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Clinical Practice Strategies Outside The Realm Of Managed Care

Steven Walfish

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Abstract: While more and more psychologists criticize managed care companies, more and more depend upon them to maintain their practices and earn a living. Some authors have advocated developing a fee-for-service practice that does not take managed care clients at all so that clinical care and income will not be compromised. The present study surveyed psychologists and asked them to identify activities in their own independent practice that fall outside of the purview of managed care. A total of 180 specific activities were identified that were rationally grouped into ten separate categories. These include: (a) Business Psychology; (b) Consultation To Organizations; (c) Fee-for-Service; (d) Forensic Psychology; (e) Group Therapy; (f) Health Psychology; (g) Psychoeducational Services; (h) Services to Government; (i) Teaching and Supervision, and (j) Miscellaneous. Implications of these data for psychologists in their own practices are discussed.

Broskowski (1991) noted the impact that managed care has had on professional psychologists and predicted that the trend was most likely to continue. Many authors have discussed the deleterious impact of managed care on the provision of psychotherapy by psychologists (Fox, 1995; Karon, 1995) and one advocated an approach that will hold utilization reviewers accountable for questionable ethical practices (Sank, 1997). A survey by Phelps, Eisman and Kohout (1998) indicated that four out of five individuals reported that managed care was having a negative impact on their practices. A survey in one state found that higher involvement in managed care by independent practitioners resulted in greater changes in morale, professional identity, and change in approach to therapy compared to practitioners with lower involvement levels (Rothbaum, Bernstein, Haller, Phelps & Kohout, 1998).

Murphy, DeBernardo and Shoemaker (1998) noted that despite managed care's significant effects on their practices, most have not substantially changed their practice patterns. Hersch (1995) discussed strategies for psychologists related to adapting to managed care. He stressed the importance of diversification of the practice of psychology.

Ackley (1997) suggested that with a shift in mindset, psychologists in independent practice might develop a clinical practice for themselves in which their clients will not use insurance to pay for their psychotherapy. He presented a model as to how this can be accomplished, as did Kolt (1999). Kolt presented a list of 125 market niches for psychotherapists based on consumer needs. It is unclear how Kolt developed this long list, whether it was based on surveys, her clinical experience, or a composite of her review of the literature. The purpose of the present investigation is to examine what services psychologists in independent practice are actually providing in their own settings and communities that fall outside of the purview of a managed care utilization reviewer. Such information could prove helpful for psychologists who want to either reduce or be completely free of the constraints these companies place on their clinical practice and income.



The participants for this study were 179 members of the APA Division of Independent Practice (Div 42). The average age of the subjects was 52.30, and on average had held their advanced degree 20.21 years when they completed the survey. Sixty-two percent were male and 38% female. The majority had received their degrees in clinical psychology (61%), followed by counseling psychology (24%), school psychology (5%), with the remaining 10% spread across 11 other areas of psychology. Most had received the Ph.D. (91%), followed by PsyD. and Ed.D. (4% each). One subject had received a Th.D. and another an M.A. The majority of the sample was in independent practice on a full-time basis (72%), followed by part-time (15%) and half-time (13%). Location of practice was geographically distributed across type of location. Thirty percent indicated that their office was located in an urban area, as did another 30% in a suburban location. This was followed by small city (25%), rural area (8%), and some combination (7%), which was typically an individual who practiced in more than one location.


Surveys were sent to 350 randomly selected Div 42 members listed in the 1998 APA Membership Directory. This represented a 5% sample. Of these 24 were returned by members declining to participate due to having retired from the profession or were no longer practicing, two members had passed away, five were returned as having no forwarding address, and one was unusable. The remaining 179 surveys were included for study representing an overall return-rate of 51%.

