Work Less, Make More: Why You Should Consider Transitioning to a Private Pay Practice
Right now, more than ever, people are searching for therapists to help them get through these challenging times. Sadly, due to high demand mixed with the mental healthcare shortage, too many people today are left sitting on long waitlists. People are eager to find a therapist that can fit them into their busy schedules. Many are also willing to pay out-of-pocket for the right services and, more importantly, the right person – which makes this the perfect opportunity to transition into private pay.
Transitioning to private pay can do wonders for your practice’s overall success. You can make more money, consider seeing fewer clients, and, best of all, you’ll be working for yourself and not splitting your profits with the insurance agencies.
If you want to stop doing all the extra paperwork, enjoy more freedom to practice the way you believe works best for your clients, and want to make more $$ per session, then transitioning to private pay would be extremely beneficial. If you have been debating or wondering if it’s time for you to make the switch to private pay practice, this is the best time to make the jump.
In this blog post, we will walk you through four reasons why you should transition to private pay, how it can benefit you, and the steps you can take to make the transition as easy as possible.
Why Make the Switch to Private Pay
Most private practices are born from a desire for freedom, flexibility, and the glamourous idea of being your own boss. The dream of only having to work when you want and with whoever you want is achievable. Still, unfortunately, when you work with insurance panels, this freedom and flexibility, along with profits, gets taken away from you quickly.
That is where the concept of private pay steps in to save the day, and operating a private pay practice is a win-win for both you and your clients. Your client gets the high-quality therapy they deserve, and you build a more profitable thriving private practice that you love. More often than not, insurance underfunding creates a win-lose scenario for therapists. Clients get high-quality therapy, but at the expense of the therapist, who struggles under the demands of a large caseload and underpayment.
By working for yourself and not splitting your profits with the insurance companies, you can make more money per session, giving you the chance to consider seeing fewer clients.
When therapists choose to be “in-network,” they must see around 25 or more clients per week to be considered profitable by insurers. This underfunded model creates therapist burnout and can diminish the quality of their sessions.
A schedule filled with too many insurance clients means more work for less money. With each insurance client you see, you’re doing so at a severely discounted rate, and then you still have more unpaid time to account for after the session doing all of the required paperwork.
The best way to avoid burnout is to see the clients you want to see, set your own schedule, and set your own rates, so you’re getting paid what you deserve.
With private pay, you have much less paperwork, and I think we can all agree that minimizing paperwork is a HUGE plus. With so many other moving parts and responsibilities that come with opening a private practice, doing heaps of paperwork every day should not be one of those responsibilities. Paperwork takes valuable time out of your day and can lead to burnout quickly. When you go with cash, there’s a lot less to do, which gives you more time to focus on more important things.
Transitioning to private pay puts your revenue back into your own hands. You have the power to decide your worth, and with this power comes the ability to set higher session fees.
We hear from many clinicians scared to make the transition for fear of losing their current clients. They don’t want to seem greedy, selfish, or unconcerned about their patients, leading to them undervaluing their services. But the work you do is valuable, and you’ve already paid the costs of your education and any training(s) you’ve completed. You deserve to be valued higher than what’s usually collected by insurance companies.
When transitioning from a traditional insurance-based practice, you should expect to “lose” a few patients. However, you can also expect to gain a few new patients – a different type of patient. One that values you and buys into your program and your new payment model.
You started a private practice because you wanted to provide your services on your own terms – private pay gives you the freedom to do just that. When you work with an insurance company or other third-party payer, both you and your client can feel as if you’re being held hostage to the insurance agency’s rules. They’ll ultimately determine what therapy services will be covered (or paid for) and how many sessions they’ll allow, taking away a lot of your business freedom.
It also makes it more difficult for you to see your ideal client. When you switch to private pay, you can determine what patients you want to see, and best of all, you never have to worry about acting as a mental health generalist. You can choose a niche and serve only those clients who match your specific specialty.
