Task Force Contributors:
Lillian Comas-Diaz, PhD
Carol Goldberg, PhD
Lynne Hornyak, PhD
Tammy Martin-Causey, PhD
Nancy Molitor, PhD
Brian Ramirez, PsyD
Diane Sanford, PhD

IP Article Contributors:
Lillian Comas-Diaz, PhD
Carol Goldberg, PhD
Lynne Hornyak, PhD
Tammy Martin-Causey, PhD

Division 42’s 2006 President, Lillian Comas-Diaz had a vision for the future of psychology. She was interested in expanding the Boulder model of scientist practitioner by adding the business designation. The previous year she wrote about the present and future of the practice of psychology by exploring several business avenues for practitioners. She found that the conventional way of conducting psychological practice was not keeping up with general public expectations. While media psychologists tend to popularize the profession, they also identify new avenues for professional psychology. Thus, we have an informed public who shapes the delivery of psychological services. This process gave Lillian the impetus for the 2006 Task Force, Expanding the Business of Psychology. Tammy Martin-Causey, PhD joined forces as chair and the vision was further developed. This article is a summary of the task force activities. A full report has been made available to Division 42 for distribution.

Goals of the Task Force

There are two main goals of this task force. The first was to examine an emerging area of practice to determine those variables that make one successful in growing a niche (Partnering with Business). The second goal was to explore an alternative model so that we can start to expand our vision and thinking about the business of practice in order make our practices more viable. The Concierge Model of Practice was not researched as an alternative model in an effort to convince people we should be practicing like this, but as a way to expand how we view the business of practice. Recommendations for a strategy are given that will assist practitioners to develop lucrative, thriving practices regardless of the market forces to compete in today’s direct to consumer market.

History and Background

Today’s market for the new psychologist is filled with many choices and challenges. Historically, when psychology was not well known and virtually non-existent in the healthcare industry, psychologists successfully fought to obtain provider status with insurers. For a period of time, a practitioner could depend on referrals and payment from third party sources and make a good living. A psychologist could start a practice and not have to think much about generating income through marketing as a traditional business. In recent years, there seems to have been a paradigm shift. In many geographic areas, it is difficult to obtain the market value for services via just insurance reimbursement. In some areas, insurance panels are closed to new psychologists unless they are part of a large, established group practice. Because of these trends, some entrepreneur-type psychologists have decided to run successful practices independent of third party payers. They are trailblazers much like the group of psychologists who before them obtained our status as health care providers. We are learning that there is no one right way for independent practice. Practitioners have to consider their community, their own personality, and their unique market forces before making decisions about how to shape their practice.

Market forces are nudging the practice of psychology to expand beyond the model of the health care provider who is reimbursed by third party payers. Although this will probably always be one setting for the application of clinical psychology and for many, it works very well; today’s psychologist will need to explore new ways of staying viable with a thriving practice. We have to learn the basic business practice of diversification. Those psychologists in the division who have developed niches and educated other psychologists on how to access such populations have laid much groundwork. As we move into this world of the new consumerism, marketing and approaching private practice as a business is imperative. There are many gaps in our knowledge and research base. Many professions have marketing research data that suggest the most efficient ways to reach certain market segments, return rates on marketing strategies, and how to modify services to meet the demand of the consumer. As a profession, we are sadly lacking in this area.

Theodore Levitt, author of “Marketing Myopia” (July-August 1960, Harvard Business Review) presents an interesting perspective on growth industries. He surmises that there is no such thing as a growth industry; rather there are businesses that create and capitalize on growth opportunities. His opinion is that every growth industry is in the process of decline the moment it starts. Psychology is no exception. In order to remain viable, one has to continually define and redefine the purpose of the practice and remain client-oriented and not product-oriented (focus on client and client needs rather than treatments or services provided). Levitt further proclaims that if your product line has an expanding product, then there is no need to think about how to expand it. One becomes stagnant and the business suffers decay before it is noticed. We have seen this happen with psychological practices and now need to understand marketing principles in order to keep our practices in a state of growth and continually moving forward and adapting to market changes.

How do We Expand our Vision?

