The delivery of primary mental health services through private psychology practices has a long history in Australia. Psychologists in private practice have always been a substantial portion of the APS membership, though this sector has markedly grown since the commencement of Medicare rebates for psychological services for people with mental illness and chronic illness. For many years, private psychology practice was often characterised by a ‘cottage industry’ business model: solo practitioners who were sometimes even operating from their own homes with minimal business infrastructure. Increasingly psychologists are investing in building their business so it can compete and be sustainable in a complex marketplace, providing high-quality psychological services to clients, as well as best practice business management.
This special InPsych cover feature focuses on the contemporary private psychology practice that delivers primary mental health care services to consumers. The cover feature outlines some of the external pressures that may impact on these practices over the next few years; describes the advantages and disadvantages of a range of business models frequently adopted in private psychology practice; provides practical steps that business owners can take to assist them to be more competitive; and concludes with three case examples of private practice business models.
3922 private practitioner members prior to MBS (May 2006)
7411 private practitioner members after MBS (May 2016)
Challenges in the external environment
PHNs and commissioning
Over the past 20 years there have been a plethora of reforms in the primary mental health sector with the intent of providing the community with better access to evidence-based psychological treatment. These reforms have significantly impacted on the profession and continue to do so as a result of the Federal Government’s response to the Review of National Mental Health Programmes and Services that sees the 31 Primary Health Networks (PHNs) move into a new way of delivering services. Specifically, this has meant a move away from national program-based funding for services delivered by PHNs (e.g., Access to Allied Psychological Services [ATAPS]; Mental Health Services in Rural and Remote Areas [MHSRRA]) to regional approaches whereby PHNs have the flexibility to prioritise and tailor services to meet their identified local needs. PHNs are then able to commission (but not deliver) services to meet these needs. These changes are slowly being implemented and may impact on practices that previously provided services through this sector or are seeking to do so.
Such practices will be eager to know what type of service providers will be attractive to their local PHN. It is difficult to provide a standard answer to this question because each of the 31 PHNs will tailor their approach to the local context and will be at various stages of readiness to implement their local mental health plans. While some PHNs may continue to contract a number of private practices in much the same way as they always have, others may seek out a smaller number of providers to reduce the burden associated with managing multiple tenders and because of the perceived benefits to consumers of engaging larger clinics or organisations. Such providers might be seen by some PHNs to be able to provide a wider range of services to clients (e.g., low intensity, psychological assessment and treatment for people with more complex conditions or for particular cohorts, various therapeutic groups, capacity for clients to seamlessly step up or down between services), and offer stronger evidence of sound clinical governance, risk management, compliance with quality business practices, data collection capacity, computerised records, secure messaging, and access to My Health Record. For psychologists interested in obtaining work through PHNs, it will be very helpful to have access to skills in responding to tenders. For those new to writing tenders, there is a brief introduction to this skill included in this edition of InPsych.
Standards and the possibility of accreditation
There is no doubt that PHNs and other funding agencies will be increasingly focused on a practice being able to demonstrate safe business and clinical practices and strong clinical governance mechanisms. To that end, in 2006 with financial support from the Australian Government, the APS developed the Professional Practice Management Standards (PPMS) to enable practices to self-assess and implement an on-going quality improvement program. The PPMS is currently under review to include a module that reflects best practice in the delivery of primary mental health services.
This year, the Australian Commission on Safety and Quality in Health Care (ACS&QHC) commenced the development of a set of standards for the primary care sector that may in the future become a critical benchmark for all primary care practices, not just the psychology profession. The APS was recently invited to sit on the ACS&QHC Primary Care Safety and Quality Framework Committee for the development of these standards; it is critical the profession engages in this process to ensure the suitability and acceptability of the standards for psychology. The paper by Dr Rebecca Mathews in this cover feature further illuminates the issue of practice accreditation.
What are the take home messages for private practice?
While many psychology practices are thriving, it is important that practice owners consider whether their business is well placed to navigate the changing primary mental health landscape. Have you got a business model that is sufficiently flexible to enable you to be well placed to tender for PHN contracts? The article by John Brown in this special feature describes a range of business models and highlights their advantages and disadvantages. Have you self-assessed your practice against the standards set out in the PPMS and implemented a plan to improve your practice policies and procedures, particularly in relation to risk and clinical governance? Would you be able to convince a funder via your documentation that your practice was providing high-quality, safe clinical services and business practices?
Many psychologists report that running their business is the least enjoyable aspect of private practice. This is perhaps not surprising given psychology training, unlike training for other health professions such as pharmacy, provides graduates with limited business skills. As the profession is challenged to move towards more sophisticated business practices in much the same way as the general practice sector, psychology practice owners that fail to develop high-quality businesses may be left behind. This InPsych cover feature includes stories from some private practice owners who have developed innovative businesses that are likely to enable them to flourish and be sustainable well into the future. Key features of many of these practices are the willingness of owners to devote quality time to their business (not just the clinical activities) and the importance of diversifying. Any successful business will ensure they have multiple income streams so that if something does happen to go astray in one stream, there is still revenue coming in from other sources. This lesson is also true for psychology practices – seek to develop a broad referral base from governments and a range of other agencies, as well as from fee-paying clients. If taking on additional business-related activities is not an option, consideration might be given to employing or partnering with someone who has the business capabilities to run the business. This model has been attractive to many GPs as it frees them up to do the clinical work they enjoy.
The author can be contacted at L.Roufeil@psychology.org.au