Badass Therapists Building Practices That Thrive

156 The Exodus: Why Therapists Are Leaving Group Practices

• Dr. Kate Walker Ph.D., LPC/LMFT Supervisor • Season 3 • Episode 156

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What happens when therapists abandon group practices en masse? This phenomenon is sweeping across the mental health field, leaving practice owners scrambling to understand why their associates are heading for the exits. At the heart of this exodus lie several critical issues that, once recognized, can be addressed to create thriving, ethical practices where clinicians want to stay.

The financial relationship between practices and clinicians represents the most significant source of dissatisfaction. Fee splits of 50/50 or 60/40 aren't inherently problematic, but the lack of transparency about where that money goes creates resentment. When clinicians generate thousands in revenue but don't understand how their contribution supports the business infrastructure, they question the value of remaining with the practice. Similarly, practices that pass insurance clawbacks to clinicians or make them wait for payment until insurance reimburses claims create financial instability that drives talented therapists away.

Beyond compensation issues, many practices make promises they can't keep. The most damaging is guaranteeing full caseloads to new hires without having the marketing infrastructure or client base to deliver. Therapists who join a practice expecting consistent work find themselves with empty schedules and insufficient income, forcing them to seek opportunities elsewhere. Successful practice owners understand that growth should be organic—adding clinicians only when current therapists are at capacity and there's genuine client demand.

The power dynamics become even more complex when practice owners also serve as clinical supervisors. This dual role requires careful navigation to maintain boundaries and ensure associates feel supported in both their professional development and financial wellbeing. Practice owners must recognize this inherent power imbalance and take extra steps to create safe spaces where supervisees can voice concerns without fear of retaliation.

Building an ethical group practice isn't mysterious—it requires patience, strategic planning, and a commitment to fair treatment of clinicians. Seek guidance from business resources, learn from adjacent industries, and prioritize creating a workplace where therapists feel valued and fairly compensated. The return on this investment will be staff retention, positive word-of-mouth, and ultimately, a thriving practice that makes a meaningful difference in your community.

Ready to transform your group practice? Subscribe for more insights on building an ethical, sustainable therapy business that benefits both clients and clinicians alike.

Get your step by step guide to private practice. Because you are too important to lose to not knowing the rules, going broke, burning out, and giving up. #counselorsdontquit.

Speaker 00:

Hey, I'm Dr. Kate Walker. Welcome to another episode. Yes, I'm wearing the same shirt because we're recording two episodes back to back. And this one is about why people are leaving group practices. It's a thing we monitor the internet everywhere. No, not everywhere, but we're seeing this a lot. We're seeing from one end, group practice owners are having folks leave and they can't hire anybody else on. There's, you know, everybody's going to, you know, this is them talking, not me. They're going to Hedway, they're going to Alma, they're going to whatever all the things are. But then we also hear the other side of folks saying, hey, look, this is why I'm leaving group practices. In fact, I had a I looked at a thread a couple of weeks ago, and someone, it was very, very, very well written. This is exactly why I left my group practice. I've seen group practices uh fail, and um it's just, you know, we have a shortage in this country. And the whole mission behind Kate Walker training is we want to keep you in business. You're too important to lose to something like you didn't know how to do business and all your employees left you. So that's what we're focusing on today. We'll hit supervision a little bit, but we just finished three episodes about toxic supervision, supervisors in dual role of boss and supervisor, and then associates, how to speak up to your supervisor. Uh, but we may still hit a little bit on, you know, if you're a supervisor and you own a group practice and your associates are leaving you. So, Jennifer, I'm gonna start with you. What are the things out there that we're seeing about why people are leaving group practices?

Speaker 01:

Um, one of the biggest ones I see is the fee splitting. What does your pay look like? Um, you know, I I saw a post the other day, and they were offering um associates jobs and they were gonna pay $30 a session in a group practice. And and it was just, should I take this job? And just no, that's no, that's you know, when are we gonna speak up? But but the biggest one is these splits, these 50-50, 60-40, 70-30, and and what is that money going to? Where where's the transparency? Okay, you took 40% of my session rate. Okay. Um, but I had 50 sessions, and if it was $40, let's say we had $100, you know, now we're in the thousands. What what did that thousands of dollars go to that month?