Carol Goldberg, PhD, ABPP engaged in an interesting project in NY that was aimed at expanding this vision. She developed a sound bite that is being used by the NYSPA in its Public Service Announcements on TV and radio. “Psychologists are the People Experts” is a five-word slogan that indicates psychologists have expertise in everything relating to all types of people at various stages of growth and in all types of settings. Her research has led to the expansion of how we think of practice. Beyond the more familiar areas of consulting and media, she suggests independent practitioners can expand into areas such as business, government, transportation, technology, and finances. For example, in government, a psychologist can offer expertise for departments such as fire and police. Needs include in-service training, stress management, safety advice for the public, and promoting public health. We are also needed as consultants to legislators and communities. Psychology can offer services to transportation departments in the area of preventing and educating about road rage and reducing public transportation stress from crowding. We can consult regarding safer human-machine interactions and in enlisting public cooperation to reduce environmental hazards. There is also a need for psychologists in the area of technology and finances. Integrating one’s personality characteristics into how one saves, spends, invests and plans for the future is much needed in addition to financial consulting. These ideas are not an inclusive list, but are hopefully starting points for the independent practitioner to brainstorm about when considering one’s work style and local market needs. Division 42 also offers many niche guides to help develop one’s area of practice. We need to expand our vision outside the 50-minute hour focused entirely on correcting pathological concerns. As Carol states, “Psychologists are the People Experts”, so we need to see ourselves as such in all areas of our communities.

One Niche Example: Partnering with Businesses

The Partnering with Business Initiative, spearheaded by Dr. Lynne Hornyak was a part of the task force whose purpose was to create road maps for psychologists interested in expanding their practices to include working with businesses. Again, the purpose of investigating this was not only to further define another niche but to also start psychologists on the path of expanding their vision beyond traditional psychological services when they think of independent practice. The initiative’s strategy was to identify psychologists who are currently providing services beyond traditional assessment and psychotherapeutic services to businesses but who also considered themselves in independent practice, and to gather detailed information from this group regarding opportunities for expanded practice. Detailed methodology and results can be found in the final report of the 2006 Task Force on Expanding the Business of Psychology. Information was gathered through open forums, using a qualitative oral history approach and by completion of an online survey. While the total sample is small (N = 13) they were from various geographic areas of the US and had been working with businesses 3-10 years. There were some consistent themes in the participants’ stories.

1. A number of participants were entrepreneurial by nature. They sought out opportunities in the business arena. Some had few options in their community for working traditionally as psychologists so they innovated. Others “happened into an opportunity”, found the work to be very gratifying, and built on it.
2. Several participants were introduced to companies by people who knew and valued their clinical work, with the expectation that the psychologist could be similarly effective in helping with issues faced by the organization.
3. Participants found that working with businesses allowed them to apply psychological knowledge in ways that were immediately useful and practical, which was very gratifying and encouraged them to pursue this type of partnership.
4. The work provided participants with a significant amount of variety, challenge and stimulation, which they relished.
   Reading the full task force report will give detailed information about people’s responses to questions asked such as forms of partnering, initial efforts in partnering with businesses, knowledge, skills, talents, and personal qualities, lessons learned, and advice from the experts. If this is an area you are interested in, the report gives details about how to get started and what to do.

Early in her career transition, Lynne Hornyak, PhD had been told that “businesses don’t take well to mental health types, so don’t call yourself a psychologist.” To ascertain the validity of this advice, participants were asked what title(s) they use in their work with businesses. Out of 13 participants who responded to this question, 10 (77%) call themselves a psychologist and\or include their Ph.D. behind their name. Dr. Hornyak notes that many clients hire her BECAUSE of her psychological background, not in spite of it. This indicates the need to be aware of the changing market influences and consumerism. The advice she was told may have been accurate many years ago in a certain geographic area with a certain type of business. However, we cannot base current practices on what we learned 10 years, 5 years, 1 year, or even one month ago. We have to constantly be adapting and listening to consumers. Listening to consumers may include the collection of data but may be as simple as going to community meetings and observing what is important to people.

An Alternative Model: Concierge Practice

Brian Ramirez, PhD is a psychologist in independent practice in Tucson, AZ. As a part of this task force, he researched Concierge Practice and found the following information. Although this is a new idea for psychology, it is a concept that has been explored in medicine since 1996 and is currently limited almost exclusively to Internal and Family Medicine. In 2005, there were approximately 800 such practices. Physicians originally started to explore this as a way to “reclaim” their practice, provide personal care, and limit caseloads to a manageable level. At present, many practices report waiting lists of several hundred names and the numbers of practices are steadily increasing.

Trends

Concierge medical practice is similar to a fee-for-service practice in that the practitioner sets his/her fees and the patient assumes the cost of services. Insurance is typically bypassed or dealt directly by the patient. The difference between concierge and fee-for-service practice is that in a concierge practice, patients join by paying a retainer. There is a formal, legal contract specifying services to be delivered. An average insurance-based internal medicine practice will have about 2,500 patients. An average concierge practice will have about 500 patients.

