Correct. The future of health care will be based on increasing the self-efficacy of people in dealing with all the chronic conditions that modern medicine can arrest but not cure and providing psychological services in a much more effective and efficient way. With many medical problems, therapists in the future will be involved with helping people learn the specific things they can do to influence the state of their health, for example, monitoring their own blood sugar, their own exercise, their own stress level and so forth, getting them out of what Martin Seligman calls “learned helplessness.” A major role for therapists in the future will be getting people out of taking the position of “I’m helpless. I may as well adjust to my illness.”


PN: And with psychological problems, do you also believe that group interventions are more effective?

Cummings: That’s what the research seems to be telling us. The differential between a group program for substance abuse and individual psychotherapy is so astronomical that nobody even argues about it anymore. But we are beginning to see the same thing with problems like depression, agoraphobia, panic and anxiety disorders.

PN: Many therapists believe that protocol-based treatment leaves out the most important elements that make therapy work. What do you see as the essence of an effective protocol?

Cummings: That it’s research based. You construct a protocol and keep trying out and measuring your results. There is no such thing as a finished protocol–you’re always reevaluating it and trying it out. But I think there are a few elements that we know are necessary ingredients, whether the protocol addresses a medical or a psychological condition. All protocols have an educational component. Patients learn very frankly, with no punches being pulled, what diabetes is or what borderline personality is or what Bipolar Disorder is. Every protocol teaches patients how to monitor and evaluate their own condition–diabetics learn to monitor their blood sugar, people with Borderline Personality Disorder learn how to monitor their mood and their sense of being blown like a leaf in the wind. Every protocol has a buddy system and a peer culture that the therapist can utilize. I cannot think of any psychological protocol in which exercise would not be an important component.

PN : With all of your confidence in protocol-based approaches, you’ve also written that two-thirds of the people within any of these population-based, group approaches are going to need individual attention at some point. Could you explain that?

Cummings: People are very diverse, even if they share a common condition. When someone hits a snag in a program, there should always be the option of seeing him or her individually as needed. But I believe that only 25 percent of the therapy of the future will be individual. Actually, that’s 25 percent of the time allotted, and much less than 25 percent of the people being treated. Because if you have a practitioner who spends 25 percent of her time in individual therapy and 75 percent in time-limited group psychotherapy and psychoeducational disease and population-based models, 75 percent of the practitioner’s time will yield more like 90 percent of the patients. But clearly practitioners of the future will have to learn how to do group psychotherapy in time-limited modules. They’ll have to learn how to do individual therapy that’s focused and targeted, not open ended. And therapists of the future will have to take business courses in graduate school, just as physicians are starting to do in medical school.


PN: What will they learn in the business course?

Cummings: How to balance a budget and maximize their time. Most therapists couldn’t balance their checkbook. So they have no way of knowing that all the things they’re doing are going to plunge them into the red when they have their quarterly accounting. They need to learn the kind of business discipline that says, “Wait a minute, what is the most effective and efficient treatment I can give this patient?” Most of all, therapists have to finally get over the belief that therapy should take as long as it takes, no matter the cost. We no longer live in a world that permits us to think that way.

Richard Simon, Ph.D., is the editor of the Psychotherapy Networker and author of One on One: Interviews With the Shapers of Family Therapy . Letters to the Editor about this article may be sent to


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