I have had many requests for information about how to start an organization like the Boulder Psychotherapists' Guild. In response, I prepared the following to answer commonly asked questions about starting a Guild and to explain the principles of the Guild.

The Boulder Psychotherapists' Guild is a model for interdisciplinary cooperation and for maintaining quality mental health services. The Guild's success demonstrates that psychotherapy is a valuable service for which consumers are willing to pay. Through cooperative marketing and public education the Guild is helping our members increase their managed-care-free practices.

When I began the Guild in 1994, I was concerned that the managed mental health care industry was flooding the public with inaccurate information about mental health and psychotherapy. The industry was claiming that their ultrabrief therapy and bureaucratically-managed treatment was superior to traditional, clinically-determined treatment. They were making these claims in spite of most clinical and research evidence showing that managed care psychotherapy was not the same quality as traditional, client-focused psychotherapy. I feared that managed care would prevent patients from knowing when therapy could help and harm the reputation of all therapists.

Some colleagues and I came up with the ideas that became the foundation for the Guild: Therapists joining together and pooling their money to educate the public both about the value of real psychotherapy and its superiority to managed care psychotherapy, and as a result of this education, generating more self-pay clients which helps pay for the cost of this pubic education. As I realized that I was wanting to move faster than my colleagues, I personally incorporated the Guild and was able to recruit 57 therapists to join the first year.

The Guild is different from other responses to managed care in several ways. First, it is interdisciplinary. It promotes all mental health professions, not just one. Because the public generally prefers choice, I believe that being interdisciplinary is a pro-consumer position. Second, it markets services to the true consumers of mental health, the patients, and it is not competing for third party payments. Third, it promotes the value of traditional, client-focused psychotherapy, and it is not emphasizing the development of new services. Fourth, it provides pro-consumer public education in addition to generating referrals.

Ethical marketing was first explained to me by Dana Ackley (his book is recommended later). At his seminar about building a managed-care-free practice, he explained ethical marketing to therapists. He said there were two parts to marketing, and therapists could easily do both. First, the marketing person listens to the consumers to see what their needs are. As Dana says, "Therapists are good listeners." Second, marketing people provide accurate education about their services so that the consumer can make an informed choice about using these services. As Dana says, "Most therapists are comfortable with the role of educator."

A distinction between ethical and unethical marketing is whether the information provided to consumers is accurate. In the Guild, we strive to promote psychotherapy with accurate information, and we avoid over-selling the benefits of our services. Fortunately, our services are extremely beneficial to many people, and as a result, the ethical marketing brings new patients who usually leave as satisfied customers.

In 1987 before managed care was prominent, the National Medical Expenditure Survey indicated that consumers self-paid between 45 - 48% of the money spent on psychotherapy. This survey considered government funding, insurance money, and the self-pay that came from deductibles, copays, and therapy paid completely out of pocket.

Since 1987, the portion of psychotherapy expenses borne by insurance is much smaller. In 1998, the Hay Group, an actuarial and benefits consulting firm in Washington DC, reported that the amount of money paid by insurance companies for mental health care declined 54% from 1988 to 1997. Psychotherapy Finances reported that in a Foster Higgins employer survey, the percent of employers' insurance costs that funded mental health services declined from 9% in 1989 to 4% in 1996. This is a 56% reduction in insurance money available for mental health services.

This loss of funding from insurance means that a greater portion of the money spent on psychotherapy is now coming out-of-pocket.

A readers survey by Psychotherapy Finances in 1997 found that 44% of their psychotherapist/reader's income came from direct payment from patients. Practice Strategies reported in 1997 found in a random sample survey that 47% of therapist incomes came from direct pay patients, 32% from managed care insurance, and 16% from other insurance which is presumably indemnity or unmanaged. I believe that these estimates for self-pay are high, but they demonstrate that there is a substantial self-pay market.

