Sanman

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I'll again point out:

Excluding academia, psychologists in healthcare make money by billable hours X hourly fee. That's it. Cost of living, market saturation, etc have almost nothing to do with the offered salaries.

The mentioned reasons are just strong arm techniques.

Well yes and no.

Billable hours x hourly fee - overhead and expenses

We all make a similar hourly fee from the same payor sources in a given area of practice and the country. Cost of living affects overhead (office space ,etc) and market saturation may dictate how much leverage you have in negotiating percentage with a practice group/director. Less incentive to give you 60-65% of collections if there is a line of people behind you willing to take 50%. You can always set up your own private practice, but that is less feasible in some areas of practice than others.
 

PSYDR

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@Sanman I'm sorry but those are lies we’ve been sold. Some of that stuff is parasite in our field which should face ethic boards.

1) cost of living is not a linear function. A 2BR apartment doesn’t cost double what a 1BR apartment. Commercial rentals also don’t function linearly aside from NNN. Billing staff can easily handle many psychologists, so having one billing person cover 10 psychologists is technically “cheaper” than covering 2. At larger economies of scale, you can purchase commercial real estate under a separate LLC and then rent back to your clinic, which makes you a lot richer.

2) market saturation as business is being used as a lie. In healthcare, the market is how many possible patients are there, how many of those can pay, and how many of those are willing to pay. That’s an easy calculation anyone can do over an easy afternoon using epidemiology stuff and public data.

3) Market saturation for salaries is bs. Say you know exactly how many potential patients who are willing to pay in your area. If you can hire a psychologist at $50k, get him/her to put in $100k in billables, then you yield $50k. The strong incentive would be for you to hire as many psychologists as your geographic area can handle and get stupidly rich in a few years if that’s what they actually believe. But that is not what those employers do for the most part. So those employers are basically saying, “I’m screwing you over, you can take it or I’ll find another sucker.” . It’s justification for screwing people over. You’re right in that it’s commonly accepted.

The real leverage, which I have never met someone gutsy enough to use is to threaten a trade restriction lawsuit in an area with one employer, or file a board complaint in a states that use the apa ethical code in their practice acts using the financial exploitation clause. Maybe that’s a potential hobby in my retirement.

In my book, employers negotiation for stupidly low salaries for their employees is likely to drive down incomes in the future, and therefore a short sighted business move. Same as the idiots who are still practicing at 70.
 
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Psycycle

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@Sanman I'm sorry but those are lies we’ve been sold. Some of that stuff is parasite in our field which should face ethic boards.

1) cost of living is not a linear function. A 2BR apartment doesn’t cost double what a 1BR apartment. Commercial rentals also don’t function linearly aside from NNN. Billing staff can easily handle many psychologists, so having one billing person cover 10 psychologists is technically “cheaper” than covering 2. At larger economies of scale, you can purchase commercial real estate under a separate LLC and then rent back to your clinic, which makes you a lot richer.

2) market saturation as business is being used as a lie. In healthcare, the market is how many possible patients are there, how many of those can pay, and how many of those are willing to pay. That’s an easy calculation anyone can do over an easy afternoon using epidemiology stuff and public data.

3) Market saturation for salaries is bs. Say you know exactly how many potential patients who are willing to pay in your area. If you can hire a psychologist at $50k, get him/her to put in $100k in billables, then you yield $50k. The strong incentive would be for you to hire as many psychologists as your geographic area can handle and get stupidly rich in a few years if that’s what they actually believe. But that is not what those employers do for the most part. So those employers are basically saying, “I’m screwing you over, you can take it or I’ll find another sucker.” . It’s justification for screwing people over. You’re right in that it’s commonly accepted.

The real leverage, which I have never met someone gutsy enough to use is to threaten a trade restriction lawsuit in an area with one employer, or file a board complaint in a states that use the apa ethical code in their practice acts using the financial exploitation clause. Maybe that’s a potential hobby in my retirement.