Speaker 00:

But yeah, and and business owners, you may own the building and you or you may be leasing the building and you're on the hook for lease money and uh the overhead, you know, that to run that business. Well, have a meeting with your staff and explain, you know, okay, our air conditioner broke last month, or uh, we got to get a new copy machine. But again, how much of that are you passing along to your employees or 1099 contractors? We're gonna kind of use those terms interchangeably today. And how much is it changing? So are you doing 40% this month, and then next month you're saying, hey, the air conditioner broke, I got to take 50%. Your contract, your policy, and procedures should rule when it comes to payment. Um, but that's not all. Um, Jennifer, you want to hit the whole, you know more about insurance than I do. I mean, how can like a clawback affect employees?

Speaker 01:

Well, some, you know, clawbacks are fun. Insurance companies want to say, yes, yes, do your therapy, but you didn't say some magical key phrase in your notes, so therefore we don't have to pay for that. And so a lot of people are running into this clawback scenario. And I've heard some instances where group practice owners are passing those clawbacks on to their clinicians and and making the clinicians, you know, repay that money. Somebody's got to repay the money. You've got to decide whose responsibility is that.

Speaker 00:

And if that employee is a 1099 contractor, I mean, can a business even do that? Can they pass along a liability like that? I mean, that's I'm no attorney, we're not attorneys, but I'm thinking, okay, if I'm trying to think of a situation where if I hire someone to come and paint my house, you know, and they're in the middle of a job and I say, Oh, I've got to pay you less because uh a tree fell on my car and I don't have any, I mean, the the painter would say, hey, no, no, this is what we agreed to. This is my price. I'm an independent contractor. So it's definitely, I'm gonna go back to the transparency in a second, but the clawback is a huge issue. And if you're listening to this and you're an employee in a group practice, I would definitely go look at your contract and say, okay, how will clawbacks be handled? You may have agreed to something you wish you hadn't agreed to. Um, but let's get down to the minutiae of insurance. Um, so pay pay can change, right? I mean, Jennifer, if a payment or does it stay the same? Like if an insurance company contracts with me to provide services at $80 an hour, does it stay $80 an hour?

Speaker 01:

From what I understand, yeah, it doesn't change. But in Clawbacks, it reminds me like, if I if I buy $400 worth of merchandise at Target and all of it breaks, and I take that $400 worth of merchandise back to Target and say, this is broken, I can't use it, and they give me a refund. They don't go to all their cashiers and say, hey, I'm gonna need you to give me this money back because they brought in a refund and we can't cover that. So it's coming out of your pay next week. All of you gonna spread it out equally. You know, it's kind of it's is that not part of being a business owner, taking on those liabilities?

Speaker 00:

I like that example so much better. And that's true. I mean, any business is going to have some sort of equity, some sort of fun, so that they're able to do the things they need to do to stay in business. So if you're getting a paycheck, so I'm talking to you, employee in a group practice. Can you look at your pay stub and see, okay, these are the five services I delivered on Monday? Okay, I had one no-show, so I got paid for these four, and uh this was this insurance, that insurance, this insurance. So, Jennifer, if every insurance pays at a rate that's decided upon, I should be able to look at my pay stub and see every service I delivered, how much paid, and then my split, right?

Speaker 01:

I that's that's what I would um encourage to use as best practices. I know that doesn't always happen. And I've even heard instances where um a lot of group practices will withhold uh an a clinician's pay until insurance pays out. And they'll say, hey, insurance hasn't paid out on your the first 10 sessions from the month. We'll pay them when we get them. You know, and if and if that's what you're doing as a practice owner, you're waiting on that insurance reimbursement to even pay your employee. I don't know that you're gonna retain that employee because they're coming to you looking for consistent pay. And if every month I'm like, oh, I made $5,000. Oh, insurance was behind, so I made $1,000. Nobody, nobody can live like that. That's not sustainable.

