[JOE SANOK]
This is the Practice of the Practice podcast with Joe Sanok, session number 694.

I’m Joe Sanok, your host and welcome to the Practice of the Practice podcast. I hope you are doing awesome. Every single week, we are doing the Ask Joe show where you get to throw your questions in, and I answer them. You can head on over to practiceofthepractice.com/askjoe, we have a form there that you can just fill out and ask your question. Also, I have Facebook, Instagram, those sorts of things. So some people have just sent me questions there as well. It’s a little bit easier if it goes through our system, but no problem at all.

We actually have two questions from Brenda Franks and the first one she says, “I’d like to grow my practice to some preferably only cash paying clients. Any ideas on what podcast number I could listen to? So Brenda Franks is asking, what podcast should she listen to. I sent her a message back saying we had some from a while ago, but I might as well just jump in and do the Ask Joe show for that question. So a couple factors in regards to growing a private pay practice that is less insurance based. People are going to use their insurance if they have that as an option, so first and foremost, you need to evaluate the insurances you take. Are they ones that are paying well? Are they easy to work with? Do you have enough clients to warrant doing that, or is it worth being an out-of-network provider, providing a super bill, going through all of that process? And making sure that in your own state and federally that you’re following those rules as well.

So you probably might want to weed out a couple of the insurance plans that have lower numbers of people on them, and don’t pay that well and maybe are harder to work with. So you may know which ones those are. Because the average person’s going to want to use their insurance if they have insurance or have account towards their deductible in some way, if they’re paying out of pocket. So having those basic systems set up, so whether it’s with Therapy Notes or other systems to make sure that it’s easy, even if you’re doing private pay to provide that super bill to maybe even do some of that courtesy billing. Those are all add-ons that really make people want to work with you. It makes it easier. Anytime we can remove any sort of just toughness, any sort of, I guess, pushback it makes it easier to acquire those clients.

Next in general, as a rule, the more that you have a specialty or a niche, the more that you’re able to charge for private pay. People will pay to see someone that they think is going to help them instead of just a generalist. So figuring out what type of person you want to attract to your practice, in addition to that, making sure that you really think through what are the certifications they care about. So just because you care about being Gottman level three and EMDR certified, all these things, does your average ideal client care about that stuff? Or are there things that maybe they care a little bit more about? Is there local media attention? Is there some connection to the community? Do they see you through their friends or do they throughout your branding see themselves and you as someone that they would want to work with? So it’s important to really focus in on what does that client care about more than you.
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[JOE SANOK]
So then we want to look at what’s the most that you’re charging with your insurance because most contracts. And again, you want to consult with your own attorney on these things and just to make sure that you’re following your own local regulations, but these are big picture things. So you’re going to want to look and see with your contracts, typically you can’t charge private pay less than what your highest paying insurances. So if Blue Cross Blue Shield pays you $149, you should probably set your rates at at least $150. Now I recommend going at least $15 to $20 above your highest paying one, because over time, if you’re adding private pay to your practice, that’s probably something you want to do more of. So if you’re only getting the same amount as the insurance, you’re really not making that much more.

So thinking through that as well then figuring out what your rate is going to be. We have a number of different ways that we help people do this but just starting with what lifestyle do you want to live? So let me pull out my trusty calculator here. Imagine that you really want to take home a hundred thousand dollars a year. When you do the math that you want about $50,000 of that a year to come from private pay. You want it to be 50 50, you have 50% going towards insurance, 50% towards private pay. So $50,000 a year, you want to take home. Usually we want to multiply that times, at least 0.5. That gives you enough extra money for taxes, for extra expenses. So if we multiply that times 1.5, that means we need to bring in $75,000 per year in private pay.

Now, then we want to think through, well, how many sessions a week do we want to work and then how many weeks a year do we want to work? So if we know I’m going to take off at least four weeks a year. Okay, so I’m going to divide that by 48 weeks. That means that in private pay clients, I need to bring in $1,562.50 cents per week. Now let’s think about how many clients we need to schedule in order to have that come in. So if we say, all right I’m already seeing 10 clients a week with my insurance. I want to see 10 clients a week with this. Maybe one person a week might no show. So maybe I should schedule 11. So let’s divide that by 11 sessions. That means at minimum you have to be charging $142.5 cents, $142.5 cents.

