Is This the End of the Private Practice Therapist?

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by Ryan Schwartz (Founder of Mental Health Match), Jessica Eiseman, LPC-S (Founder of  Ajana Therapy & Clinical Services), Nicole Liloia (Business Strategist at Nicole Liloia International), and Michael Fulwiler (Founder of Fulwiler Media and former Chief Marketing Officer of the Gottman Institute)

New tech companies with a lot of money are shaking up the therapy industry in a way that is threatening the independence of psychotherapists and their ability to offer high-quality, effective mental health care. 

Since the pandemic began, more people have started paying attention to their emotional and psychological wellbeing. So, too, have venture capitalists. In 2020, investors spent $2.4 billion to buy and build mental health companies. Much of that money is fueling a shift in how therapists provide therapy and get paid. 

These companies profit by amassing huge networks of contracted therapists and providing access to those contractors. It’s the same “gig economy” model that gave rise to Uber, but applied to therapists and their clients. In startup speak, these companies are “disrupting” the traditional private practice model of providing care in the same way Uber “disrupted” the private taxi industry.  

The problem is that therapeutic healing is not a transaction or commodity; it’s a relationship that must be nurtured. The effectiveness of therapy depends on the strength of that relationship

Private practices are built to support clients

Private practices nurture relationships by creating a container for therapy that helps the client and therapist build rapport. The parties start building a relationship through intake and consultation and there is a sense of familiarity by the time they start therapy together that helps make therapy more effective. Through the process, therapists can set reasonable expectations about therapy for their clients and help them prepare for the therapeutic process. 

Private practice therapists also have the ability to provide the type of therapy that is best for a given client. They have the flexibility to adapt to their clients’ needs. Small practices form a community to support each other, mentor each other, hold each other accountable, and help each other take care of themselves. The wellbeing of the therapist is important in therapy; as the saying goes, “you can’t pour from an empty cup.”

Therapists, and their clients, lose all of that when they become contractors for large companies whose sole goal is to crank out therapy sessions as fast as possible. Within these companies, the therapeutic relationship itself becomes subject to the pressures of any commodity: standardization, fast transactions, increased volume, and decreased costs. These companies are under intense pressure from investors to compete, grow, and profit—pressures that seep into the intimate relationship between therapists and their clients.

Large therapy platforms often prioritize profits at the expense of clients and therapists

On-demand therapy is the most concerning trend in digital mental health care. Companies like BetterHelp and Talkspace have pay structures that incentivize therapists to prioritize company goals over quality therapy that helps clients improve. 

BetterHelp, for example, only pays therapists for messages that are limited to less than twice the word count of the message written by their client. As one exasperated therapist wrote, if a client says, “‘I feel like giving up,’ I have 10 words with which to respond to that or I will be out of compliance and I will not be paid for my work.” 

Talkspace, on the other hand, pays therapists by the word to crank out text messages—incentivizing quantity over quality and depth. Therapists who don’t respond to an incoming message quickly enough have their pay docked. What matters most in these companies is quick client gratification instead of growth, recurring revenue instead of improved outcomes. 

This is a dangerous shift for a profession that has been defined by a commitment to ethics, honesty, and the wellbeing of clients. In fact, many practices of these companies put therapists and their licenses at risk. 

At the beginning of the pandemic, Talkspace asked therapists to provide therapy in states they weren’t licensed to practice in, offering to cover their legal fees if they had to defend their license to their state board. Another online therapy provider, AbleTo, told clients “Progress Guaranteed,” a statement that violates ethics rules for any individual therapist, and an expectation that therapists might not even know their clients have—even though the legal and ethical liability for meeting those expectations falls on the provider.  (Since this article was initially published, AbleTo removed this guarantee from their wesbite.)

As the Telebehavioral Health Institute writes, “Many of their platforms lack the ability for clinicians to meet their own professional legal and ethical obligations. Upon close examination, it is clear that their legal offices have written employment or service agreements that squarely place all responsibility for the interaction on the shoulders of the practitioner.”