Speaker 00:

And let's be let's be fair, okay, especially small communities, new business owners. I mean, if you're hiring everybody in your practice as a 1099, you know, conceivably you could do that, right? I'm I'm only gonna pay you when I get paid. And you could have it in your contract. Okay, I get that, and I'm totally on board with that. Um, but in a situation where you haven't informed the people that you're hiring that you're not gonna pay them till you get paid, or they're used to a regular paycheck, but then oh my gosh, we had something happen a couple of years ago where I know insurance something blew up and people were getting paid and they couldn't pay their employees. And so I'm not saying this is good or bad because business owners, you can only do what you can do, and especially if you take insurance, I mean you're kind of handcuffed. But the the topic of this episode is why people are leaving group practices. And I'm always gonna compare this to if you're a physician working in a big practice. You know, a physician is gonna get paid, and the the volume and the amount of money that will be in the the kitty, for lack of a better term, is going to be what helps that physician continue to make what they're gonna get paid, uh, they're gonna make. So I know that didn't make sense, but if there's a clawback, you can bet that physician is not gonna feel that. The business is going to absorb that from the funds, from the capital that they have set aside to handle rainy days, right? You've heard of a rainy day fund. Well, that's what that is. And so many times business owners they don't set aside a rainy day fund, or and this is real, your rainy day fund runs out. And we're coming from Texas. Texas is number 50. I get it. Nobody's getting paid. And so this goes back to another episode where I talked about this. Business owners don't add practitioners until you just can't handle the volume anymore. I have people who will say, Well, you know, there's this great LPC and I want to hire them. Uh, I told them I could get them the clients, and so I promised them that we're gonna do the marketing and we're gonna get, and I'm thinking to myself, why are you hiring somebody if you can't get them clients? Yeah. Like where there should be a waiting list. Okay, uh, Jennifer, you were gonna talk about that.

Speaker 01:

So I'll No, you're good. No, that that's a huge one. Um I'll g I'll give a great example. There was a company that was expanding an IOP. They're expanding to new states, they're taking on new contracts. Well, they expanded to three new states. Went through, hey, we're gonna get contracts. They um hired uh two 1099 therapists in each of these states, right? Because we're gonna take on these clients. Um, and then three months went by, and they one therapist had two clients, and I think the rest of them might have had one. Well, the therapists ended up ghosting the practice. They just because it wasn't it wasn't feasible for them. You know, they were guaranteed we're going to market and then no marketing was done. And they guaranteed we're gonna fill your caseload and and no caseload was filled. And how long can you expect somebody to hang around waiting for you to fulfill promises? I mean, it's not a marriage. We all know in marriage people do that all the time. This isn't a marriage, and I can go down the street or I can hang a shingle out of my own door. So if you if you cannot make promises and then not deliver and then scratch your head and wonder why these people left, you have to have a clear, transparent plan in place going into it. Not just, I'm gonna feel it. How? Tell them how you're gonna feel it. Marketing's a full-time job, isn't it?

Speaker 00:

Oh so if you're a business owner, I mean, I want you to think in terms of like, you know, Shark Tank, right? If you've got a startup and you're like, okay, I want my startup fully fully staffed, all right. Well, get an angel investor and pay everybody while they're waiting for their client load to pop, right? And I hope right now you went, Angel Investor, what's that, right? That just doesn't happen in the counseling world. Or please don't don't do that. Don't get a loan to do that. The flip is start your business and as it grows, because it will, because you're awesome, and the world needs you, and your community is going to grow to rely on you. As it grows, then hire people to plug in the hours and your wait list of clients because you're doing such an amazing job. We just see so many people, they they want a full staff, a beautiful web page with all the people and all the specialties first. And I know for me, Jennifer's not kidding. Marketing is a full-time job. I am on every day just trying to stay ahead of trends. Don't even get me started on AI and SEO. You guys know you can go back and listen to the episode. So you're a business owner and you're probably trying to see clients too. So just remember what you promise, if you can't fulfill that, nobody's gonna stick around. And feelings get hurt. I mean, uh, we that's this is when a lot of complaints happen. Um, you know, I the the money thing, you know. So what have we talked about? We've talked about transparency with money and then transparency with what you promise. And all of that can go into a contract. But business owners, if you get in a bind, if you turn to your employees, just like Jennifer was saying, target looking at their cashiers and going, hey guys, can you guys give up 10 bucks an hour? Because we're feeling it. That's not fair. And the the power hierarchy when it comes to supervisors, I mean, we've had cases where you know that we've that we've done consultation and and also, of course, on the on the internet, where we've got the boss who's also the supervisor, and then in some cases holds the visa for the person who's working for them who's working to get their citizenship. I mean, think about that level of power if you then as a business owner look at your employee and say, Hey, you're gonna have to hold off on your paycheck for a couple of weeks. I mean, how's that gonna affect the supervision relationship, the employee relationship? And what do you think is gonna happen when that person's able to finally leave your practice?