So then that lifestyle has dictated what your price is going to be. So that’s a really solid way to just know, okay, if I only want to work five sessions a week and I want to make six figures, well, let’s look at that number. It’s going to be way higher than maybe what your market can handle. Maybe your market can handle that. I’m not saying that you have to be at $142. There’s markets that I’ve worked in with clinicians that they were charging $300 per session for a 45-minute session and I pushed them to push that higher and they were at $450, a session, $650 a session. So that oftentimes, we sell ourselves short in regards to what maybe the market can handle in that area.

As well, we want to just think through what extra costs do we have? Do we want to be the ones that are always working? Maybe we’re moving towards having a group practice or we’re having an executive assistant or a biller. Those are expenses that we want to take off to say if I do one extra hour of work a week that could actually pay for somebody to work several hours as a virtual assistant or as a biller or other things to save me time in the areas that I don’t really enjoy working on things.

So that’s some of the infrastructure thing for a private pay practice. Then really the biggest thing is your image and your branding to think through who is it that you’re trying to attract. So sketching out that business avatar, that ideal client. I actually did this with someone that’s running for a county commission seat yesterday to have her think through who’s her ideal voter. If they’re in the middle, like what’s their pain and let’s give that person a name and let’s help them think through what are they worrying about? Where are they hanging out? Then we looked at the spread of most of those candidates in that seat and we’re looking at 500 voters that are going to be needed to be convinced, not thousands.

So to just say, we need to have 500 of this ideal person know that I exist connect with me and want to actually get out and vote. Same sort of thing where if you’re ideal client, if you have an idea of who they are that really, really, really helps you in a number of ways to just focus in on them, to have your blog post focus on them, to have your social media focus in on them, to be able to talk to them on the platform that they’re on. If you are maybe working with baby boomers and your main focus is on TikTok, you’re probably not going to attract them or vice versa. So being able to really understand how do those people think, where do they operate, what do they work through in order to make that decision to go to therapy with you?

Then making sure your website looks really good, that it looks solid, that it’s very, very clear who you help. So that’s just getting people in the door. Now when they get in the door, how do you have those conversations or have your assistant have those conversations about private pay? You want to talk to the quality, the outcomes, what the typical timeline is. So if it’s six sessions to work through the issue that you’re talking about, if it’s 12 sessions and you’re not promising that, but you’re at least saying for what you’re saying to me. It sounds like that would typically be that we would meet for three or four months, we’d meet every week or every other week. It’d be about this many sessions. It’d be about this much is what it would cost and making sure that they understand everything as they’re going into it.

Then from there being able to get them booked, get them in. If they have questions about if you take their insurance, how does that work? To talk about why for you it’s important to not take insurance or to be moving away from insurance. Talking about the reasons that for you insurance isn’t the primary way that you’re seeking to grow your business. Knowing yourself, knowing why you’re making this decision is one of the best ways for you to really fully understand for yourself, but then also to be able to communicate that to a client. Then as you have more private pay people, it’s easier and easier over time to attract other private pay people that are paying for an outcome, they’re paying for the thing that they want to achieve, not just coming to therapy over and over using their insurance.

So I mentioned within today’s Ask Joe that oftentimes you want to stay organized and Therapy Notes is the best electronic health records out there. They help thousands and thousands of clinicians to stay organized with their billing, with their super bills, all of that. It just is so much easier if you use something like Therapy Notes. So if you go to therapynotes.com and use promo code [JOE] at checkout, you’re going to get several months for free. We just love Therapy Notes. They just support our clients. We have a direct relationship with them. Even during the pandemic. We were like, you need to have teletherapy as part of your billing, just like have it in there and they switched. It’s great to have that influence and connection with them.

Thank you so much for letting me into your ears and in your brain. We are doing four episodes a week now. So excited to be doing all these episodes. Thank you so much. I’ll talk to you soon.

Special thanks to the band Silence is Sexy for your intro music. We really like it. And this podcast is designed to provide accurate and authoritative information in regard to the subject matter covered. This is given with the understanding that neither the host, the publisher, or the guests are rendering legal, accounting, clinical, or other professional information. If you want a professional, you should find one.