Group Practice Incubator Program

Goal:  To create more opportunities for clinicians to develop professionally as either clinical directors of their own location or independent group practice owners.  The long term goal of Catalyst is to create sustainable leadership opportunities and intergenerational wealth particularly for emerging leaders who hold marginalized identities.

 

Note:  This path still will be a lot of work for any clinician who is interested.  The mentorship program is not meant to make the process of group practice ownership easy, it is meant to make the process attainable and less traumatizing.  Any clinician who is interested should evaluate their capacity to do this work on top of seeing at least ¾ of their current caseload until their group hits critical mass.  

 

This is not a path to passive income.  Being an ethical and dedicated clinical director takes a ton of work, so it would be more like shifting your job slowly from seeing clients to supervising/mentoring/administration.  Financially, the rewards take some time to appear.  A practice needs to hit critical mass before the clinical director can reduce their caseload and mostly get paid to be a mentor/administrator - and there are a lot of years of hard work to get to that point.

 

Why is an incubator program helpful or needed?

I’ve noticed that in other aspects of our field – medical social work or community mental health, for example – there are paths toward leadership (putting aside my gripe that those management positions provide overwork rather than ownership).  I’ve often noticed that in the private sector there are very skilled clinicians who could move into group practice ownership but are blocked by lack of mentorship and lack of access to financing.  I also don’t believe it’s necessary to have the experience of running a solo independent practice.  In fact, the experience of running a solo practice has very little to do with running a group.  With proper mentorship, someone could go directly from being part of a group to owning their own group.

 

Why would I want to start a group practice? 

If you have outgrown front line clinical work, there are plenty of ways to make your mark – being a speaker, being a clinical supervisor, writing a book, creating a new therapeutic modality.  Being a group practice owner is fundamentally about the joy of mentorship.  It allows you to have a larger voice in the quality of our profession.  Also, a launched group practice owner often has time to devote to things that are important – advocacy, training, etc. 

 

What does it look like normally to start a group practice? 

Usually a clinician is in private practice.  They know the basics of how to build a caseload and they might even have some skills in marketing.  They have more referrals than they know what to do with, and they might like doing clinical supervision.  They might think, “I have a lot of knowledge and I have more to give.”  Between that moment and having a fully functional group, there is a wide chasm of learning and paying for things.  Being an employer is exponentially more complex than being in solo practice.  A budding group practice owner needs to learn everything from employment law to HR to HIPAA compliance.  They need to be their own research assistant, tech support, bookkeeper, intake coordinator, HR department, and marketing team – at least until the group is big enough to hire those things out.  The business will be a net loss for the first few years and they’ll need to rely on seeing clients or on other sources of income to pay the bills.  

 

Here’s the thing – all of that is learnable.  It doesn’t take any extraordinary intelligence or insight to learn how to manage a practice.  But access to that information is extremely scarce or expensive, and access to financial resources depends on intergenerational wealth and privilege.  

 

What is this incubator program doing that would change this pattern?

  • Timing - We’re changing when a group practice owner would pay for things - so you’d pay for the business when you already have consistent profits, rather than when you’re just starting out.  I made zero dollars of profit the first year of Catalyst, and the next few years were also dismal.  The first few years are when most businesses (about 50%) fail due to lack of wisdom, resources, and wealth privilege – this mentorship program is designed to address this problem.  There’s a lot of costs involved in starting up a business, and I’m trying to help you absorb those costs at a time when they are actually affordable.  

  • Training - How great would it be if the leaders in our mental health community had training in how to be leaders?  How to be business owners?  How to supervise?  A traumatized owner is going to blow trauma through their employees.  A confident and grounded owner is going to foster a healthy place to work.

  • Less burnout - You would start ownership while already having the capacity to hire what you need – office manager, insurance biller, bookkeeper, etc.  This would save you the overwork of trying to build the business while also simultaneously holding all the roles and trying to make an income.

 

Eligibility:

A clinician who has:

  • Been employed by Catalyst for at least 2 years in good standing (former employees are also welcome)

  • Served as a WA State approved supervisor for at least two Catalyst associates (note - being a Catalyst clinical supervisor is required for every year of this process, to continue building supervisory and mentorship skills)

  • Demonstrated ability to understand and apply social justice concepts to therapy and supervision

  • Demonstrated ability to attend to detail-oriented tasks efficiently, accurately, and in a timely manner.

