THE CURRENT STATE OF MY PRACTICESteven Walfish, Ph.D.Private Practice 101: Boot CampThe Practice Institute
2Income/Outflow• Making a profit in private practice is a simple concept: Have more money come in than goes out• Therefore, it is important to know where your money flows in from and where your money flows out to
3Where Does Money Come From?What percentage of your income comes from:• Psychotherapy• Assessment• Consultation• Writing• Teaching• Research• Developing Specialized Products and Lines of Business
4Where Does My MoneyGo?• Bank Charges • Parking• Billing/Collecting • Photocopying and• Books and Journals Printing• Capital Equipment • Postage• Continuing Education • Professional Services• Dues for Professional • Psychological Tests Associations • Rent• Insurance • Telephone• Marketing • Office Personnel• Office Supplies
5Income SourcesHow many income sources do you have withinthe categories?•For example, who sends you customers orincome/work opportunities? Are they physicians,attorneys, EAPs, the Internet, former clients?
6Income Sources - QualityWhat are the quality of these sources?•Do they provide referrals that generate small,medium or large amounts of income?•Do they pay quickly and reliably?•How much administrative time is involved ingetting paid?•If they do not provide large income do theyproduce anything else of value to you? e.g.meaningful work, the possibility of other largesources of income?
7Income Sources - Insurance• If you take insurance which pay the best? Cigna vs. UBH. vs. Value Options vs. Magellan vs. TriCare vs. BC/BS vs. Medicare vs. Medicaid vs. Workers Comp vs. ? ? ?If you have a full practice it is helpful to know this information so you can systematically begin to: (a) ask the company to negotiate higher reimbursement from the lower payors or (b) wean yourself away from them the lower payors.
8Shaping Your Practice Towards Income• If you know where your income is generated from, or where it could be generated from, then you can potentially shape your practice towards higher income activities.• For example, when I lived in Washington State SSI paid $145 per evaluation and Workers Comp $120 per hour for therapy.• 10 hours of each per week = $69,600 + $57,600 for a total gross income of $127,200 for 20 hrs a week for 48 weeks per year
9Outflow of MoniesThe amount of money that goes out often depends on your own values about money, how much you want to do yourself, and how much you value your time.
10Values about Money• Do you need top quality, class-A everything?• What kind of an impression do you want to make on your clients?Where you practice, the furniture that you have in your office, the amenities offered - all communicate things to your clients.
11How Much Do You Want to Do Yourself?• How much control do you need?• Do you feel comfortable delegating?• Do you have the personality to do most things on your own? (e.g., if you have ADD we suggest not doing your own billing!)
12How Much Do Your Value Your Time?• Time is a limited commodity• If you delegate your billing it comes with a cost. However, if you do the billing yourself that takes your time.• Same with charting your notes or dictating your notes.
13Earning/Saving Money While Standing StillHow else can you increase your bottom line?Some examples:• Renegotiating your phone bill• Moving to a less expensive office• Changing to banks who offer better terms• Renegotiating a loan• Getting rid of a land line