Services offered

Retainer fees range from $1,500 for an individual to $20,000 for a family with extended services. One particular practice charged $2,000 per year and it included a physical, 20 office visits plus many of the following services. The services offered typically include same day appointments, 24-hour phone access, on-time office appointments with the average visit lasting 30-45 minutes, and improved communications with specialists. The level of “customer service” is greatly enhanced. Some practices offer home visits, home delivery of medications, in-hospital advocacy, and transportation to appointments.

The supporters say . . .

Patients and physicians using this model report very high levels of satisfaction. Supporters also argue that increases in physician practice satisfaction, higher incomes, fewer work hours, and no hassles with insurance companies allow for a streamlined, top-tier medical care. Concierge physicians also report that, as a result of a retainer-based practice, they are able to offer more pro bono services compared to a typical insurance-based practice. Physician availability provides a higher level of patient continuity of care and multi-disciplinary communication.

The critics say . . .

There has been strong criticism from some physicians and medical ethicists. Critics contend that a concierge practice violates professional and financial ethics and charge that this practice exacerbates the inequities of the health care system and may lead to a two-class model of healthcare. Critics also contend that the public is already mistrustful of physician’s self-interests and assert that concierge medicine adds to this mistrust. Legal counsel for insurance companies has asserted that accepting money in advance for services to be rendered in the future is by definition, selling insurance. The Centers for Medicare and Medicaid Services is presently monitoring several medical practices that accept retainers.

Summary and Recommendations

This task force examined in-depth the variables that are important for expanding into a new niche: Partnering with Business. It also examined a provocative model for practice: Concierge Practice. In addition to these specifics, the task force reviewed the history of practice, basic business and marketing literature, and is making recommendations as we enter into a new era of consumer-driven services.

The biggest shift in our thinking has to do with seeing ourselves as business people. Psychology is also a business if we are in independent practice. If we adopt practical business and marketing strategies, we can be successful with psychology as our product no matter how the market changes. There is one constant – as long as there are people and we have our own unique personalities, there will always be problems to be resolved. There will always be a need to resolve conflict, increase communication, interface with technology, correct pathology, or achieve more life satisfaction. These things will not cease to exist. What also will not change is the diversity that exists among psychologists in terms of how we define a lucrative, satisfying practice. What WILL change is the meaning and importance people and organizations place on the delivery of such services. With that in mind, we can appreciate the differences that are brought to the table in Division 42. The question isn’t whether we should or should not be on managed care panels or practice inside or outside the health care system. The question is how do we get there once we make that choice? For example, if a practitioner decides to participate with managed care, we have experts in our midst who can guide you in that direction. If a practitioner decides to have a fee-for-service practice, we have experts in our midst who can help with that as well.

So where do we go from here? We have already begun to answer that question even before it was asked. When Nancy Molitor, PhD was chair of the Division 42 Marketing and Public Education Committee in 2005, she spearheaded a project that started to equip psychologists to hone their business skills. Learning modules were offered that included conference call trainings in which members could learn more about marketing their practices and developing their niches in a way that incorporates their unique personality traits and local market forces. There were waiting lists for the these modules and we would like to respond to this need by expanding and offering more in the future. Frank Froman, PhD also instituted a mentoring program for members who want assistance in revamping their practices. Regardless of where our payments and patients come from, we will need to be equipped to respond to a consumer-driven market. We also need to learn how to diversify our practices so we won’t experience a drop in income when there are changes in the marketplace.

Other recommendations come specifically from the data collected from the Task Force. The feedback from the Partnering with Business Initiative indicated that experts in this area are willing to offer their time to provide mentoring, workshops, training and one-on-one services. It was recommended that a special interest group be formed to assist in this. Recommendations from examining the Concierge Model of Practice include evaluating ethical implications of the various practices presented in this model. Again, the question isn’t whether we as a profession will or will not engage in such a model, but what are the guidelines to follow that would make it an ethical practice when some practitioners choose to do so? If we say we as a profession choose not to participate in such a model before examining it further, we are severely limiting our ability to be visionaries.

In summary, we need to be proactive in helping our membership become more visionary, in developing goals for their practices, and in acquiring the skills necessary to achieve those goals. Re-activating SIGs for niche areas of interest, making marketing and business training materials more accessible to members and continuing the mentoring program for those who want to re-design their practices is the future of our success. We can no longer rely on a third party for our success. We can choose to benefit from what they have to offer, but we cannot rely on them for our livelihood. Educating one another on how to be aware of consumer needs is integral for our future. In Levett’s words, every growth industry is in the process of decline the moment it starts. These words can be viewed as dismal or as a springboard for discovering that perfect match between the needs of the psychologist and the needs of the client that makes for a successful, lucrative practice!