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Y’all, it looks like we are headed toward a recession.
I started my practice in 2009. Does anyone remember what was happening in 2009? There are echoes of that time popping up now.
What does that mean for our practices?[00:01:00] Stay tuned. I will talk through some potentially concerning statistics around mental health access and finances. I’ll also talk about some ideas to get through this time.
If you are one of those practices who might be seeing some early effects of this potential recession, you may think about joining a coaching group. My mastermind groups are aimed at testing practice owners at every stage of development. We talk a lot about marketing, referrals, good client care, a lot of connections, support, goal setting, and accountability to right the wrongs in your practice and get you on the right path. You can get more info at thetestingpsychologist.com/consulting.
All right, let’s talk through some strategies to get through this economic downturn.[00:02:13] Okay, y’all. Full disclosure. I am not an economist. I don’t know if you knew that or not but that’s the reality. I’m a psychologist, not an economist, but I think it’s important to talk through some of these concerns that we may be seeing as there’s an impending recession.
For the first time in consulting and in our own practice, I am seeing decreased referrals. People around the country are talking about being less busy, getting fewer calls, that sort of thing. And like I mentioned, we are even experiencing this in our own practice, which is wild. This is the first time [00:03:00] ever that I have considered any kind of paid marketing. We’ve always had a steady stream of referrals, but I’m finally considering other options for marketing.
And this is likely related to the economy. So let’s talk about that a little bit.
What exactly is a recession and why is it happening?
We hear this term a lot. Again, I am no economist. Take what I’m saying with a grain of salt. I’m not an expert. But in layman’s terms, a recession is when the economy slows down. At the current point in time, most folks think it’s due to inflation, which is money losing its value because we printed too much. That’s now being controlled with higher interest rates and rising costs.
I think there’s a very basic explanation for describing a recession. I’m sure many of you out there are like, [00:04:00] no, that’s totally wrong. Shoot me an email and I’ll correct it. But that’s a super simple way to think of it. Inflation, that’s now being controlled with higher interest rates. So money losing its value, costs going up, interest rates going higher, bad combination.
Why is this important in our practices?
Well, people tend to have less money for ancillary or luxury expenses like Mental health treatment. For better or for worse, people consider mental health treatment to be a luxury.
I looked into some data around this and indeed polling suggests that although the majority of folks believe mental health is important and find therapy to be helpful, there are many economic indicators that would say that people are quitting or not pursuing therapy because of the cost.
Now, [00:05:00] extending to testing is a little bit of an extrapolation. I couldn’t find any data on assessment services, so keep that in mind, but nearly 40% of people who used to attend therapy have stopped going because of cost. You can compare that to 33% who stopped because they said they reached their treatment goals. So that to me says finances are definitely a factor in people’s decision-making about therapy, which is a bummer. I wish it wasn’t that way, but this applies to even those who are using insurance to pay for mental health services, not just private pay practices.
So, what can we do about this?
I think there are a few things that we can do.
One is that we can ramp up our marketing using something like the StoryBrand Framework. I talked about the [00:06:00] StoryBrand Framework a few episodes ago in the context of seeing Don Miller, the author of the StoryBrand Framework, give a keynote at a conference.
The StoryBrand Framework lends itself to the idea that people spend on activities, products, and services that they feel are essential to survival. So it’s up to us to really paint the picture of mental health treatment being essential for survival and not just a luxury.
Now, some of that involves ramping up your language on your website and making it clear that people may struggle without mental health treatment. I don’t want you to exaggerate, of course, but you could certainly use language like get healthy for your kids, be your best so you can do well at [00:07:00] your job, take care of yourself so that you can take care of others- things like that that bring it home that mental health care is very important in our overall well-being. You could even say something very simple like “this is essential for your survival.” You’d have to back that up, but you can create some drama with a phrase like that.
Let’s take a break to hear from our featured partner.
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All right, let’s get back to the podcast.
So we need to drive home the idea that mental health care is essential for survival these days, just like medical care.
Another thing that you can do in your practice, if you are so equipped, is include financial work in your practice. This is interesting. It’s a catch-22 that financial concerns are one of the biggest drivers of mental health problems, but folks don’t have the money to pay for therapy to talk about financial concerns. So talking about finances and doing more financial coaching could be helpful for folks if that is within your skill set. This is one of those pivot moments where you may not be doing testing 100% of the time. You can dip back into coaching or therapy and talk about [00:09:00] financial concerns.
Other options. You can utilize solution-focused therapy so that folks aren’t stuck in long-term treatment with unclear benefits, which reminds me, you have to make it clear what people are getting out of your services, whether it’s testing or therapy. Now, that can be tough, right? We don’t want to make guarantees, but I think we have to make an effort to let people know that what they’re paying for is going to get them some kind of outcome that is in the ballpark of what they’re hoping for.
Unfortunately, now may not be the time to drop insurance. It totally depends on your market. So I would encourage you to do some serious market research and figure out if it would be beneficial to drop insurance.
Related to that, you can do a financial analysis if you do take insurance and maybe you just drop the lowest-paying panels. Hopefully, those aren’t the ones that are the [00:10:00] bulk of your clientele. If they are, you could run a few simple equations to figure out what would happen if you filled that clientele with some of the other panels, and how that would impact your bottom line, but now may not be the time to completely go off insurance.
