Want to Augment Your Practice with Passive Income Online? Part I

Fee-for-Service The predominant income-generating model for the average clinician is the fee-for-service model.  You make your money by providing a service.  If illness or injury strikes or you take a vacation, income stops until you get back.  All income generated depends on the presence of the clinician and his or her ability to actively deliver a service.  If you look at the average solo practice from a risk assessment standpoint, it’s easy to see that the level of risk is quite high. Sources of IncomeHaving multiple sources of income is an important aspect of sustaining the financial health of your private practice. In the same way that you would not want all your referrals coming from just one source, it is important to diversify your sources of income. One viable income stream that many clinicians have never considered is passive income. Unlike the fee-for-service model, passive income generation does not require your constant presence and active participation. A familiar example of passive income is the interest you earn from investments.  The prospect of earning a substantial income through the development of self-help materials for online consumers and training for professionals is gaining momentum, particularly as the income of healthcare professionals continue to decline. Year after year, most of us have witnessed reimbursement rates get systemmatically reduced as third party payers ratchet down our fees. Most practitioners have responded to these “pay cuts” by managing overhead and increasing their client load. Upcoming changes in healthcare will further shift the landscape, making it even more difficult for solo practitioners to survive as care becomes more centralized around hospitals and large, specialized group practices. Thinking Ahead Most practitioners have never been trained to think strategically about their practices. As a matter of fact, among mental health professionals, it is often taboo to discuss the financial aspects of running a business. Yet, as a small business, private practitioners face challenges in the upcoming  healthcare environment that threaten their very survival. Having some way to respond to increased financial pressures is imperative and thinking ahead to find ways of earning a profit from knowing how to evaluate research, organize information, conceptualize in images and write arte skills that can be put to creative use in self-help product development and delivery. What Exactly are We Talking About? In the realm of private practice, passive income generation can occur through some of the following channels:

  • Writing an eBook that then sells on Amazon, Barnes & Noble, or your own website
  • Developing a “Continuity program” that sells chapter of your ebook by email to recipients who join your website, where they form a community to discuss your program topics
  • Developing CD’s and DVD’s of the same content for sale through your website
  • Selling different formats of the same content for people using the Kindle, Nook, or other eReading device
  • Converting written content into an audio book and selling them through various marketing channels online
  • Joining an affiliate program and marketing someone else’s program for a profit

What about Webinars and Apps? While some people can be successful at making a profit from creating and selling “apps” or webinars, they are the exception to the rule. These forms of technology are very well suited for marketing any of the products above, however. Creatively leveraging the tremendous knowledge base you possess is the key to enhancing financial security.  The Internet is a huge market largely untapped by mental health professionals.  Most self-help material on the Internet is not developed by clinicians and varies tremendously in its quality and accuracy.  When trained professionals disseminate high quality, research-based products, everyone benefits.  In the next three articles we will look more closely at three ways of generating passive income: ebooks, audio books, and affiliate programs.

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