Recent Data to Give Context
As of this writing, Johns Hopkins University data show over 10.5 million confirmed cases of COVID-19 worldwide, with nearly 2.7 million of those in the US alone.
Likely as a result of too-early, too-aggressive reopening by many states, the rate of new infections in the US recently spiked to over 40,000 new cases per day, significantly higher than the ~30,000 daily new cases we saw during the first peak, in April.
The pandemic has thus far killed over half a million people worldwide, and over 127,000 in the US. Thankfully, the recent spike in new cases hasn’t led (yet) to a similar spike in deaths. However, since the new-case spike is recent and the disease takes 1-2 weeks to lead to hospitalization and death, this may yet happen.
On the economic side, according to the US Bureau of Labor Statistics, 21 million American workers were unemployed as of May 2020. This is a slight improvement compared to April, but is still over 3-fold higher than pre-pandemic.
To help reduce the impact of such massive unemployment on the economy, Congress extended unemployment benefits for states with high unemployment up to 13 weeks, with some states adding a further 7 weeks. Further, the benefit level itself was increased by $600/week. However, unless this is extended even further, people will start losing their unemployment benefits in the coming weeks.
How the Pandemic Affects the Economy and Businesses
The ongoing pandemic and the upheaval it’s causing have led to several trends that will play out over the coming weeks, months, and years.
- Many states will pause their reopening plans, and likely reverse them at least partially in light of the latest spike in new infections.
- Certain industries are in such deep trouble that it’s unclear how soon they will be able to come back to anything close to pre-pandemic activity and employment. This includes e.g. hospitality, travel, automotive, energy, and leisure products.
- Many small businesses will be unable to survive another shutdown (in Maryland for example, it’s estimated that 25-30% of restaurants will never reopen).
- People feel increased anxiety and overall stress levels.
- While people long for resumed personal contact, they’re becoming ever more used to doing more through video conferencing.
- Reduced optimism leads to increased price sensitivity, as people try to reduce their spending and debt levels in case they lose their jobs.
How the Pandemic Affects Your Practice
On the practical side, therapists have been able to quickly shift to tele-therapy. Many clients adjusted to this new mode, but many others decided to hold off until in-person sessions could resume.
However, as the increased stress and anxiety continue to take their toll, virtual meetings become more the accepted norm, and reopening pauses or reverses in many states, these clients are likely to reconsider and become more open to tele-therapy.
Increased price sensitivity may make clients experiencing financial stress seek out practices that accept their insurance, or where the private-pay fees are lower. However, clients with more stable incomes may feel therapy is a worthwhile service to spend more money on in the current situation.
In the longer term, tele-therapy will replace many in-person sessions. You may consider giving up your office space to save money on rent. However, keeping your office either full-time or for a portion of the week, will let you serve those clients who prefer in-person therapy once that becomes possible again. This may let your practice stand out compared to colleagues who permanently shift to tele-therapy-only.
Another benefit of tele-therapy is that you can expand your virtual reach to any location where you’re licensed. This dramatically expands your geographic reach. On the flip side, since the same is true for therapists in other parts of your state, you may face more competition than previously. On balance, this will likely benefit therapists who previously served only less-affluent communities and who can now also serve more-affluent ones.
What You Can Do to Ride Out These Trends
While the road ahead is certainly stormy, here are some things that are within your control, and that you can do to come out of the current crisis in as good, or even better shape than before.
- Continue providing tele-therapy, but expand your marketing to more affluent areas within your state (or any other state where you’re licensed).
- Consider getting licensed in other states, especially under-served ones.
- Consider if keeping your office is the right play for you, at least part-time.
- Expand your service offerings, e.g. adding group sessions (more on this below).
- Consider creating video-based online courses to educate and help your prospective clients and others (more on this below too).
How You Can Help Your Clients
First, and foremost, providing therapy already makes an enormous difference to your clients. However, let’s see what more you may be able to do.
Clients who lose their jobs, and thus their health insurance (COBRA is incredibly expensive and may be out of reach for many), will need to pay for therapy at private-pay rates, but will not be able to do so. This will likely increase pressure on pro-bono services, likely beyond their capacity.
To help this situation, you may consider the following:
- Volunteer at least some time to a pro-bono counseling service in your state.
- Consider offering at least some sessions at sliding scale, especially for unemployed people.
- Offer group therapy, which lets you dramatically lower the cost per participant relative to one-on-one therapy, without reducing your income; this could be a good solution for someone who has no insurance and can’t afford your full fee.
- Develop online courses that position you as the go-to person for the conditions and complaints in the sweet spot of what you enjoy and where you excel; if paid, they can also provide an additional income stream, even from outside the state(s) where you’re licensed.
- Offer free content on your website, such as blog posts (if you don’t enjoy writing, create a curated list of links to posts from other experts and add just a few words describing the main message of each of those posts you link to).
Beyond all these, make sure you implement good self-care, since the pandemic-induced stress and anxiety affect you too, both directly, and even more so through your clients.
The Bottom Line
As current trends continue to evolve, you must reinvent your practice at least somewhat, to make sure you survive and even thrive in the new normal situation.
As a business expert I know says, the only thing you can be sure of is that things will never be the same. This means some will be more challenged by the new situation, while others come out even better than before. Implementing at least some of the above will increase the likelihood that your practice comes out ahead, and that you’re better able to help your clients.
Financial strategy is all about setting financial goals, crafting a plan to reach them, and doing what's needed to start implementing that plan in both your business and personal life, including changing how you run your practice when circumstances require that. If you'd like to learn what financial strategy can help you accomplish, email me and we'll coordinate a free, no-strings-attached phone call to explore that possibility.
This article is intended for informational purposes only, and should not be considered financial or legal advice. You should consult a relevant professional before making any major decisions.