Strategies for practicing psychology during an economic crisis

By Rosalind S. Dorlen, Psy.D., ABPP
January 1, 2009



As the world’s financial crisis deepens and with our economy in severe recession, we have all been affected. Falling markets and rising unemployment have increased stress levels from Wall Street to Main Street and from Bourbon Street to Sesame Street.

Psychologists in the Netherlands have been carefully monitoring the progress of the prescribing/medical psychologists in the United States. They are now focusing their efforts to pass a law that allows prescriptive authority for properly trained psychologists.

The plunge in financial markets and the dramatic loss of personal and corporate assets have sparked a surge in mental health problems around the United States. Across the country, psychologists are saying they are receiving calls from increasing numbers of patients overwhelmed with anxiety, especially about money and finances.

This development, as reported in The Wall Street Journal and other publications, comes as Americans are cutting back on a broad spectrum of health care, ranging from preventive tests to prescription drugs. Studies indicate that in times of economic crisis, when people lose their jobs and insurance, they tend to reduce their mental health care more readily than their general medical care.

The results of the American Psychological Association’s annual Stress in America survey released in October indicate that stress is taking its toll on Americans’ physical and emotional health. The survey found that money and the economy topped the list of stressors for at least 80 percent of those surveyed, that women are most affected and that the associated stress is impacting on the health and coping behaviors of Americans. Clearly, there is a great need for psychological services. The big question is: Will Americans be able to pay for them?

Those of us in the trenches practicing psychology have been affected as well. Psychology is not a bullet-proof profession. Even psychologists who report they haven’t yet been directly impacted by declining reimbursements and patients’ inability to pay for services are still experiencing anxiety about their practices.

So what should psychologists be doing to ensure their sustainability and continue to execute their ethical responsibility to their existing patients during these lean economic times? Practitioners in independent practice might consider the following:

•Know your own worth. It is important for you to be able to demonstrate your value through recognizing how your services are benefitting your patients. Appraise your strengths and determine in what ways you need to improve your skills and knowledge base to increase your value to your community, colleagues and patients.

•Engage in a “financial check-up.” It is important that you identify the accurate financial status of your practice. Determine all your financial needs and expenses so you can plan your economic forecast. During these financially turbulent times look for ways to conserve your assets. Based on your findings, consider where your revenues originate and develop a sound fiscal plan to accomplish your goals. Consult with your own financial consultant to assist your planning if needed.

•Think through your relationship with money. The subject of money for many is a culturally taboo topic rarely discussed. How we think and feel about money has a direct effect on the actions we take in our professional and personal lives. During these difficult economic times it is important that you explore your feelings and needs so that you can appropriately assist patients, since at this time money for so many is a major source of stress.

  • Take steps to diversify your practice. In the same way that investment advisors suggest diversification and reallocation of financial assets, psychologists need to diversify their practices by developing new skills, alternate revenue streams and additional niche opportunities. You should also make connections with other professional groups and business owners in your community, e.g., Chamber of Commerce, Rotary and keep your eyes open to new opportunities.
  • Cultivate and protect your optimism. Surround yourself with encouraging people not the naysayers who have a doom and gloom approach to the current business climate.
  • Manage your personal assets. Self care and sleep are often the first casualties of prolonged stress. Evaluate your own coping behaviors. For example, are you smoking, increasing your alcohol consumption or developing unhealthy eating habits? Are you finding you are more moody and irritable than before? These are red flags for all of us signifying that the “healer may not be well.” Take steps to involve yourself in your own care and, if needed, obtain professional psychological help for yourself.
  • Follow the money: If you find that you have some available time, use it to take a course, learn a new skill, take advantage of a new practice opportunity or attend a conference and re-connect with colleagues and friends.
  • Be visible in your community. Continue professional writing, public speaking, teaching, volunteerism and pro bono work. Get involved and be active. Do not just sit in your office and wait for the phone to ring.

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Rosalind S. Dorlen, Psy.D., ABPP, is a full-time independent practitioner in Summit, N.J., and a fellow of APA. She has written and lectured about marketing and the financial issues associated with independent practice. She can be reached at: Dorlen@mindspring.com.

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