In addition to a brief demographic questionnaire, participants were asked to name three specific activities in their own current clinical practice that did not fall under the purview of a managed care company. They were asked to be as specific as possible in identifying these activities. For example, they were requested not to indicate a generalization such as "Forensic psychology" but preferably the specific forensic psychology activity e.g., "Completing child custody evaluations." As another example, rather than identifying "Group therapy" they were requested to indicate the type of group therapy, e.g., "Anger management groups for individuals involved in domestic violence."

Once the surveys were returned the author reviewed and synthesized the responses into individual practice activities. The aim was to eliminate duplication and overlap and to include only practice strategies that were specific in nature.


Table 1 presents the specific practice strategies that the survey participants involve themselves in that fall outside of the purview of managed care. A total of 180 separate strategies are listed. They have been rationally grouped and alphabetically presented under ten general headings: (a) Business Psychology; (b) Consultation To Organizations; (c) Fee-for-Service; (d) Forensic Psychology; (e) Group Therapy; (f) Health Psychology; (g) Psychoeducational Services; (h) Services to Government; (i) Teaching and Supervision, and (j) Miscellaneous. It should be pointed out that there is some overlap among the general headings for specific practice activities. For example, the specific practice activity "Group therapy for individuals with chronic pain" would fall under both the general headings of both group therapy and health psychology. However, it was felt that it would be too confusing for the reader to try and present the practice activities under all the different possible combinations and permutations.


Kolt (1999) pointed out that all industries change over time and the profession of psychotherapy is not immune from these phenomena. Managed care has been one of the changes that has interposed itself into the business of psychotherapy. Some individual clinicians adapt to the requirements of managed care companies. For clinicians who want to practice outside the restrictions managed may place on them there are a number of practice opportunities available in which they are able to utilize their consultation and therapy skills. Clearly, these will not be traditional psychotherapy practices with third party insurance paying the majority of the psychologist's fee. The advice given by Plante (1996) to new graduates seeking their first positions may generalize to the situation in which psychologists in independent practice may find themselves feeling displaced. He suggested the need to expand the array of skills and their applications window of opportunities beyond the traditional roles demonstrated during graduate training (and I may add traditional clinical practice). Plante believed that new professionals often underestimate their job skills and how they can be applied in a wide variety of jobs in business and industry, schools, hospitals, the media, and other agencies. The diversity of skills can easily be reflected in the clinical practice activities identified by the present survey participants.

A total of 180 separate clinical activities were identified in this survey and were rationally grouped into ten general headings. A complete expounding on each of these areas is beyond the scope of this paper. However, a brief mention of each general topic area will follow below.

Psychology in the corporate world has become attractive as industry is in need of the skills clinicians have to offer, and they usually can afford paying for these services. Perrott (1998) describes business psychology as the "application of clinical psychology's traditional knowledge base, modified and augmented by related knowledge and skill area bases to people working in business settings for the ultimate purpose of enhancing the business's performance" (p. 31). Adkins (1999) views the occupational health psychologist as a scientist-practitioner who takes a business frame of reference, and a systems orientation, and acts as an integrating agent. Clay (1998) described the experiences of three clinical psychologists moving into the realm of organizational consulting. One recent area that has developed as part of business psychology is executive coaching (Kilburg, 2000). For clinicians wanting to branch out into the world of business, it would be prudent to heed the warning of Lowman (1998) that the practice of psychology in industry and organizations occurs in a complex and at times litigious environment. As such, a review of ethical principles as they apply in the business world should take place before applying assessment and intervention skills in the corporate world.

Consulting to organizations requires that psychologists leave the comfort of their consulting office and venture into the community. Lorion and Hightower (2001) highlighted errors that often occur for individuals attempting to initiate clinical or consulting efforts in the community. They pointed to the need for clinicians to not be interpersonally distant, to be well prepared for the tasks on hand, to be patient and willing to overcome obstacles, to be practical and not grandiose, and to be willing to earn the trust of their consultees. If these things take place, both the clinician and the individuals in the agency will find the experience to be mutually beneficial.