The reasons include: unavailability of quality psychotherapy through managed care insurance, assurance of confidentiality, lack of appropriate choice of therapist in managed care, no insurance, and denial of an adequate length of treatment through managed care. Put another way, confidential, client-focused psychotherapy is a valuable service that many patients are willing to pay for out of their own pockets. As I have demonstrated in published journal articles, the best treatment is clinically-determined treatment — treatment in which the treatment decisions are made jointly by the patient and therapist in the clinical setting. Managed care, on the other hand, offers an inferior, bureaucratically-determined treatment. Patients are increasingly aware of the difference.

After 5 years, we are receiving an increasing number of calls to our referral line, the community agencies and referral sources are telling us that our Directory is a highly valued resource, and we have increasing name recognition as an established and useful service. Most importantly, the Members report that the Guild is generating a substantial number of referrals, and many of them are reporting that they are able to maintain a practice that is independent of managed care. Based on experience with the Guild and its proven record, the number of Members in the Guild grew in 1999.

One of my major disappointments has been that gathering clear data regarding the number of referrals has not been possible. I had originally hoped to use surveys to gather data, but in practice, I discovered that surveys could not ascertain the number of referrals for several reasons.

Because of these difficulties collecting data, we cannot give an average number of referrals. However, we do know that the members are continuing to stay because they believe in the kind of marketing that we do and are receiving enough referrals to make it worthwhile to them. We are also finding that our kind of business is the kind that becomes more successful each year both because consumers tend to trust and use a well established service, and because marketing messages are more successful as they are repeated over time.

The Guild practices three kinds of marketing. The most successful is offering our services to those who are ready for therapy. This involves four advertisements in the Yellow Pages about our services and the distribution of our Directory. The Directory is direct mailed to 800 potential referral resources in the community. These include agencies, family doctors, ob-gyn doctors, family lawyers, schools, etc. The remainder of our 5500 copies of the Directory are distributed by Guild members, by request, and at give-away stands in grocery stores.

The next most successful is a long term strategy of creating a "top-of-the-mind" awareness of the Guild. This means that we want the Guild to be the first group that comes to people's minds when they think about psychotherapy or counseling. We try to create this awareness through periodic advertisements in the newspapers, and free public presentations about mental health topics. Each of these presentations is advertised both through direct mail and the newspaper. Over our five years of operation, this top-of-the-mind awareness has steadily grown.

In addition, we do some promotion of individual members. Our regular newspaper advertisements have the pictures of two of our members on a rotating basis. These pictures both make the ad more friendly, and promote the individual. Our public presentations also promote the individual who is offering the presentation. We encourage individual members to distribute Guild materials, and when they wish, to attach their business cards.

It is important to remember that this marketing is successful because it is repetitive and conducted on a large enough scale to be effective. Our success has steadily grown over the past five years as we have repeatedly given our messages stating the value of psychotherapy and explaining how the Guild can help consumers find the right therapist.

The Guild educates the public through the distribution of the material in the Directory and articles in local papers. In our five years, we have had dozens of articles published about the Guild and/or the value of psychotherapy, and our members frequently write letters to the editor. We also offer free public presentations on mental health topics.

The Guild offers a 20% discount on individual and family therapy for Guild referrals who pay at the time of service if there is no paperwork for insurance or other reasons. The rationale for this discount is that the discount helps people consider the feasibility of self-pay, and these clients consume less time than those who require insurance paperwork and/or extensive bookkeeping. From the viewpoint of fairness and justice, it is fitting that these clients should receive discounts instead managed care clients who are difficult due to the interference from managed care companies.

The discount stirs up some issues for therapists. Some therapists feel offended by the idea of discounting a service that has been fairly priced. In response, I explain that I originally came up with the idea of the discount because my medical doctor offered a 10% discount for payment at the time of service. It was a policy that made running his office easier. Once administrative costs are considered, most therapists see the discount as an appropriate pricing structure.

I have also had some people question if it could be considered insurance fraud to have one price for insurance and one price for self-pay. My response is that the different price is not just for insurance, but any kind of third party payment that has paperwork requirements. In Colorado, this is not insurance fraud. However, because each state has their own insurance laws, other Guilds should examine their own state law.