  • Can a clinician do this process with a partner?  Yes, but only if the partner also meets the above criteria, and if the partners engage in “Cofounder Therapy” by an experienced couples cofounder therapist.  Having a partner makes it both easier and more complex.

 

Flow:

Please note that the below descriptions are informational.  Anyone interested will have a contract to protect their interests, with more detailed definitions and information, particularly of how net profits are calculated and what would be included in a buyout price.

 

Year One:  Identity Formation - still at the Catalyst location

  • Clinician will continue to see clients and act as a clinical supervisor to at least one Catalyst associate.  This will continue to be paid according to the employee handbook.

  • Clinician will add an additional role - that of the “clinical director in training” - for the duration of one year.  This role includes:

    • Clinician will learn how to be a clinical director, first by shadowing Katherine, then by sharing the duties, then by doing it yourself.  This is to see if it’s in line with the kind of work you want to do.  Due to the internship nature of this role, this will be paid a monthly stipend that escalates as responsibilities increase.  Please see the employee handbook for information about the scope of duties of the clinical director role.

    • Clinician will work with Katherine to identify the core beliefs they hold for their group and their supervisory philosophy

    • Clinician will work with our billing and intake coordinators to learn the intake, insurance, and billing process

    • Clinician will work with Katherine to identify and create a brand for the new location

 

Year Two:  New Space - this will be a new location under the umbrella of Catalyst but with its own branding.  All employees will be Catalyst employees, participate in our trainings and be supported by our admin staff.  

Duties:

  • Training on how to interview, hire and train new clinicians.  Ok for clinician to learn by using Catalyst onboarding trainers and sitting in on the trainings.

  • Learning the financials

  • Learning how to create and carry out a marketing plan

  • Leasing and furnishing a space (if in-person visits are part of the vision of this group)

  • Clinician will no longer be the Catalyst clinical director in training, but will become the clinical director of the new location.  This is not a salary position.  This would be an escalating profit sharing system, starting at 20% per year for that location at year two, then increasing in increments up to 50%.  It is possible that, particularly in the year or so of a new location, this location will be annually a net loss.  If that’s the case, the clinical director will not have to absorb the cost of the loss but they also will not get profit sharing.

 

Years Three to Four:  Continuing to Grow

  • Continuing to grow the group.

  • When big enough, hire an intake coordinator/office manager for this location.

  • Second year is paid at 30% of net profits for this location, and third year is paid at 40% of net profits for this location.

 

Year Five+:  Decision

At any point after year 4, a clinician who has served as the clinical director of their location can choose to either: 

Remain within Catalyst as that location’s clinical director:  

  • Reimbursement will remain at 50% of net profits for this location (net profit = gross profit minus expenses).  Advantages are that the clinician will have coverage from other clinical directors for vacations, no additional work is needed to set up the new location, and the infrastructure will remain Catalyst’s.  Disadvantage is that the clinician will not have full independence to change policies, contracts, etc and the reimbursement will remain 50%.

Buy out the location:  The clinician can choose to buy the location.  Advantages and disadvantages are opposite of above.

  • Valuation will be assessed by an independent professional business evaluator.  It will take into account the amount of reserve funds Catalyst has accrued for this location, losses sustained during the build up phase, and capital outlay.  A profitable year will not serve to “pay back” an unprofitable one. 

    • Example (note this is a very rough example):  Catalyst funded $50k in the new location’s savings.  We also absorbed losses totalling $45k for the first several years.  The new location has been leased and furnished totalling $15k.  Computers have been purchased for staff, also totalling $10k.  This would result in a buyout price of approximately $120k.

  • It is completely up to you if you save your profit sharing toward buying the business, rather than taking out a loan.  If the clinician does not have savings to buy the location outright, they will need to get a commercial loan - Catalyst will not assume the loan directly.  

  • Buyout Year - We’d then spend year 5 (or whatever year you decide to buy the business) creating the back-end structure of the business for that location (separate legal entity with separate insurance paneling, technology, L&I, malpractice insurance, admin staff, etc etc etc).  Catalyst would provide the information and guidance for setting up the required systems, but the legwork would be done by the clinician.  

  • At the end of the buyout year, the employee will formally buy the location and clinicians/admin staff for that location will become employed directly by them.

 

Hopefully the result will be a cluster of group practices owned by individuals in our community.  By reducing barriers to ownership, we are empowering people with fewer family resources.  By providing a robust training program focusing on clinician support, boundaries, and ethics, we are changing the landscape of mental health care in the Seattle area.