Both Ackley (1997) and Kolt (1999) attempted to make the case that psychologists in independent practice can earn a living without having to take referrals from managed care companies. The respondents in this survey identified twenty strategies for achieving this goal. These included seeing clients with traditional indemnity insurance, and those only paying cash, possibly at a reduced fee. Reducing a fee somewhat may be attractive to clinicians if they can avoid having the psychotherapy managed and monitored and do not have to deal with being reimbursed by an insurance carrier. Other strategies included marital therapy, family therapy, and vocational counseling, which are not typically reimbursed by an insurance carrier.

The practice of forensic psychology is clearly an area of practice activity focused upon by respondents in the survey. Thirty-seven separate clinical activities were mentioned, slightly more than one fifth (21%) of the entire list. This is an area of practice that will most likely never fall under the purview of managed care, in addition to being a well-paid area of practice, which is perhaps one reason why it has become attractive for independent practitioners. Hess (1998; 1999) elaborates on issues for psychologists to consider when accepting forensic cases, with a special focus on ethical issues.

Group therapy is a cost-effective way to deliver psychological services. Compared to individual therapy it is a way for clients to receive services in a relatively inexpensive manner. Participants can gain by being involved with other people who are struggling to solve problems similar to those they are trying to solve themselves. Many of the group activities delineated by the survey respondents are general in nature (e.g., group therapy for adolescents, men's groups), but many are very specific in nature (e.g. adult children of alcoholics, anger management).

The survey participants identified a variety of health psychology services. Hersch (1995) cites several examples of how psychologists can better incorporate themselves into the delivery of health care. Clinical and counseling psychology is becoming more integrated with medicine (Haley et. al, 1998; Pruitt, Klapow, Epping-Jordan & Dresselhaus, 1998). In an interview, Russ Newman argues that psychology must redefine itself as a full-blown health profession in order to better respond to the developing integrated marketplace (Nickelson, 1995).

School systems often provide assessment and therapy services for children who have special needs. The traditional focus is on developing Individual Educational Plans for students who have problems with learning or behavior. However, school systems are often understaffed and therefore a long waiting list may exist. Parents may prefer to have an expert outside of the school system serve as a consultant and advocate for their child and be willing to pay out-of-pocket for such services.

One way to deliver important services and to be paid for clinical services is to do work for the federal or state government. Psychologists routinely complete evaluations for individuals who apply for Social Security Disability Benefits. Similarly, psychologists are often seen as important parts of a vocational rehabilitation services team in terms of assessment and therapy. There is no lack of individuals who have become injured on the job, and a significant percentage experience emotional difficulties as a consequence of their injuries. It should be pointed out that services that the government pays for do not traditionally fall under the general heading of personal growth and insight-oriented psychotherapy. Rather, the goal is to treat specific problems in a focused time-efficient manner, in order to facilitate the likelihood that an individual may obtain and maintain a job.

Teaching courses at universities and through adult education has been viewed by a panel of experts as an important strategy for building and maintaining an independent practice (Walfish & Coovert, 1989). The present survey respondents agreed that independent practitioners could add to their overall income levels by becoming involved in these activities, as well as supervising therapists in training. Korn (2001) pointed out that most individuals who care about teaching usually learn their skills through trial and error. Individuals interested in becoming better teachers should consult the work of Korn as well as volumes by McKeachie (1999) and Perlman, McCann and McFadden (1999). Individuals wanting to become more familiar with issues related to the development of supervision skills may want to consult Hess (1980) and Watkins (1997).


Developing new market opportunities is a classic example of how academic research and clinical practice can best complement each other. Academic researchers first studied many of the practice activities identified in this survey by those in independent practice. For example, the practice activity "Personal injury evaluations following a motor vehicle accident" may find its roots in the research program developed and summarized by Blanchard and Hickling (1997). Walfish (2001) suggested that there is no lack of research reports on clinical problem areas that can be translated into clinical practice opportunities, especially in the area of behavioral medicine. As such there may be an incentive for clinicians to spend more time reading academic journals as an impetus to creating practice opportunities in their own offices or local community.

