Group vs. Solo Practice?
In the last few years, since the pandemic – the perceived barrier to entry to starting a private practice has become lower than ever. Oftentimes, clinicians leave group practices, in pursuit of greener pastures, with the idea that all they will need to open up shop is a laptop and a psychology today listing.
Unfortunately, many of the hidden costs of running a practice, aren’t readily apparent or explained to the starting clinician- and they end up alone, overwhelmed, and spending most of their working hours doing nothing close to what they spent all their years training for. Here, I will outline the factors to take into account, when considering why you would want to work for us (BPTA) vs. starting your own independent practice:
1) FICA 7.65% in the state of MA- which is covered by your employer in a group, but will be covered by you when in private practice.
2) Steady supply of in house referrals, years of building our practice and name in the community. A well established reputation.
3) Independent practice causes you to spend a lot of extra time that you aren’t compensated for. Depending on how long the group practice has been running- they have most likely honed their systems and hired specialists in areas where you might not have received training in graduate school. They are on average 80-90% more effective at managing many of the tasks required on a daily basis, outside of the clinical work, that a practice owner must address (billing, payroll, bookkeeping, collections, customer service, forms, compliance, marketing, purchasing, systems, finances, growth, etc.) For instance, a larger practice is likely to have an in house biller, who is intimately familiar with the specifics of the practice (not usually affordable to the clinician in solo practice). Their bottom line is often dependent on the practice’s bottom line in addition to years of expertise in collections, and therefore they are likely going to have a higher collections rate than a clinician might be able to achieve in solo practice.
4) A group practice automatically makes the best use of your time. When I was in solo practice, I would constantly ask myself- “is this worth my time, or does it make sense to outsource this?” 90% of the time, it always made more sense to hire someone whether it was related to sitting on an infuriating call with insurance, faxing a form, marketing, purchasing, etc. If you have 20 hours a week to earn income, wouldn’t it make more sense to make sure that all of those hours are spent doing the clinical work that nets you the most income? Working for a group practice allows you to do the work you were trained for, and takes care of the rest.
5) When you are in solo practice- it is not as simple as putting up a website and watching the dollars roll in. You often have to think about marketing, admin, hiring, retention, billing, collections, paperwork, credentialing, compliance, taxes, quarterly filings, malpractice, business licensing, legal, etc.
6) Future trends indicate that we are headed into a recession. This means more and more families will cut back on their nice to haves in favor for their need to haves. One of the first things to go will be expensive, out of pocket therapy in favor of in network providers, who only require a co-pay. It will become increasingly more difficult to get paneled as large insurers are becoming saturated. Working for a group practice, provides a quick and easy in roads to credentialing.
7) What are the overall “household benefits,” of working with a group vs solo practice? You get to spend more of your down time with your family vs on a call with an insurance company. Your mental time is no longer spent chewing over a clawback letter that recently came in from Blue Cross, an angry client, how to manage systems in your practice such as phone lines, a contractor that wants a raise, someone you have to let go, HIPAA compliance, paperwork, appeals, claims, etc. When you are in private practice- you are immediately thrust into the role of small business owner/entrepreneur. When you own any type of business, there is no 9-5 shut off time, there are constantly fires to be put out, issues to solve, clients to manage, and systems to modify.
8) A group practice is likely going to be more well versed and systemized in terms of automation in renegotiating with vendors (phone lines, testing supplies, malpractice carriers, continuing education, website/email hosting, landlords, leasing contracts, etc) as well as insurance companies in terms of asking for higher rates. That means a higher profit margin for them and ultimately you.
9) Benefits- usually a large group practice is going to benefit from the volume of employees and be able to provide benefits for you at a rate that you would not be able to achieve in independent practice.
10) What is the bottom line? What can I expect in terms of dollars and cents when working for a group vs. myself. The industry standard for a therapist is around 50-55% as a w2 hourly employee or a flat fee per session + notes (in most private pay settings). Most practices are moving from a salaried model to an hourly model. This gives you the employee, a lot more say in your earning potential. A group practice owner no longer has to micro manage and “check in,” when your caseload drops. The amount you earn is directly related to how much you want to work that month.
When it comes to working solo or for a group- it comes down to choosing your hard- do you want to do 100% of only what you love and just see clients without all the admin hassles, with your “hard,” being giving up a percentage of your income for someone else to manage that more effectively OR do you want to keep 100% of revenue, with your “hard,” being giving up your mental space to the various headaches that come with running your own business. If interested in learning more about becoming a part of our growing team- please email BPTAoffice@gmail.com
