Editor's Note

Editor's Note

Creating a Private Practice for the 21st Century

By Rich Simon

July/August 2007

Those of us old enough to have practiced during psychotherapy's Eden, before the managed care revolution, remember that all a private practitioner needed to do to make a good living was hang a framed degree on the wall, furnish a pleasant office with a couple of comfortable chairs, install a tasteful piece of art or two, and wait for the customers to come. When people showed up in our offices, we talked with them about whatever happened to be on their minds, and we did it once, even twice, a week, possibly for years. Best of all, the crass subject of money rarely came up--it didn't have to. With any luck, generous reimbursement checks from the insurance company showed up as regular as clockwork.

Every therapist who hasn't been in a coma for the past two decades knows, at least theoretically, that those days are long past. But just how far past comes as a shock even now. According to the sobering statistics Lynn Grodzki cites in her article, "Harnessing the Winds of Change," the average licensed full-time therapist currently makes a net profit of only $30,000 a year, due mainly to the erosion of the private-pay market and the staggering shrinkage of reimbursements funneled to mental health services from managed care--from 10 percent of all health insurance dollars in 1982 to 1.5 percent today. Managed care fees make up 43 percent of the average clinician's income, and they haven't risen in a decade. To make matters worse, it seems that the poorer we get working with…

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