In my book, employers negotiation for stupidly low salaries for their employees is likely to drive down incomes in the future, and therefore a short sighted business move. Same as the idiots who are still practicing at 70.
You had me until the idiots practicing at 70. Is that due to driving general incomes down?
I know a fair number of people practicing at 70, partially because it keeps them vital, engaged, and so on.
 
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Sanman

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@Sanman I'm sorry but those are lies we’ve been sold. Some of that stuff is parasite in our field which should face ethic boards.

1) cost of living is not a linear function. A 2BR apartment doesn’t cost double what a 1BR apartment. Commercial rentals also don’t function linearly aside from NNN. Billing staff can easily handle many psychologists, so having one billing person cover 10 psychologists is technically “cheaper” than covering 2. At larger economies of scale, you can purchase commercial real estate under a separate LLC and then rent back to your clinic, which makes you a lot richer.

2) market saturation as business is being used as a lie. In healthcare, the market is how many possible patients are there, how many of those can pay, and how many of those are willing to pay. That’s an easy calculation anyone can do over an easy afternoon using epidemiology stuff and public data.

3) Market saturation for salaries is bs. Say you know exactly how many potential patients who are willing to pay in your area. If you can hire a psychologist at $50k, get him/her to put in $100k in billables, then you yield $50k. The strong incentive would be for you to hire as many psychologists as your geographic area can handle and get stupidly rich in a few years if that’s what they actually believe. But that is not what those employers do for the most part. So those employers are basically saying, “I’m screwing you over, you can take it or I’ll find another sucker.” . It’s justification for screwing people over. You’re right in that it’s commonly accepted.

The real leverage, which I have never met someone gutsy enough to use is to threaten a trade restriction lawsuit in an area with one employer, or file a board complaint in a states that use the apa ethical code in their practice acts using the financial exploitation clause. Maybe that’s a potential hobby in my retirement.

In my book, employers negotiation for stupidly low salaries for their employees is likely to drive down incomes in the future, and therefore a short sighted business move. Same as the idiots who are still practicing at 70.

1. Agreed that it is not a linear function. However, it is a function of geography. Overhead in San Francisco or New York is different from overhead in Kansas City or even Austin. Similar, billing overhead for a small group is likely higher than a larger group because economies of scale. I agree that business owners often overstate these numbers to try and screw employees.

2&3. Market saturation is bad reason to accept a lower salary, we agree on this That said, it does make it more difficult to negotiate for a job. This is especially true for early career people. As for hing people for cheap. I can name a very large behavioral health company that hires for $80-85k + mediocre to poor benefits and requires $160k+ in billable hours annually (12-16 patients a day) or ~$20-35/billable session on contract. They are minting money hand over fist and lots of people are getting screwed in our field because of it. They also advertise like crazy, because many people quickly bail on them. These are the adds many people see.

This is compounded by the number of PsyD programs that pump out people with huge loans. You get 6 months to make money and start paying those loans back. So, many take a bad deal to get steady cash rolling in their pocket and make those payments. The psychologist cycle of poverty. At the end of the day all employment in the private sector is based on the idea that you create more value than you are paid for, the question is how much is fair for your company to keep.
 

Sanman

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You had me until the idiots practicing at 70. Is that due to driving general incomes down?
I know a fair number of people practicing at 70, partially because it keeps them vital, engaged, and so on.

There are those that want to work at 70 and those that NEED to work at 70 due to financial circumstances. I plan to be in the former category. Someone shoot me if I am in the latter category, though I know a lot of people like this. Often, physicians that lived above their means and never said "No" to their kids or spouse.
 

foreverbull

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@Sanman I'm sorry but those are lies we’ve been sold. Some of that stuff is parasite in our field which should face ethic boards.