An interesting fact that came out of this when I was doing research for this episode is that flexibility and telehealth are likely very helpful for therapy clients and people coming in. About 30% of folks have to pay for childcare or elder care to attend therapy, and gas is nearly as expensive as the actual therapy costs for many people, which is fascinating.
Now, this is talking more about those who owe a copay, for example, versus paying out of pocket. I don’t think many people are spending $150 or $200 in gas to get to a session. But the fact of the matter is that flexibility [00:11:00] and doing telehealth can be really important. So for testing, continuing to do your intakes and feedback via telehealth are great. Being able to do your interviews over telehealth, your collateral interviews, your follow-up interviews, anything that doesn’t involve direct testing.
Another option is that you can add a child therapist to your practice or do that work yourself if you are so skilled. Kids are highly stressed out. If you want to take it to another level, you can look for contracts to see if you can get into schools to see the kids there because then you are eliminating that flexibility and travel factor, which we already talked about being quite tough.
Another idea related to that is partnering with different entities to ensure referral sources. Schools are a great referral source. Medical practices are a [00:12:00] great referral source. Working on a true partnership to ensure those referral sources.
On the financial side, you can build up your savings, and dial in what gives you the most return on investment. So it’s not likely the time to buy that building- interest rates are nuts, or a bunch of experimental new measures, or a bunch of new furniture for the office. Think about spending on Google Ads, which has a good return on investment, investing in your employees if you have them, investing in your own training so that you can do the best job possible, and investing in resources that lessen the friction for clients who are looking to schedule.
So this would mean, for example, an assistant to answer any phone calls that come in so people don’t have to wait, an automated booking system, for example. These are just a few ideas to invest in the things that [00:13:00] will give you a bigger bang for your buck rather than extravagances or luxury items.
Now, for testing specifically, you might consider taking insurance if you don’t already. I know that’s such a divisive issue and if you don’t have to take insurance, don’t take insurance. But if you are really struggling with referrals, you might look at getting on one of the higher-paying panels, just do your research and make sure you’re not getting yourself into a bunch of trouble and creating more work for yourself.
Some panels are definitely worse than others in terms of their requirements for preauthorization, the number of hours that they approve, and their rates. So be deliberate. But think about it.
You might also think about adding vocational assessment. This is a time when many folks are switching jobs or looking to switch jobs and having guidance in [00:14:00] that can be helpful. So if you have vocational assessment as part of your skillset, now might be the time to dust it off, get some training, and put it out there.
Now, let’s get back to the StoryBrand idea. Selling the outcome is super important. It may not be about advertising your “comprehensive” evaluation anymore. People want answers to their most important questions. Now, of course, you have to balance clinical accuracy and ethics. And I don’t know that the comprehensive evaluation is what people are looking for. People want to get an evaluation that answers their referral questions, not the kitchen sink approach. So it may be worth rethinking the way that you are advertising and structuring your evaluations.
All of this said, getting through a recession is doable. I don’t even know if it’s [00:15:00] going to happen, but it’s worth it to be prepared. There are also areas in the country that are going to be less impacted.
Here’s the thing. I tend to adopt a wait-and-see approach with many things, much to my wife’s chagrin and my leadership team, but this is not one of those things that you want to wait too long with. As I said, I’m seeing decreased referrals around the country. We don’t know how long it’s going to last, but numbers are pointing toward at least a few months.
So, take some of these recommendations, pick a few, and try to implement some of these ideas that will help your practice, not only in the short term but in the long term as well. So don’t be scared. You are going to be okay most likely. Running a business can be hard, but there’s a lot of support out there [00:16:00] to get you through it. So don’t panic. Think through these options and consider some that could be most helpful for you.
All right, y’all. Thank you so much for tuning into this episode. Always grateful to have you here. I hope that you take away some information that you can implement in your practice and your life. Any resources that we mentioned during the episode will be listed in the show notes so make sure to check those out.
If you like what you hear on the podcast, I would be so grateful if you left a review on iTunes or Spotify or wherever you listen to your podcasts.
If you’re a practice owner or aspiring practice owner, I’d invite you to check out The Testing Psychologist mastermind groups. I have mastermind groups at every stage of practice development, beginner, intermediate, and advanced. We have homework. We have accountability. We have support. We have resources. These groups are amazing. We do a lot of work [00:17:00] and a lot of connecting. If that sounds interesting to you, you can check out the details at thetestingpsychologist.com/consulting. You can sign up for a pre-group phone call and we will chat and figure out if a group could be a good fit for you. Thanks so much
The information contained in this podcast and on The Testing Psychologist website is intended for informational and educational purposes only. Nothing in this podcast or on the website is intended to be a substitute for professional, psychological, psychiatric, or medical advice diagnosis, or treatment.
Please note that no doctor-patient relationship is formed here, and similarly, [00:18:00] no supervisory or consultative relationship is formed between the host or guests of this podcast and listeners of this podcast. If you need the qualified advice of any mental health practitioner or medical provider, please seek one in your area. Similarly, if you need supervision on clinical matters, please find a supervisor with expertise that fits your needs.