In offering advice in how to develop a successful independent practice, a panel of experts stressed the need for clinicians to perform at a superior level, establish a specific area of competence, and to not practice beyond one's level of competence (Walfish & Coovert, 1989). It is important to understand that while the present survey identified a wide variety of clinical activities independent practitioners may pursue in their practice the ethical imperative is to be skilled at the service being provided.

Murphy, DeBernardo and Shoemaker (1998) surveyed Div 42 members on the impact that managed care has had on their clinical practice. Most reported significant increases in dependence on managed care services for income. In a Letter to the Editor Haber (2001) expressed her outrage at the "co-opting" of psychologists into managed care, especially as it related to faculty tweaking their courses to include a managed care focus. She writes:" Let me suggest teaching something a bit more radical. How about teaching courses that help new psychologists develop the courage, creativity and basic survival skills that will enable them to thrive outside of managed care?" (p. 4).

The results of the present study suggest that with creativity, skill development, and an entrepreneurial spirit, psychologists in independent practice can practice, at least partially (and possibly fully), outside the purview of managed care. However, this will take a sense of being willing to be open and flexible on the part of psychologists to think in nontraditional ways.


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Broskowski, A. (1991) Current mental health environments: Why managed care is necessary. Professional Psychology: Research and Practice, 22, 6-14.

Clay, R. (1998) More clinical psychologists move into organizational consulting realm. APA Monitor, July, 28-29.

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Rothbaum, P., Bernstein, D., Haller, O., Phelps, R. & Kohout, J. (1998) New Jersey psychologist's report on managed mental health care. Professional Psychology: Research and Practice, 29, 37-42.

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Walfish, S. (2001) Developing a career in psychology. In S. Walfish and A.K. Hess (Eds.) Succeeding in graduate school: The career guide for the psychology student. Mahwah, N.J.: Lawrence Erlbaum and Associates.

Walfish, S. & Coovert, D. (1989) Beginning and maintaining an independent practice: A Delphi poll. Professional Psychology: Research and Practice, 20, 54-55.

Watkins, E. (1997) Handbook of psychotherapy supervision. New York: John Wiley & Sons.

Author Note

I would like to thank Ed Brown and Kristin Schaaf for their comments on an earli er version of this paper.

Table 1

Non-managed Care Activities of Psychologists In Independent Practice Grouped By General Content Areas

Business Psychology

Career counseling groups for individuals 30-50 years old.
Coaching for home-based business groups.
Consulting to corporate executives on behavioral science and policy issues.
Consulting to business and organizations on family hierarchical issues.
Consulting to companies, government, and non-profit institutions on
organizational change.
Consultation to Human Resource directors of various organizations regarding
accommodations necessary for the Americans With Disability Act.
Critical incident debriefing following crises at work.
Critical incident debriefings of groups who have gone through a trauma or disaster.
Disability evaluations for individuals attempting to return to work.
Executive coaching in corporations.
Fitness for duty evaluations related to dangerousness.
Fitness for duty evaluations related to insubordination.
Fitness for duty evaluations related to substance abuse.
Intervention services with impaired executives.
Mediation of disputes in small businesses.
Psychological evaluation of executives for hiring/promotion decisions.
Stress management training for companies.
Team building workshops for corporations.

Consultation To Organizations

Case consultation to teachers and counselors in schools.
Conducting a support group for staff at the Humane Society.
Consultation and psychotherapy to a displaced children's unit with hard to place children.
Consultation at nonprofit agencies on clinical issues for staff.
Consultation to parents and teachers at a Head Start program.
Consulting to schools in brain injury program.
Consultation to rehabilitation hospital in establishing neurobehavioral program.
Consultation to residential home with mentally retarded residents.
Critical incident debriefing for emergency service providers.
In-service training for a medical center on psychological issues.
Program development consultation for nursing homes and assisted living facilities.
Sensitivity training for fire departments.
Sensitivity training for police departments.
Team building consultation for a rehabilitation unit.