Speaker 01:

It's like an abusive relationship. It really is. I mean, yeah, and I think that's that's when you know the sign of a truly good supervisor is when they are aware. And I don't mean just, oh, I'm aware and of its existence. When they truly understand the power imbalance that that exists and they they maintain mindfulness, not just at the beginning, not just three months out of the year, but every day they take that into consideration. And if you have made it to where your associate has no recourse to even bring a concern to you, then then I'm kind of at a loss for words. Yeah.

Speaker 00:

And when we teach the 40-hour training to become a supervisor in Texas for LPC, LMFD, and social work, that is one of the things we really, really try to pound is if you are going to be a business owner, first of all, bless you. You're a special breed, we want to support you. And if you want to be a business owner and a supervisor, here are the 10 extra steps you need to take so that you can preserve that relationship. So there's still openness and honesty, and everybody feels good at the end. And you're still colleagues, right? You're still gonna be friends after the thing's over, after the hours are fulfilled.

Speaker 01:

Well, and that the I'll I'll just add one more thing on that. If you are trying to build and scale a thriving group practice, and you're also trying to build and scale a thriving supervisory practice, um there is no better marketing than an associate that went through with you and is out there saying, I had the best supervisor ever. I was I was paid well, I was taken care of, I was supported. If I had an issue, I could come to that person. You'll stay full. You'll have associates knocking down your door, but I guarantee you, if you don't take care of your associate, they're gonna tell everybody with a set of ears how awful you were. Absolutely. That's a great way to just make sure you either have a bunch or you have none. Absolutely.

Speaker 00:

So pay, and and remember, I'm not saying pay well. I mean, granted, please don't pay your qualified people, you know, $30 an hour. So pay competitively, pay consistently, pay transparently, and don't try to pass on your problems to your employees or your 1099 contractors. And if you are going to take it to the next level and be a group practice, do it the way, do it the right way. Start with the volume you have and what you can market. And as your practice grows, then you can grow. And then start to shower those employees with good things, offer them benefits, make them W-2, help them save for retirement. Don't be another thing in their life that they have to worry about. I mean, you've been on jobs where you have to worry about your boss. Don't be that boss. Be the boss that's going to grow ethically and in a way that helps your employees do the best work. Um, and the resources out there, right? I mean, there's the small business development, uh, which is practically in every town, the chambers of commerce. Um, you can get free business help besides this podcast, which I'm so glad you're here. But there's so many places you can get free business help. Um, I told Jennifer one of the things I was going to make sure I mentioned, you know, when I was coming up in business, one of the things I love to do was to take people out for coffee and pick their brain who weren't counselors, but owned businesses. So, you know, hair salon owner, uh, massage owner, like a massage envy, right? It's the same model. You've got people, they're either delivering services or they just got no-showed, or they're filling out paperwork and not delivering services, or they're maybe at the front desk. How do you do that that business? I mean, it can't be a mystery. We're not the only ones doing it. So ask questions. Ask how other people are doing it. And you won't be able to do it exactly because we have a medical model, so it's going to be a little bit different. But man, there are tons of similarities. You don't have to reinvent the wheel.

Speaker 01:

No, and you haven't done one in a while, I don't think, but you have tons of really great podcasts on how to scale a group practice, how to scale private practice, all of those things um you've been talking about for years. So there's podcasts on how to scale appropriately and ethically and at the right time.

Speaker 00:

So hey, we'll probably link to those in our show notes and in the blog. So go down there, see what we'll link to, go there. Um, and I have some amazing colleagues here in Texas that are running group practices ethically, profitably. They are assets to their communities. I they do advocacy work. They're just amazing human beings. I'm honored to know them. And so I will work really hard to get them to be guests on the podcast, and we will pick their brains so that you, amazing business owner who wants to grow your practice and improve your community, can do the things you need to do and not worry about are you? I don't want to say, let me just say making your employees mad or worry that you don't have the ethical business practices in place. Because I know you want to do a good job. Um, anything you want to add to that, Jennifer? No, that was great. That's it. That's it for today. Thanks for listening, watching, and we'll see ya.