referrals for stable caseload

How many referrals do you need for a full caseload?

Posted in Delivering Therapy Services
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One of the early concerns when starting to build a practice is how to have enough referrals for a full caseload. I suggest that 1000 sessions per year is a good target when starting out. The math is easy: 50 weeks x 20 sessions per week. Of course, there are other ways to get to 1000 sessions. For more all the factors involved in calculating therapist pay see: How to increase therapist pay in private practice.

Surveys show that when a client comes for treatment, they will stay, on average, for 8 sessions per course of treatment. In the practice I managed, we did our own internal studies across our 40 clinicians in our three locations. We found that on average each new client stayed for 10 sessions within a years timeframe. 

This is actually a pretty incredible number to think about. It means that on average, for even referral we can land in my schedule, I will have 8 to 10 sessions. If I collect $100 per session that is $800 to $1000 for every new case, on average.

This highlights just how important it is to remove as many barriers to getting into your schedule as possible. Every missed opportunity is significant income loss.

The formula

With this 8 to 10 session number, we can calculate how many referrals it takes to generate a 1000-session caseload.

Putting the numbers together looks like this:

1000 ÷ 8 = 125 cases per year, which is almost 10 per month, or 2.5 new clients per week

Of course, they do not all need to be totally new clients. Returning clients are valuable as well so maybe that 2.5-new-clients-per-week is a little inflated. Nevertheless, we still need a lot of new clients to grow to full-time.

How to generate enough referrals for a full caseload

Firstly, we increase the effectiveness of our marketing efforts if we stay in the same community for a long period of time. Building enough referrals for a full caseload is in many ways about staying in the same location for years. Former clients, many who become returning clients, are your best advertisement. They are your walking billboard leading to more than enough referrals for a full caseload.

Secondly, I make the argument in many of my posts on marketing that the largest factor in marketing success is consistency. We are mistaken if we believe any one effort will do the trick. We fill the bucket with many small drops of marketing. For more on these topics see these:

So how many contacts do we need for a full caseload?

So this leads to the mystery question:

How many positive contacts with referrers do you need to make to have 2.5 new cases show up each week?

Another way to ask this is, “how many people have to consider calling you for therapy for each one that does actually call?”

No one knows the answer exactly. But clearly we can see that lots of people need to know about us to have a sufficient number who actually do call. The number is probably way more than 2.5 contacts per week.

This highlights the importance of consistent marketing efforts in order to develop the referrals you need for a stable caseload . See how we did it in this post: A community-based marketing method: Community Connection Plans and The benefits of creating demand in your community.

Variability

In the practice I managed, we learned that not all clinicians needed the same number of new cases to stay full. They varied a lot in how many new referrals were needed to support their full-time caseload. From our study, our therapists ranged from about 50 to 140 new cases a year to support a “full-time caseload.” Clearly such large variability suggests that there are many factors that affect how many actual referrals are needed. 

In other posts, I analyze the factors contributing to those therapists who had higher retention rates. They required fewer new cases to sustain them. I was looking to see if I could find patterns that keep people engaged in therapy. See if you agree with our analysis. 

Read these posts:

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  1. Chirag Gandhi says:

    Hi. Thanks for writing this great article. I am considering purchasing a Mental Health franchise and I am in the early stage of doing my due diligence. This website has helped me a lot so far. A question is – With insurance reimbursement being so tight, Is it worth getting into a franchise system? Because in addition to the regular expenses that practice has, a franchisee also has to pay a franchise fee and that could be another 7% added to the expense line. Could a franchise in this space be a good idea? Thanks

    1. Dr. David Norton says:

      In my experience, an additional expense of 7% would make profitability a serious challenge. However, if the franchise company is covering things, that in a more traditional stand-alone practice would be significant expenses, it might work. It will come down to what one gets for that 7%. Margins have always been tight, (see why here: https://growingourpractice.com/little-wealth-in-mental-health-businesses/) though these days, demand for services is super high. If one can find the therapists to work in your organization, there is money to be made. But I have to say, therapists are also in high demand right now so your organization will be competing for staff. Clinicians are hard to find and hard to keep.

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