We are marketing our services to the true consumer, the patient. Patients appreciate and need the service. In the past, these consumers have frequently paid 50% of the fees for psychotherapy. There have always been many who self-paid. Because the Guild gives a 20% "no administration discount," clients now only pay 80%. This makes the idea of self pay more acceptable.

Managed care is marketing to employers who pay for the service, but are not the major beneficiaries of psychotherapy. Because psychotherapy creates a large up-front expense, employers and insurance companies have been cutting the quantity and quality of services.

There are two references that I believe are essential reading for anyone who is starting a Guild:

The Connecticut Psychotherapists' Guild, LLP.
1-800-731-8126
http://members.aol.com/cpguild

The Psychotherapy Guild, Atlanta Georgia
1-404-467-0770

Greater Kansas City Psychotherapists' Guild, Inc.
1-913-381-0082

In addition, groups in St. Louis, New Jersey, and Oregon are in the process of starting Guilds, many other groups have used some of the ideas of the Guild without starting a full Guild, and groups in other locations are considering starting Guilds.

In Boulder, there is a one-time fee to join of $200 and monthly fees of $80. For those who are familiar with marketing costs, this is very inexpensive, but most psychotherapists think that this fee is high. I believe that it is necessary to charge this much to have enough money to run an effective marketing campaign. In Guerrilla Marketing, Levinson explains that the most expensive marketing happens when business people spend so little money for such a short time that there is no return, and all the money is lost. Marketing must pass a threshold of sufficient time, sufficient exposure, and sufficient repetition before there is a return. I strongly recommend that other Guilds avoid the mistake of undercapitalizing the marketing plan.

In order to get the Guild off the ground quickly, I decided to organize it as a single-stockholder, for-profit corporation in which I am the President. As such, I am responsible for final decisions and the financial risk. Fortunately, many friends and colleagues have functioned as advisors who both contributed many of the good ideas of the Guild and told me when I had bad ideas. The quality of the end product has been a group effort.

In many ways the Guild is similar to a not-for-profit. We have a mission of public education and providing accurate information about mental health services, and our policies and budget are open to Guild members. My primary source of income is from my practice as a psychotherapist, and my income from the Guild is modest. Next year, we will be starting a Mission/Service Committee that focuses on public education and service. In recognition of these similarities, most other Guilds have been organized as not-for-profits.

Although the Boulder Psychotherapists' Guild has been the prototype for other Guilds, the basic ideas of the Guild are not ones that can be franchised. Because I believe in the mission behind the Guild, I am pleased when others can use the ideas that we have developed. I have been flattered that most of the Guilds used many of our ideas and materials, and I appreciate being acknowledged as the originator of these ideas.

I do ask for a small payment for publishing copyrighted text in other Directories. If something that I have written and copyrighted is published by another Guild, I ask a $20 per page one time fee for the use of this material; if a written piece is slightly altered, I ask for a $10 per page one time fee; and if something is rewritten substantially, I believe that it belongs to the new author.

In order to cover my costs, when people outside of the Boulder area ask for copies of our materials, I charge a $20 fee for a package of materials and handling. This package includes our Directory and copies of local news articles that we have generated.

When I started the Boulder Guild, as a new business person, I made a number of expensive mistakes. I learned from those mistakes and persisted until the Guild succeeded. I ask a $90/hr. consulting fee from other groups who were starting Guilds. Unfortunately, some of the Guilds have been reluctant to spend money on consultation and, as a result, have either failed or made very expensive mistakes. Because I would like to see other Guilds succeed, in some circumstances, I am willing to waive it or partially waive it for groups that cannot afford to pay. I strongly recommend that other Guilds obtain some initial consultation and consultation regarding plans, organizational structure, and marketing materials.

Ivan J. Miller, Ph. D.

President

11/1/00

See also:
An Alternative to Managed Care:
A "Guild" Model for the Independent
Practice of Psychotherapy,
an article about the creation of the
Connecticut Psychotherapists' Guild