The Business of Practice
The practice of psychology may not be dead, however, the practice of psychotherapy as a systematic method of providing mental health care to the older population by doctoral level practitioners is entering a critical phase. It would be foolish to pretend otherwise. We see it happening in general health care, it is inevitable that it will happen with psychology. Several individuals have acknowledged this fact and have theorized about ways of dealing with the rapidly developing changes and attendant problems. I would like to suggest that, perhaps, the best way to approach the rapid demise of mental health services provision, is not by theorizing but rather through the development of a business plan. Why a business plan? If we refuse to accept that our practices are being evaluated by business for the exclusive sake of reducing costs that we are, for all intents and purposes, giving away our professions. It is, therefore, necessary to learn how to speak the same language as the health insurance carriers, and that language is bottom-line business.
Not unlike applied research of outcome evaluation, in general, a business plan requires on to acknowledge threats to success and develop objectives and goals to overcome those threats. While there are many threats, too many to be discussed in this article, a review of the most pressing problems is in order.
At present, approximately nine percent of Medicare eligible individuals have joined HMO-Medicare programs. While this number is still relatively low, it belies the fact that insurance companies are aggressively marketing to this age group and expectations run as high as 60 percent penetration within the next few years. Individuals not on the provider panels of the HMOs may be cut out and no longer able to provide reimbursable psychotherapy.
A second problem affecting the provision of psychological services relates to how local carriers determine need. Increasingly, submitted claims are being rejected without cause. The cost of following-up and resubmitting becomes daunting. When claims are rejected with cause the reasons often include an increasingly restrictive number of diagnoses. For example, a primary axis I diagnosis of dementia or eating disorder, or an axis II diagnosis of any sort may cause rejection of a claim. The reasoning goes that these diagnoses are not treatable by therapy and, therefore, not reimbursable.
The problem most often seen as a threat to business is less expensive competition. The same is true for the provision of mental health services. K-Mart is expanding while the stores on Main Street close. Why? K-Mart is less expensive. Their overhead is lower, they buy in bulk and they turn over their merchandise rapidly. A recent report in the Wall Street Journal, however, indicated that both K-Mart and Toys-R-Us which operates on the same principle have been posting losses. Yet many psychologists stand by and watch as nursing homes and hospitals continue to turn to less well trained individuals and limiting therapy session time thus lowering their overhead. At some point there will be a price to pay but, as one hospital administrator said to me, "We'll ride it out". The implication was that whatever costs may ultimately accrue as a result of using less expensive providers will work out financially over the long run; the K-Mart philosophy.
Essentially, these three areas of difficulty can be conceptualized as restricting penetration, restricting access and increasing competition. A business plan to respond to these threats would include some combination of a sales and marketing plan as well as an advertising or "packaging" approach to psychotherapy as a service. As traditional mental health specialists we bristle at simply hearing these terms let alone having to think of them and use them as a plan of action. Nevertheless, with a little creativity we might just adapt to this new, very necessary, approach.
To understand business principles requires that a distinction be made between sales and marketing. In sales, there is a product that is being offered for sale. Essentially, a sales person is selling himself, convincing the buying public to purchase the item that is being offered. Marketing on the other hand, suggests that a service is being offered, a service that the public needs. This service is not so much being sold as offered to those who see the need for it. And, the need has to be well-established. While there is a great deal of data suggesting the efficacy of psychotherapy, I believe, we have not done enough as individuals, as well as organizationally, to market psychology. For example, data is only now becoming available which indicates that psychotherapy outcome is adversely affected by the provision of services by individuals who are not as well trained and who are at a Masters level or below. A marketing effort would not necessarily overtly emphasize this point, however, it is an aspect that can not be overlooked when approaching the topic of who becomes a member of an insurance company's provider panel.
Similarly, an appropriate marketing approach would be directed at negating the K-Mart philosophy. The emphasis would be placed on the fact that less costly care does indeed cost more in the long run and those costs can not be "ridden out". At some point K-Mart will have to decide if it can afford to continue to open stores, or to retrench and deal with its financial losses. When dealing with health and quality of life our marketing must show that we can not be so glib. That our services are of critical an don-going importance.
The business approach to marketing includes packaging, in all its varied aspects. Packaging includes how we package or present ourselves our patients and our services to the general public and especially the insurance companies. To present ourselves properly we must show ourselves to the public as the best choice of professionals to provide the service. Our patient must be presented to their insurance carriers as individuals whom we can treat for their unique needs regardless of the diagnosis. The packaging of our services can not be in the form of an amorphous approach to talking about ones feelings in a coffee klatch atmosphere. Still too few people understand the work of psychotherapy as well as the major work that goes into the successful outcomes of psychotherapy. It is our responsibility to present that package to the public.
Unfortunately, our graduate schools and internships never taught us about the business of practice. Thus, the concept seems anathema. Indeed, many of our colleagues employed at universities and hospitals believe that because they have not yet been affected too adversely by managed care that it will not have an impact on them. Not long ago a colleague working on a geriatric unit of a large teaching hospital said to me, "My income will not be affected by managed care". Unfortunately, his department was cut in half not long after and he was left unemployed. If psychologists do not learn to speak the language of the insurance companies we may find ourselves foreigners in a land we once thought was home.
To direct comments about the information contained in these pages, please write to marsiske@ufl.edu