Overview
On April 5, we spoke to a psychologist and current private practice owner in the Mountain Region who worked for LifeStance (LFST) in both a clinical and administrative capacity throughout much of the pandemic (resigned mid-year 2021 and is >6 months removed). Similar to Field Notes I Behavioral & Mental Health I Is LifeStance (LFST) Being Real? Moving to Short Bench (4/1), we heard negative feedback from a recent former that chose to start an independent practice after leaving. It sounds like the cost to start a new practice is lower than we thought, and LFST is likely to face margin pressure due to the higher wages needed to attract and retain talent. While our contact said that younger clinicians are willing to stay with LFST longer, this interview reinforced our concerns about organic versus acquired headcount growth and overall clinician churn.
As always, if you have questions or feedback: .
Highlights
- Demand is high and it is as easy as it's ever been to set up a practice and start hiring clinicians, including NPs and therapists; our contact said, "I'm currently reviewing 49 solid applications, many former and current LifeStance"
- Generally speaking, LFST's systems and processes weren't sufficient to support the rapid hiring in the region, which led to frustration and attrition
- Our contact thinks LFST may need to, if it hasn't already, increase compensation for new hires and to retain talent to be more competitive
- Tele-behavioral health will be the dominant visit type, but having an office makes sense for infrequent but necessary in-person visits (if patients are asked, they almost always prefer/choose a virtual visit)
Call Notes
Edited lightly for length and clarity.
Background: Our contact is presently running a private practice and spends ~50% of the week seeing patients (80% adult, 20% child therapy; a mix of psychotherapy and medication management), and the other 50% is administrative work to hire a team and build a larger practice group that'll eventually be multi-state in the Mountain Region. Like our most recent discussion, the practice is 100% virtual. Also, all visits are paid in advance (credit card or FSA/HSA card); however, he is in-network with several payers. Experience includes LFST, inpatient psych, and independent practice (>10 years in practice).
So, you were with LifeStance for a while during the pandemic but left - tell us about your time there.
- Yes. I joined LFST during the pandemic to do telehealth but ended up in management/doing a lot of administrative work. Communication ended up being a problem. I didn't feel like corporate wanted to listen, whether it was suggestions about guidelines, standards of care, or other items. It felt like they restructured things 3x while I was there. Not really sure why. There were several operational and payroll issues - the latter frustrated many. Also, the org structure wasn't clear.
- There wasn't enough support or supervision.
How should the process work? You see a patient now vs. then, what's the difference? And is the split - what the practice gets vs. the clinician - different?
- With my company now, I take payment upfront. I am in network with insurers, but we just provide the patients with the bill/detail, and we pay enough, in my opinion, for [clinicians] to stay here long-term.
- A problem at LFST is they only get the amount insurance pays, and they take a percentage to provide benefits, etc. and clinicians only end up getting ~60%... I don't know if that's changed, but take a state like Colorado, for example: if LFST were keeping 30%-40%, it ends up not being comparable to other settings.
- Telehealth is lower than in-person too - say the average is $180/hr. or $250/hr. for adults and children, respectively; I'm charging $200/hr. and $300/hr., respectively, and I'm willing to give the clinician 80%.
- Rates vary state-by-state, but I think that's a better split and will keep people loyal, keep them from leaving. They might need to pay people more.
So did LFST buy your practice, or did you just join them? How did the staff change?
- No, they bought another practice, I joined and ended up overseeing a 10-fold increase in NPs (to 30+).
- Did everyone stay? If so, why? In my opinion, the reason people stay on with LFST, even though they are paid relatively little (e.g., ~$60k or so in the end) is loyalty to the job and patients. Also, younger clinicians that are right out of school/fellowship are more likely to stay because of that loyalty and it being their first job.
- the payroll and communication issues led a lot of people to leave - not sure how many. But I think a lot of people getting paid $60k/yr. could have been getting $120k - $150k per year.
OK, how have you found hiring?
- 5 people hired in the last two weeks... I've got 49 other applications to go through right now. Many former or current LifeStance.
- I offer benefits, but most applicants don't need them (spouses/partners often have benefits, for example).
How are you working with insurance?
