How Business Pressures Shape the Social Evolution of Modern Private Practice--A Case Study

Psychiatric TimesPsychiatric Times Vol 14 No 10
Volume 14
Issue 10

All of the forces affecting and influencing my professional life thunder through my day like these footsteps on the bridge. So many times we hear that private practitioners are "dinosaurs" in today's managed health care environment. At times, I admit, I do feel like a hanger-on in some evolutionary cul-de-sac. Yet, as referrals keep coming in, I find myself feeling more and more fit to survive the Darwinian challenges facing psychiatry. Sharing daily life with colleagues I trust and respect better enables me to live with or ignore the "footsteps on the bridge," which in my more optimistic moments I imagine to be the sound of the real "dinosaurs" rumbling off into the mist.

My Burlington, Vt., private practice used to be a low-budget, low-profile operation. A couple of chairs, a desk, a file cabinet and a couch created a fully equipped office. Most billing transactions were simple: Exchange a bill for a check. No "networks" linked me with unknown clinicians. No network bureaucrats from St. Louis or Minneapolis or even Burlington invaded my patients' privacy. How and why my practice has changed are emblematic of the forces, changes and opportunities influencing today's private psychiatrists.

Since finishing my psychiatric residency at the University of Vermont, I have had a private practice in general adult psychiatry on the outskirts of Burlington. For the first seven years I shared a building ("The Old Stone House") with two other psychiatrists, who were good friends from the residency program. Later, a psychologist and another psychiatrist moved in, unhappy refugees from the university. Our relationship was more a neighborly affiliation than a partnership, as we set our fees independently of each other, billed separately, and had individual phone numbers. For the first five years of my private practice, I held once-a-week consulting positions with the state disability service and with a county mental health center in New York State. I also taught residents and helped out administratively in the university's department of psychiatry.

By the early 1990s, the Stone House group had begun to drift apart. One of the original three members became the staff psychiatrist for Burlington's first health maintenance organization. The other original member developed a growing child psychiatry consultation practice in New York State. The psychologist also had a thriving consultation practice, as well as an expanding academic role in a nearby college. The ultimate dissolution of our increasingly fragmented group happened for aesthetic reasons, however, in the eighth year of our association when our two child psychiatrists moved into the top floor of a Burlington building with panoramic views of Lake Champlain.

During this period of group transition, managed care had begun to make its first noticeable inroads into northern Vermont. The local HMO was becoming more prominent, and the area's largest employers (IBM, General Electric, the University of Vermont) all signed managed care agreements. As a consequence of my decision to join selected managed care organizations, the paperwork demands on my time escalated; treatment reports and other managed care-generated correspondence began to pile on top of my traditional paperwork load of office notes, provider correspondence, billing, and so on.

My two remaining colleagues at Stone House kept minimal and irregular schedules. The moving away of my practice neighbors gave "solo" private practice a new, and lonely, meaning to me. I began to think about how I might restructure my practice. Unlike my Stone House colleagues, I poured more of my time and commitment into my office practice and felt quite gratified "just seeing patients." I missed collegial contact, though, and I needed office help.

Around this time, a large psychology-based group practice in the area was going through its own evolutionary upheavals. A child and family psychologist who has been a good friend and softball teammate of mine for nearly 15 years wanted to leave the group he had been part of for several years. After a series of informal conversations, we decided in an after-softball, late-night meeting in a local Ben & Jerry's to form our own group. The initial group consisted of my psychologist friend, two other members of his group: His wife (a drug and alcohol counselor and certified mental health counselor), and their friend (a pastoral counselor who also was a mental health counselor), a woman who quit her job as billing manager of their former group to become our office manager (and my personal insurance savior) and myself.


In late 1994 we began a series of regular breakfast meetings, started looking for office space and added another psychologist. In March 1995 we moved into office space built to our specifications. We decided upon a name for our group: Cedar Brook Associates, because there were cedar trees by our front entrance, and somewhere nearby flowed a brook whose name (Allen Brook) was already associated with a nearby office building and a local group home. By consensus we designed our logo, selected our carpeting and picked out our offices.

