Creating demand needs to be a constant focus when starting a practice. When any service is in demand, people are generally willing to pay more for it. Furthermore, they tolerate inconveniences more easily for a popular service. This is true in all areas of business. And it is true in therapy too.
Over decades of observing patterns of sessions and collections, I noticed a pattern. Each month I looked at the number of sessions that occurred and the dollars on average that we collected for each session. (This is a simple statistic we use: Dollars Collected ÷ Number of Sessions or $/Session). The pattern was this. Generally speaking, the more a therapist depended for their new cases on insurance companies or on colleagues within our organization, the more gaps showed up in the therapist’s schedule. And the dollar amount collected for each session was lower.
Loyal and committed clients
We can discover why with some analysis. Consider two situations. In our first situation, a client is certain you are the “greatest therapist on earth” based on a referral someone provided. When the client calls and gets into your schedule, what assumptions is that client going to make about your first session? What are the odds the therapy will go well?
Now consider a second situation. Here a client is in your schedule because of an insurance referral. Or perhaps they became your client as a second option. They really wanted to see a colleague of yours but got “stuck with you” because the therapist they wanted had no openings.
The bottom line? A client who is sold on you before even meeting you will stick longer. They are more committed to you and to the process. More committed clients are more willing to work with your schedule and to follow through on any guidance you might offer.
In short, creating demand increases your credibility and the perceived value you offer the client. With increased perceived value comes an increased willingness to pay more for your services, take less desirable appointment slots, and pay your fees without a fuss.
A significant factor affecting the amount one collects per session is the number of sessions that are paid by a managed care or PPO contract. These days it is the rare insurance company that pays full fees for outpatient mental health. If you accept insurance payments then you will be forced to accept reduced fees. So if a significant part of your fees comes from insurance payments, you will collect a significantly lower amount for each session. Creating demand will increase your fees.
Some practice management gurus advocate staying out of insurance networks altogether. In my experience, this is not very practical advice for most. Beginning a practice with “cash-only” clients will slow the development process. Only the most “in demand” therapists with many years of experience can really make that type of practice work well. And they will have to really stay on top of their marketing game to succeed. Additionally, taking only self-paying clients will affect the types of clients able to see you and will influence clients’ choices about how long they stay in treatment.
Whatever you chose about insurance panels, becoming the most “in-demand therapist” in your community opens many possibilities.
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