Fee-For-Service Activities

Career counseling and assessment.
Coaching group for adults with ADD.
Couples therapy.
Didactic therapy with psychology doctoral students.
Divorce consultation to couples that are separating/divorcing to do so more
knowledgeably and smoothly.
Family therapy.
Hospital consultation on medical units in a hospital for individuals whose care is not
Hospital consultation by contract to provide psychological assessments.
Individual psychotherapy for elderly people who have Medicare.
Individual psychotherapy for mentally retarded people who have Medicare or Medicaid.
Individual psychotherapy with people who pay out of pocket.
Individual psychotherapy with people whose insurance coverage is not managed.
Premarital assessments.
Premarital counseling.
Psychological testing for adults with complicated emotional issues, as an adjunct to
Psychological testing of school-age students who have been referred because of behavior
Psychotherapy with individuals who pay reduced fees for services.
Psychotherapy (via contract) for school students.
Psychotherapy for residents in a private girls boarding school where parents pay
out of pocket.
Re-marital assessments.

Forensic Psychology

Assessment of law enforcement officers
Assessment involving certification of adolescents to be tried as an adult.
Competency evaluations to determine if one needs a guardian.
Child custody evaluations.
Child protective service evaluations.
Competency evaluations of children where there has been a sexual abuse allegation.
Consultation to divorce attorneys on client management.
Consultation to attorneys on presentation strategies, including how to cross
examine witnesses
Evaluations for alcohol and drug problems for the courts.
Evaluations of competency to stand trial.
Evaluations for individuals on probation and parole.
Evaluations for involuntary hospitalization.
Expert witness for U.S. District Attorney in sexual abuse cases.
Independent medical examinations of individuals involved in personal injury claims to
determine medical necessity of care being provided.
Mediation services for couples that are divorcing.
Personal injury evaluations following a motor vehicle accident referred by physicians or
Psychotherapy for individuals referred by probation/parole.
Psychotherapy for police officers who are problematic.
Psychotherapy for the court related to parent-child reunification.
Psychotherapy for juvenile delinquents as part of probation order.
Psychotherapy with victims of crime.
Psychological evaluations of juvenile delinquents for the court to aid in
treatment planning.
Psychological evaluations of adolescents placed in correctional settings to assist in
making placement and treatment recommendations.
Psychological evaluations for the court to aid in sentencing.
Psychological evaluations to determine diminished capacity.
Psychological evaluations to determine suitability of client for domestic violence groups.
Psychological evaluations as part of death penalty to determine mitigating circumstances.
Psychological evaluations in sex discrimination cases.
Psychological evaluations of parenting skills for the court.
Review of forensic reports and records submitted by other mental health professionals for
Screening applicants for lethal weapons certification.
Serving as an expert witness.
Sex offender evaluations.
Sex offender treatment for individuals ordered by the courts.
Substance abuse evaluations for individuals on probation and parole and as part of
sentencing through the U.S. Bureau of Prisons.
Teach a tobacco education clinic for minors caught using tobacco in a diversion program.
Teach a two-session training program for divorcing parents required by the courts.

Group Therapy

Group therapy for adult children of alcoholics.
Group therapy for adolescents.
Group therapy for alcoholics.
Group therapy for ADHD children.
Group therapy for anger management.
Group therapy for batterers ordered by the court.
Group therapy for decision-making.
Group therapy focusing on growth issues and the study of personality
structure and dynamics.
Group therapy for individuals undergoing separation/divorce.
Group therapy for individuals with chronic pain.
Group therapy for inpatient psychiatric patients provided daily and paid for by contract.
Group therapy for male veterans with PTSD paid for by the VA.
Group therapy for men's issues.
Group therapy for nurses with chemical dependency.
Group therapy related to spirituality.
Group therapy for seniors dealing with grief issues.
Group therapy for singles.
Group therapy for spouses of individuals who have Multiple Sclerosis.
Group therapy for widowed.
Group therapy for middle-aged women focusing on personal growth issues.
Group therapy for individuals who have experienced domestic violence.