The five of us held several important ideas in common. We believed that in the evolving managed care environment, being in a mixed specialty, one-site-fits-all (or most) group mental health practice would be competitively wise. We looked forward to sharing cases with trusted colleagues. As a psychiatrist, I could bolster the practices of my nonpsychiatric colleagues by allowing them to take referrals they otherwise might turn down (i.e., if medications were needed). As a corollary, of course, my own practice would be more secure, as I would be assured a steady stream of consultations and medication reviews.

We also wanted our new group to be socially egalitarian and free of artificial role distinctions. (For example, I would not assume any financial or administrative role, like "medical director.") In the 1990s, this cross-discipline egalitarian ethic has gained strength in Vermont, as evidenced by the growing popularity of yearly multidisciplinary conferences and by the successful passage of a mental health parity bill by this year's legislature, after an intense and costly coordinated lobbying effort by all mental-health guilds and citizen groups in the state.

The Principles

In meetings before and after Cedar Brook officially opened, the five of us worked on a set of principles to serve as a more formal ethical and operative foundation to our collaborative practice. Among these principles, which have served as an informal partnership agreement, are these:

  • The associates of Cedar Brook agree to adhere to the ethical and clinical standards of their individual professional organizations.

  • If Cedar Brook, as a collection of its partners, decides to enter into contracts as a single entity ("Cedar Brook"), then this decision must be unanimous, and all revenues will be dispersed back to the partners (that is, Cedar Brook itself would keep no money.)
  • Associates who wish to leave Cedar Brook shall not be restrained from doing so. Cedar Brook will not put any conditions--competitive or otherwise--on associates who wish to leaveAssociateswill place no restrictions on any clinician in regards to taking clients and patients with them upon leaving Cedar Brook Associates.As I write this article, Cedar Brook has been in operation for nearly 27 months. (Incidentally, there are now seven of us; a child and family psychologist joined us from another mental health group undergoing change, and a clinical nurse specialist wanted a part-time practice closer to Burlington to complement her work in a neighboring county.) We have not marketed ourselves aggressively in the area--our advertising has more or less been limited to a small ad in the telephone directory. However, we have begun to develop a group identity in the community, as the people who have known us and referred to us individually have begun to become acquainted with the other members of the group.

How has my practice changed as a result of being a member of a merged multidisciplinary group? The biggest clinical change is that the various roles I have played as psychiatrist within the clinical mental health community of Burlington are now more consolidated among people with whom I have a close, daily working relationship. Nearly 20 years ago, the American Psychiatric Association delineated three types of clinical relationships that psychiatrists typically enter into with other, nonmedical, practitioners. In consultative relationships, the psychiatrist offers clinical advice and opinion without assuming direct care of the patient. In collaborative relationships, the psychiatrist assumes the medical role in a patient's care--i.e., making or verifying initial diagnosis, prescribing and monitoring appropriate medication and keeping an eye on general medical status--while psychotherapy treatment is provided by someone else independently. In supervisory relationships, the psychiatrist directly assesses and helps guide the work and goals of the therapist.

Before Cedar Brook, I had consultative and collaborative relationships with about a dozen therapists in the area, none of whom worked in my building and some of whom I barely knew before their initial call for help. Now, most of my case-sharing is with my Cedar Brook partners. This arrangement creates ample opportunity to keep each other updated and informed, and it also has allowed me to develop a truer, more complete sense of how the clinicians with whom I share cases function and think. I feel the liability risk to me in case sharing is lessened. As a final and vital benefit, of course, this closer collaboration is a better arrangement for the patients as well, as they feel more reassured about the working relationships between the clinicians in their care.