Ethics and professional obligations aren’t so important when therapists are seen as expendable and therapy seen as transactional. 

These platforms devalue therapy as a field and therapists as professionals

Having licensed, trained, and well-qualified providers is not a high priority for these companies. Even though customers of these services are paying hundreds of dollars a month whether they engage in therapy or not, therapists report making as little as $25 per session.

In an effort to scale as quickly as possible, some companies steer unknowing clients to coaches instead of licensed psychotherapists. AbleTo tells clients they will be receiving therapy, except that their treatment team consists of unlicensed coaches who do much of the interacting with clients. Ginger, a mental health platform sold to employers, promises they can work with “any challenge”, “anytime”, “anywhere”, even though their on-demand platform is staffed by unlicensed coaches who can earn a coaching certification in just a few days of online training. Coaches can be helpful resources, but they are currently marketed in ways that don’t acknowledge their limitations. 

Clients don’t often know the difference between coaching and therapy, in particular what private practice therapists can offer. On the contrary, they believe what they experience in a mixed therapy/coaching model or late-night text exchange with an exhausted, underpaid therapist is therapy. This adds to a growing trend of popular phone apps that disguise psychoeducation and wellness as mental health therapy.

This devaluing of therapy is furthered by online therapy platforms with huge marketing budgets that excel at finding first-time therapy seekers who have not experienced therapy before. Many of these new therapy-goers spend only a few weeks on these platforms. TalkSpace’s own evaluation found that 44% of clients didn’t complete a full 12-week course of treatment, the minimum that research suggests is needed to see real, lasting improvements in anxiety, depression, and other mood disorders. 

In those few weeks, many clients superficially engage with a therapist who may not be a good fit for them, and then quit. There is no structure or relationship building to help them understand how therapy works or what they should expect from it. 

These clients end up with a negative perception of therapy and a very restricted view of what therapy is and how it can help them. Thus, many clients’ experiences with these platforms are their first, and last, with therapy. 

It may take years for therapists to see the effects of this shift in public perception of therapy, but the financial pressures created by these companies will be more immediate.

As tech companies control more of the therapy market, they will make it increasingly hard for private practices to survive

Other companies that don’t provide on-demand therapy still amass pools of contract therapist labor, profit by controlling access to clients, and experience the same pressures that affect clients and therapists in services like BetterHelp and Talkspace. 

Headway (currently valued at $750 million), for example, uses its size to negotiate a higher reimbursement rate from insurers than any individual therapist could get on their own. They contract the therapist, bill the insurance, pay the therapist less than the reimbursement, and pocket the rest. In turn, they use those profits to make it increasingly difficult for private practices to survive. 

These companies profit only when they attract a client to their platform and control the client’s ability to access their therapist. Private practice therapists have already seen what happens when large companies buy millions of dollars of ads a month. Therapists’ own names are buried in search engines underneath links to these companies. Now it is no longer just Betterhelp and Talkspace. Dozens of companies are now doing the same thing and they are fueled by an influx of investment capital. 

Companies with billions of dollars are now competing for the same client as a small private practice, and they are doing so with tools and resources unavailable to individual therapists. This might not be apparent during a pandemic when the demand for therapy has increased so quickly. When demand balances out again, therapists will discover this is not the same competition they are used to. This is a fundamental re-orientation in how therapy is delivered to clients and what clients believe therapy to be, not just an increase in additional providers.

Historically, many successful private practice therapists start their careers as part of an insurance network or by joining a small group practice. Now those insurance clients are increasingly managed by tech companies and those small group practices are increasingly facing financial pressures that make it difficult to hire new therapists in need of supervision. 

More and more new therapists will join the gig economy of therapy instead of private practice. Afterall, who would start an independent taxi company today? As this trend increases, companies will be able to keep growing their supply of therapists, their profits, and thus their ability to attract more clients and push private practices out of the market. The cycle is just getting started. 

