Basic considerations of independent practice for ECPs

At the 2012 APA Convention, Div. 37’s Early Career Psychologist Committee hosted an excellent mentoring symposium that featured several senior-level psychologists from a variety of career paths. We’ve decided to invite some of the presenters to write a summary of their presentations for our ECP Advice Column. For this issue, Dr. Samuel T. Gontkovsky, Director of Neuropsychology for Memory Therapeutics in Palo Alto, provides guidance for those seeking advice about going into private practice.

Early career psychologists (ECPs) often find the idea of independent practice exciting, their thoughts filled with images of making lots of money and being their own boss. Without question, independent practice in psychology has numerous benefits. There exist a multitude of complex issues involved in establishing an independent practice, many of which ECPs are generally unaware. I will briefly discuss several of the key points ECPs should think about before starting down the road to independent practice. First and foremost, all states require psychology practitioners to be licensed. Board requirements vary from state to state, so individuals new to the field must ascertain whether they meet the stipulations for licensure in the location they wish to practice.

Next, ECPs considering independent practice must have knowledge of the market for the services they wish to provide as well as their areas of expertise/competence. Some questions to ask oneself include, 1) What kind of practice do I want to establish?; 2) Will my work involve assessment, therapy, or both?; 3) Will my clients consist of children, adolescents, young adults, and/or older adults?; and 4) How are the needs of the community in these areas presently being met? In other words, where are potential target clients currently receiving the services I intend to offer in my practice?

Choosing a suitable physical location for a new practice is critical. Easy accessibility and adequate parking are obvious but important factors. Many clients prefer not to be seen by others (e.g., friends, acquaintances, coworkers, etc.) entering the office of a psychologist, so close proximity to high-traffic public areas could be problematic. Some psychologists practice from a home office, but this presents its own unique set of concerns, including exposing clients to aspects of the practitioner’s personal life.

It is generally recommended that individuals considering independent practice develop a formal business plan, which is simply a statement of goals and plan for attaining those goals. It serves as an operational guideline, or decisionmaking tool, and requires periodic revision depending on such things as the progression of the practice, unanticipated changes in the market, etc. If a loan is required in order to get the practice started, potential lenders may ask to see the business plan during the application process. In addition to the cost of procuring physical space, independent practitioners will have to consider expenses associated with furniture, office supplies, utilities, testing materials, books, continuing education, licensure fees, personal salary, and staff. If an administrative assistant is not hired to perform front office functions, the psychologist will be required to answer phone calls, respond to emails, schedule clients, verify insurance, bill, and maintain records. Many new independent practitioners elect to perform these duties until it no longer is cost effective to do so, i.e., they have enough referrals such that continuing to do these activities prevents them from accepting new clients.

Included in the business plan may be whether the practice will be incorporated as well as the manner in which clients will pay for services. Psychologists considering independent practice will need to determine for which insurance panels they will apply as well as whether they will accept Medicare and Medicaid. Those electing to perform forensic work generally will be less reliant upon insurance, as payment for rendered services in most cases will be made by an attorney or court.

Independent practice can be incredibly lucrative, although most sources suggest anticipating losses for approximately two years. One of the most common complaints I have heard from independent practitioners revolves around feeling isolated from peers. This may be overcome in several ways, including teaching psychology courses as an adjunct faculty member, becoming involved in professional associations, and consulting at local clinics or hospitals which may be short staffed and welcoming of outside practitioners as consultants.

All of the aforementioned points must be considered by ECPs not only in the context of the various laws, rules, and regulations governing the practice of psychology and business in their geographic area but also in light of professional ethical principles and guidelines.This article highlights only a small number of the issues when considering independent practice. There exist several resources available in print and online to offer guidance to individuals desiring to establish an independent practice in psychology. I also would encourage ECPs weighing this career path to seek information from psychologists with experience in independent practice. Local individuals may be reluctant to share too much information for concerns of competition for clients, but others can always be found through mentors and former professors and through various professional list serves. In addition, before venturing out alone, ECPs may wish to consider joining an existing group practicein order to “learn the ropes” and become familiar with operations in his type of setting.