Financial Success in Mental Health Practice: Essential Tools and Strategies for Practitioners


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Building and nourishing a private practice covered
(April 2009 Issue)

�Financial Success in Mental Health Practice: Essential Tools and Strategies for Practitioners"
By Steven Walfish and Jeffrey E. Barnett
American Psychological Association
Washington, D.C., 2009

By James K. Luiselli, Ed.D., ABPP, BCBA

The benefits of being a private mental health professional are many: autonomy, flexibility, specialization and earnings potential. These advantages notwithstanding, a solo practice is wrought with uncertainty, especially for early career clinicians. Thankfully, psychologists Steven Walfish and Jeffrey E. Barnett have written this book, which in their words, "is to help aspiring private practitioners develop the knowledge, skills, attitudes and mindset needed for success in independent practice."

Clinical expertise does not predict business success. The authors acknowledge this caveat with a succinct conclusion: independent mental health professionals must provide a service that people want while making a profit doing so. In fact, they advocate a "spirit of the entrepreneur" as a private practitioner survival tactic.

The book has 12 chapters that are grouped in four sections. Section I, "Mental Health Professionals' Attitudes Toward Money and Business," considers the many challenges managing a practice. Being on your own means there are no sick days, earned leave, reimbursed expenses or paid holidays. Additional considerations are the constraints of managed care, insurance costs and a fluctuating referral base. These and other constraints are handled admirably by the authors, not to dissuade private practitioners but to give them a realistic picture of what to expect.

In Section II, "The Nuts and Bolts of the Finances of Practice," chapters address the advantages and disadvantages of different business models such as sole proprietorship, partnerships and incorporation. The authors' practical advice about office overhead and practice expenses covers everything from leasing arrangements to hiring support personnel to purchasing materials, equipment and services (e.g., outsourced billing, legal representation). Of note, their recommendations for setting, adjusting and collecting fees will help avoid often unanticipated financial pitfalls.

Section III, "Building Your Practice," embraces the pros and cons of managed care, understanding basic principles of accounting and various alternatives for malpractice, life, health and liability insurance. Because private practitioners have many out-of-pocket expenses, this section includes an illuminating chapter that describes other sources of income beyond direct service billable hours (e.g., presenting workshops, public speaking, developing products).

The final section of the book, "Building a Retirement," examines retirement and financial planning, investing and selling an established practice. These issues may be overlooked by young professionals but if neglected, the financial implications can be devastating in later years.

I entered private practice by conferring with more experienced colleagues, reading everything I could find on the topic (there wasn't much) and rigorous trial-and-error. How I wish this book was available to guide my thinking and behavior! I don't know of a single, similar volume that touches on so many facets of building and nourishing a private practice. And though the title highlights financial success as a dominant theme, Walfish and Barnett also speak eloquently about clinical standards and professional ethics. Unequivocally, you can't do better than reading this book and implementing its many recommendations.

James K. Luiselli, Ed.D., ABPP, BCBA, is senior vice president, applied research, clinical training and peer review at the May Institute in Norwood, Mass.