How To Make the Switch to Private Pay
Transitioning to private pay is a scary idea for many clinicians. Fear of losing clients, not attracting new ones, or seeming overpriced are just a few of the many reasons some clinicians never make the transition. However, we can tell you that if you switch to private pay, you will start to attract more of your ideal clients. While it may not happen overnight, know that it will happen, and when it does, it will make a world of difference for yourself and your practice.
To help you get started, we have put together a list of 3 simple steps to guide you in your transition to a private pay practice.
Step 1 – Define Your Niche
Get crystal clear about who you do and who you do NOT want to work with. Maintain these standards; if a new client isn’t your ideal client, offer an excellent referral for them (this can also help build referrals for you as well).
If you haven’t already done so, take some time to consider what your specialty will be. Private pay clients are generally paying much more out of pocket. For this reason, they are looking for an expert – someone who specializes in the service they are looking for. They’ll be much more willing to pay a premium for your services when they know you have specialized expertise.
Step 2 – Start Marketing
When moving into private pay, it is imperative to note that your marketing efforts immediately become extra important. Since insurance companies will no longer be giving you referrals, you will have to make up for it by marketing your practice yourself. Luckily though, you’ve got Brighter Vision’s expert marketing team on your side :).
Updating your website can make a massive impact on your marketing and is a great place to start. In today’s COVID world, an updated website is the most critical element to having a successful private practice, which means you should dedicate the proper amount of time and money to invest in a well-designed website for your practice.
Update your website to speak directly to your ideal client’s needs. The more precise you can be when writing the content for your site, the better. Having information relevant to the specific type of client you see or niche you serve will help establish you as an expert in your field and instill trust in that particular group of potential clients.
Updating your website and content on it not only helps you speak directly to your ideal client – it also simultaneously helps improve your page’s SEO. Since most private pay clients are looking on their own to find a clinician, they will most likely be turning to a search engine for answers. No matter which search engine they use – Google, Bing, Yahoo, etc. – you want to make sure you are consistently ranking as high as possible. It’s essential to regularly refresh your website’s content to achieve a good ranking.
Cultivate private-pay referrals. People who use insurance to pay for therapy tend to refer friends and family that also use insurance to pay for therapy. Simultaneously, people who pay cash for therapy generally refer others who will also pay out-of-pocket for therapy. Meaning, as you establish your reputation as a fee-for-service practice, you’ll get more referrals for clients who don’t want or need to use their insurance.
Step 3 – Understand Your Value and Revenue Streams
Develop a specific process for handling new client calls. Generally, with private pay, it’s not just scheduling an appointment with new clients; expect some form of consultation, and have a set price ready to pitch to clients. Since your clients will be paying out of pocket, they want to be sure you are the right fit for them before jumping in blindly.
Before you go out and start consulting with new private pay clients, you want to be able to express how you help, and you need to know the exact value of the services. The ability to do this comes from looking at your outcomes and being confident with the service you offer.
This is a scary concept for a lot of clinicians. The fear of overcharging comes hand in hand with imposter syndrome and often can lead to clinicians undervaluing themselves. Knowing your value does not equate to making false promises; instead, what it actually does is speak to your service’s value. When clients call for a consultation, you should be able to speak directly to how you can help them, what your process looks like, and how much your service rate is.
Consider developing multiple income streams, even if you already have a consistent flow of new insurance clients. Starting a group or workshop or creating an online course will allow you to generate more revenue and referrals while simultaneously reaffirming yourself as an expert in your field.
Final Thoughts about Transitioning to a Private Pay Practice
Transitioning to private pay might seem like a scary task for many clinicians, but it can make a world of difference. Between generating more revenue, cutting back on tedious paperwork, and putting more time on your hands, private pay could be the best solution for your practice.
Right now is the best time to capitalize on this high demand for mental health services. Use this as an opportunity to restructure your private practice to make sure you are generating the most revenue possible to expand your practice and create a more significant impact!