In the mental health field, the idea of solo private practice can be alluring. Creating your own business, having full control, and keeping all the profits sounds enticing. But is it really the best path for therapists, both financially and professionally?
At Psych Lab, we offer a collaborative team dynamic, comprehensive administrative support, and a solid pay structure with ample benefits. We provide a balance between the schedule flexibility of independent practice and the financial stability of an agency setting. In the end, what we offer usually works out to be a better deal than running a solo practice or working as an independent contractor.
Let's talk numbers. At Psych Lab, a licensed therapist earns an average of $65 per clinical hour — or $85,000 per year for 25 weekly therapy hours with just under 3 weeks of paid time off. You'll know exactly what you're taking home and how much time you're investing. In a solo practice or as a 1099 independent contractor, the picture can look very different.
In solo practice, you'll spend a very significant amount of time running the business:
These tasks reduce the independent practitioner's real hourly rate, often by as much as half.
Plus, it can take a long time to build up a referral network, leaving many solo practitioners financially stressed with no clear path forward. In the current economic climate, even established practices struggle to fill their caseloads with private pay clients.
Self-employed therapists and independent contractors are responsible for paying their own employment taxes. This increases the amount of tax owed each year by as much as 50%, further reducing overall take-home pay.
When you work as a W-2 employee in a group practice, this cost is eliminated since it's paid by the employer.
Independent practitioners must cover the costs of health insurance, dental and vision care, and retirement savings on their own. There's no paid time off: no paid vacations, sick leave, or unemployment insurance to cover you if you're unable to work.
At Psych Lab, we provide a complete benefits package including paid vacation and sick time; medical, dental, and vision benefits; a 401k with match; and protection against unforeseen circumstances that may prevent you from working.
These factors generally negate the apparent financial advantages of working for yourself. Consider starting a solo private practice, supplementing private pay referrals with insurance clients through a contracting service. The average reimbursement rate per session is around $120, which sounds great! Who wouldn't want to earn $120 per hour?
However, of that rate:
Additionally, 30% or more of the therapist's time will be spent on non-billable activities.
Consequently, the effective hourly rate is only about ⅓ of what it first appears — meaning the independent practitioner seemingly earning $120 per hour is actually earning just $50 per hour. This is much less competitive in an apples-to-apples comparison, and offers none of the personal advantages of working in a group practice.
Lastly, practitioners who choose not to accept insurance can potentially earn a higher fee per clinical hour, but can expect to spend much more of their time in marketing activities and have a tougher time keeping a full caseload — negating the financial benefit.
Beyond the financial implications, there are significant personal benefits to consider as well.
The professional isolation and emotional drain of solo practice can be stifling. You spend your workweek interacting only with clients, often dealing with difficult emotions and interpersonal dynamics. Without a team, you lack a supportive network for debriefing and consultation. Our group practice fosters a collaborative team dynamic, with weekly case consultation and study groups. This provides a strong support network, preventing burnout and promoting professional growth.
Being part of a team provides opportunities for ongoing learning and professional development. This not only leads to richer perspective and better clinical practice but also makes the work more interesting. By focusing on your growth as a therapist, the work continues to feel fresh and avoids stagnation. Therapists in group practice have an easier time remaining attuned to the variety and nuance our clients offer. Additionally, we provide opportunities for career growth into supervisory roles.
While running a solo therapy practice or working as an independent contractor may seem attractive on the surface, the financial advantages hardly ever work out in the therapist's favor. The administrative and marketing aspects of running a business take a lot of energy away from doing the work you're passionate about and developing your skill as a therapist. In most cases, a group practice like Psych Lab offers not only a healthier and more comfortable working environment but also a better financial deal, allowing therapists to focus on their passion and grow professionally.
Provides psychological assessment & treatment planning. Specialties in complex trauma, psychanalytic therapy, and clinical hypnosis.
Manages facilities, hiring, patient census, chart audits, and runs our weekly Monday staff meeting!
Helps keep billing & insurance authorizations on track.
Helps people work through trauma, identity issues, & tough life transitions.
Expert in military and sexual trauma, psychosis, and supporting folks along the spectrum of gender and sexuality.
Skilled in working with complex trauma, severe & chronic mental illness, autism, and ADHD.
Experienced with trauma, disabilities, chronic pain, domestic violence, and relationship problems.
Focused on healing trauma and social anxiety, and facilitating personal growth.
Helps people regain hope in spite of the most difficult circumstances.
Helps people learn to value themselves & their experiences.
Promotes mindful living, self-compassion, and emotional resilience.
Specializes in helping people work through grief and trauma.
Focuses on psychodynamic approaches for deep healing.
Experienced with DBT and attachment-based approaches to trauma and addiction.