Therapists and clients need solutions that support private practices, not tech companies

These companies do solve real problems for some therapists and clients, but there are other solutions to these problems that support private practices and the depth, quality, and connection they offer to clients. 

There’s no doubt people need greater access to therapists, especially in rural areas. License reciprocity would open up an entire nation of therapists who can currently only see clients in the state of their license. There is no reason why a therapist who provides online therapy to a client 150 miles away in the same state can’t provide effective therapy to a client 50 miles away just over the state line. Providing national license reciprocity will allow clients to have more choices of therapists, while also allowing therapists to be able to expand their business to access a greater pool of clients. 

People need to be able to easily find and connect with a therapist who meets their needs. There are a growing number of companies that offer clients simple, free matching to private practice therapists and make marketing easy and affordable for small therapy business owners. 

People need affordable therapy or therapy covered by their insurance. For years insurance companies have undervalued mental health care and made it difficult, if not impossible, for therapists to become in-network providers. Insurers in many parts of the country have closed their networks and do not even allow new therapists to join. Even if they did accept applications, it can take years for insurance companies to process all the paperwork and approve new therapists. Insurers should simplify the billing and credentialing process for private practices and pay mental health providers comparable rates to other types of medical providers. 

Private practice therapists can take action to protect their profession

These changes are possible, especially if private practice therapists work together as a profession by pooling resources, building community, and sharing expertise. Here are seven actions therapists can take to to protect their business and ensure a high standard of care for clients:

  • Build your professional community. Create genuine relationships with other professionals and business owners who share the same audience as you. Don’t just transactionally reach out to people you think might have clients for you and ask for referrals. Actually nurture long-term relationships with them and see how you can help each other better support your clients and your businesses as well. Most professionals would rather send clients to a therapist they know than to an online platform. 
  • Invest in marketing and marketing services that connect people to private practice therapists. Individual practitioners alone can’t compete with the marketing budget of large tech companies. However, they can pool together and collectively fund creative marketing campaigns that reach new clients. Some of these services are using the viral networks of social media to reach a wider network of clients than any individual clinician can, and then making sure clients connect with private practice therapists who best meet their needs. 
  • Be a specialist instead of a generalist. This will allow you to support your clients at a higher level rather than trying to serve everyone, which can lead to burnout. You’ll also be more competitive to clients who seek specific expertise. Many clients who know their specific needs will turn to local expertise before they commit to an online therapy platform. These platforms try to speak to everyone at the same time. The best way to break through is to develop a focused audience and speak in depth to their needs.
  • Create content that builds trust. Build an audience of your ideal clients by creating content for them that shows your expertise and helps them learn more about their struggles and how they can overcome them. This will increase your “know, like, trust” factor so that they are more likely to work with you when they are ready, even if it is not immediately. This can be done through your website, social media, and a mailing list.
  • “Grow” your graduate students. New therapists need a home to learn how to run their own practice. Consider reaching out to local universities and offering your practice as a practicum or internship site. When the students graduate, they will know the benefits of private practice and have the skills to either stay in your practice or open their own.
  • Join a small group practice. Small practices allows therapists to uphold the standard of what therapy is while belonging to a group of supportive and collaborative therapists. A lot of group practices offer health benefits and high rates of pay. This Facebook group can help you connect with therapists of all levels who are looking to join a private practice.
  • Be an advocate for new laws and insurance rules. Legislators need to hear your voice to pass license reciprocity and expanded access to mental health services. Contact your local and national professional organizations to learn how you can add your voice to the calls for change. 

The “gig economy” is not a good fit for therapy, despite how much venture capitalists try to force the model on the profession. There are better solutions to the challenges that exist for therapists and clients, but those solutions need your action and support if they are to give private practice therapists a chance to survive in the new landscape of mental health care. 

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