- There are firms out there that help (like a Headway), but being in-network is easy w/ exception of Medicaid. With Medicaid, it's illegal to see patients unless you're credentialed with them and it's sad because some kids can't see anyone else. Larger hospitals can have long waiting lists (up to one year). Those patients can't see whoever they want.
- My office manager just bills upfront w/ HSA or a credit card and patients take care of it themselves... 99% of people pay, and the amount they get back varies too widely for me to give you a number. A lot have HDHPs.
Do you have any sense - we have UnitedHealth-Oxford - of the PPO rate? What would you get if you were in-network?
- Directly, 90792, depends on what you're billing... that would probably be $80-$90 for 30 minutes of adjustment management.
- Add on psychotherapy, 45-min, interactive complexity, it increases the amount. It's still less than what I charge, but I can charge more because of demand and I want people to stay with the practice and people appreciate being able to stay with the same clinician.
- How important are the relationships? Very. I've worked with some patients for many, many years and have seen them grow up.
LifeStance said they are data-driven treatment, progression, outcomes are there, etc. but based on what you're saying and we've heard recently, it doesn't seem super organized and there are a lot of retention questions. Is there a base layer of people that don't leave... maybe 5% attrition? And then is the acquisition side a culture clash every time?
- I think it varies based on the states. They can buy out groups to enter states - are they run by clinicians or non-physicians? That matters.
- It makes sense to think about a corporate group standardizing care nationally, but it was disorganization. They were/are trying to create a unified thing, but it's not there, yet. And within each state you've got variation.
- The benefits for new grads to have a salary, NPs or senior may not have had a salary, and comp is based on visits. So, if it's visit volume and based on how much you reimbursed, you can see why people would leave. Many of the NPs are mission-driven though.
- Do you think a national brand can work? Yes, it just needs to work correctly. I don't think you can treat everyone the same - there must be flexibility to follow standard of care for each issue and be paid appropriately.
How did COVID change reimbursement and the environment? Pre-COVID vs. post-COVID... new patients and inquiries to your practice? The demand seems exceptionally high...
- I haven't had any problems. I've been doing telepsychiatry for almost a decade. It's not new, so when COVID happened, it was easy for me.
- New grads probably need to see people in person to gain experience. That's an issue.
- There are no complaints from patients about tele-psych.
If you hire a new therapist - intake and growth of practice - how long to fill his/her schedule and become productive?
- It really depends. When I left LifeStance, and I think this is true broadly, if there are patients nobody else can see they can switch easily (aside from the credentialing for Medicaid, which can take 6 mos. to a year).
- So, here, someone can have a full schedule almost immediately. I've spoken with some applicants that have a newborn and want to work part time.
- Full varies. They might be fine with the 80% split and/or figuring out how to make $300/day - that's full for them vs. dealing with up to 10-15 patients per day (that's a full schedule for a therapist/NP and is tough).
What's the right mix of virtual and in-person?
- I think we must plan for having an office and telehealth long term. You have the office in case patients have connection issues or something that requires an in-person visit. I don't want patients coming to my home, but I don't think we'll ever need a lot of offices.
- I ask my patients - for psychotherapy, would you prefer office-based vs. virtual and most people say virtual because they are working. It's hard to give a mix because the convenience of virtual is big for a 45-min appointment, and I don't know how this will evolve.
- Also, some people still don't want their employers to know - in-person is harder w/ work schedule.
Thoughts on app-based behavioral - Cerebral, BetterHelp, others? Wondering if you see those as drawing talent or good models?
- The main draw is a culture of collaboration and support. Cerebral comes up a lot.
- The problem - those are about venting vs. making progressive changes... they are not, in my opinion, evidence-based models... they aren't comparable.
We've heard that before... out of curiosity, do your peers in the region share your view of LifeStance?
- I think so – I know some NPs that I was working with do.
- I worked there through COVID and thought about it a lot - as soon as I could start my own practice, I did.
It sounds like it's easy to get set up and spin up a practice - do you see a lot more people setting up their own?
- Definitely. Yes - it's so easy. I think it’s a trend now.
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Thomas Tobin
Managing Director
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