Health Psychology

Behavior management groups for parents with children who have brain damage.
Case consultation to inpatient drug and alcohol treatment center.
Diagnostic evaluations with nursing home residents.
Diagnostic evaluations in a chemical dependency treatment center.
Hypnotherapy consultation to teach self-hypnosis and relaxation.
Hypnosis for smoking cessation.
Hypnotherapy for pain control.
Hypnotherapy for hard to treat medical conditions
Hypnosis for weight control.
Neuropsychological evaluations for individuals experiencing a traumatic brain injury.
Neuropsychological evaluations for a dementia clinic.
Psychological evaluations for individuals undergoing medical transplants.
Psychological evaluations of individuals concerned with cognitive decline, especially
memory loss.
Psychotherapy with nursing home residents.
Running a weight management and fitness program.
Stress management training as part of a work-hardening program.

Psychoeducational Services

Counseling for children who are underachievers in school.
Counseling for children who have learning disabilities.
Consultation with high school study team.
Educational consulting meeting with parents and children to design and implement
educational plans to enhance achievement.
Learning disability evaluations.
Parenting guidance for children with ADHD.
Parenting guidance for children with learning disabilities.
Psychological evaluations for special education eligibility.
Psychological evaluation to determine presence of mental retardation.

Psychological evaluation for school system(s) and/or attorneys when a problem exists
between a school and a parent.
Psychotherapy on-site for special education students by contract with the school system.
Testing for placement in gifted programs.

Services To Government

Consultation to Social Security Administration reviewing cases of disability applicants.
Consultation to federal agencies related to mental retardation.
Evaluations of applicants for Social Security Disability.
Psychological consultant to State regulatory boards.
Psychological evaluations for adolescents in a county-run long-term facility.
Psychological evaluations with individuals through State Vocational Rehabilitation
Psychological evaluations with individuals who are on Workman's Compensation.
Psychotherapy for foster children paid through Medicaid.
Psychotherapy with individuals who are on Workman's Compensation.
Psychotherapy with individuals through State Vocational Rehabilitation Services.

Teaching and Supervision

Consultation groups for other mental health professionals.
HIV training to mental health professionals.
Individual case consultation to other therapists.
Paid speaker to regional, national, and international organizations on behavior change
Psychotherapy supervision of graduate students in training.
Psychotherapy supervision of postdoctoral residents in training.
Psychotherapy supervision of therapists applying for AAMFT certification.
Supervision of interns at a State Hospital.
Teach courses related to spirituality.
Teaching courses to undergraduate and graduate students in a Department of Psychology.
Teaching courses in Department of Gerentology.
Teaching in a graduate program in Pastoral Counseling.
Teaching adult education classes at a university.
Teach classes for eating disorders and problems associated with obesity.
Workshops related to trauma and dissociation.
Workshops and lectures on mental health topics for the community.
Workshops and seminars on relationships for the general public and religious groups.
Workshops for other mental health professionals.


Conduct a research service to individuals writing journal articles.
Daily radio show educating the public on psychology issues.
Developing and marketing a psychological test.
Developed and market behavior change programs through software and
therapist protocols.
Employee assistance program assessment and short-term therapy.
Evaluations of individuals considering entering the priesthood.
Mental health practice development: creating promotional materials for marketing.
On-call therapist as part of emergency response team.
Peer review of records for an insurance company to determine necessity of assessment
and treatment.
Personal assessments for missionaries.
Psychological evaluations for students at the university law school.
Write a newspaper column for psychological applications for geriatric populations.
Writing of self-help books.
Writing of text books.

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