As the psychiatrist in a mixed group practice, I agreed to assume supervisory responsibility for Medicaid and Medicare billing for three of my colleagues, and with each of them I have a different supervision arrangement. I decided not to accept money for my supervision time, nor for signing off on their bills, because I felt that could have undermined the nonhierarchical environment that Cedar Brook was attempting to foster. I chose to believe that overall we would end up being mutually supervisory. Besides, the occasional appointments I had with my colleagues' Medicaid and Medicare patients filled in gaps in my weekly schedule that might otherwise have gone unfilled, creating an indirect financial benefit.

  • External Pressures

Many external forces, I found, serve to spotlight the real and perceived status difference between psychiatrists and other mental health clinicians. Malpractice insurance has been a prime example. As part of my individual policy, I could attach all the other members of the group at very little added expense. For my partners, however, an affiliation with a psychiatrist caused considerable review and revision of their policies. We also learned that in Vermont psychiatrists and psychologists cannot form a professional corporation together because we are not considered to be practitioners in the same field.

Managed care policies have provided other, potentially divisive pressures within our group. Increasingly, for example, my colleagues are being told that continuation of approval for their ongoing cases would require my psychiatric evaluation and approval. Thus, I have become a de facto managed care reviewer within our group. Furthermore, I am routinely granted more liberal managed care reauthorizations for my patients than my Cedar Brook colleagues are for their clients, even though we each have many difficult cases. The potential conflicts within the group from such arrangements could be mitigated if, for instance, I refused to serve as an in-house reviewer, but then we would lose the benefits of case collaboration and, in the end, the patients may suffer. We talk about these pressures often in our staff meetings, which helps remind us that we are all restricted by the managed care philosophy.

Even without these external pressures, it would be a challenge for our group to remain socially and administratively egalitarian, given the real differences in our training, our philosophies and our presumptions about psychiatry.

Take the "issue" of medications. Although none of my partners are prejudiced against or unaccepting of the need for medication in their patients who need drug treatment, joking comments like "Can you get me some Valium?" or "What's the drug rep giving away today?" seem to belie an ambivalent attitude toward medications.

In general, my colleagues have an understandably uneven intuitive feel for what medications can and cannot do, as I have an uncertain understanding of, say, psychological testing or the principles of therapy with a 6-year-old. Their attitude towards medications resembles my attitude toward television: I have no clear idea how it works, I have no real desire to learn how it works, but I'm glad someone has taken an interest because I like having it available.

Similarly, jokes about the financial prowess and political clout of physicians, which were more prevalent in the first few months of Cedar Brook, seemed to convey a message about how physicians are viewed by colleagues in related fields. (An ironic twist to this theme is that Vermont's governor is a physician.)

As we have come to know each other as partners, however, empathy has been replacing misperception. For example, although my reimbursement from insurance for an hour's therapy is usually more than that for my partners, the relatively small discrepancies have helped, I think, to debunk some of the myth of the comparative virility of a psychiatrist's earning power. Similarly, although managed care is at times more charitable to me in reauthorizing care for my patients, my colleagues see and hear how my many insurance frustrations echo their own. And although I sometimes have an easier time seeking or gaining access to new managed care or other provider networks, we have all come to learn that acceptance into a network is as likely to be a dubious or useless honor as it is a benefit to our practices or our patients.

A long wooden footbridge, 12 feet off the ground, connects our parking lot with our front door. To run along the footbridge is an irresistible temptation to the children who come to Cedar Brook for treatment. Every afternoon I know schools have let out when I hear the pulsating sound of their sneakers on the bridge.

All of the forces affecting and influencing my professional life thunder through my day like these footsteps on the bridge. So many times we hear that private practitioners are "dinosaurs" in today's managed health care environment. At times, I admit, I do feel like a hanger-on in some evolutionary cul-de-sac. Yet, as referrals keep coming in, I find myself feeling more and more fit to survive the Darwinian challenges facing psychiatry. Sharing daily life with colleagues I trust and respect better enables me to live with or ignore the "footsteps on the bridge," which in my more optimistic moments I imagine to be the sound of the real "dinosaurs" rumbling off into the mist.

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