1) cost of living is not a linear function. A 2BR apartment doesn’t cost double what a 1BR apartment. Commercial rentals also don’t function linearly aside from NNN. Billing staff can easily handle many psychologists, so having one billing person cover 10 psychologists is technically “cheaper” than covering 2. At larger economies of scale, you can purchase commercial real estate under a separate LLC and then rent back to your clinic, which makes you a lot richer.

2) market saturation as business is being used as a lie. In healthcare, the market is how many possible patients are there, how many of those can pay, and how many of those are willing to pay. That’s an easy calculation anyone can do over an easy afternoon using epidemiology stuff and public data.

3) Market saturation for salaries is bs. Say you know exactly how many potential patients who are willing to pay in your area. If you can hire a psychologist at $50k, get him/her to put in $100k in billables, then you yield $50k. The strong incentive would be for you to hire as many psychologists as your geographic area can handle and get stupidly rich in a few years if that’s what they actually believe. But that is not what those employers do for the most part. So those employers are basically saying, “I’m screwing you over, you can take it or I’ll find another sucker.” . It’s justification for screwing people over. You’re right in that it’s commonly accepted.

The real leverage, which I have never met someone gutsy enough to use is to threaten a trade restriction lawsuit in an area with one employer, or file a board complaint in a states that use the apa ethical code in their practice acts using the financial exploitation clause. Maybe that’s a potential hobby in my retirement.

In my book, employers negotiation for stupidly low salaries for their employees is likely to drive down incomes in the future, and therefore a short sighted business move. Same as the idiots who are still practicing at 70.
I think what you're also saying is that we vastly undervalue our clinical work in our field; society and healthcare encourage this. I don't see APA heavily lobbying managed care companies to reimburse psychologists at a better rate rather than the peanuts rate of $75-$90/hour for a private practitioner having to paying his/her/their own business expenses. I have to admit, I haven't been keeping up with APA these days...maybe they are to some extent and I don't hear about it?

I agree with much of what you are saying, but it's tricky. Who wants to be that guinea pig early career psychologist who says "no, I won't take under $75K starting out because I value my work more than this?" I literally got laughed at during a postdoc interview when I said my ideal pay was $75K (after postdoc)! Not sure if it matters that it was a psychiatrist who laughed at me, but it happened. Then I was offered a postdoc there that was vastly underpaid.

The reality is, psychologists would have to refuse work over and over until they found a position that paid them what they're worth. In order to do that, that requires income privilege to some extent because the person has to rely on someone else to cover the bills while the person is interviewing and setting this standard that may be seen as unrealistic to some employers. Meanwhile, psychologists who are newly-licensed and desperate for income will take the lower pay because they cant' afford to be unemployed for long. I suppose this would work if every single early career psychologist banded together and said "we will not take lower pay" and everyone refused job offers under 75K, but how realistic is this if people need income to survive? We would need a union-level of organization or something on a larger scale.

So the real question is: is this a bottom-up approach (psychologists refusing lower pay and possibly sacrificing career for awhile) or a top-down (address the system from the point of society and/or APA doing more heavy lobbying for fair pay)? Or both?

EDIT: Given that some of the research out there doesn't support doctoral-level training for clinical work being superior to master's-level training (don't recall who in this forum mentioned this awhile ago, but I reviewed some of the research and it seems to be a valid concern), how can we justify starting out at 20-30K higher than master's level folks? Just to throw another wrench into the mix....
 
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PSYDR

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@Psycycle

If one accepts the excess of labor explanation for why salaries are low, then it is unfair to only consider the ecps or psyds. There’s a lot of mention of the number entering the field. There’s not a lot of people mentioning the people not retiring. It’s intellectually dishonest to point the blame at inflow but ignoring outflow. If you reference the raw data in the wais/wms or whatever, you’ll notice a decline in mental acuity on average. Both ethical and licensed Professional activity is focused upon safety and ability; not desire. If a dept head works until 80, he/she is putting his/her desires over the rest of the staffs potential desire to move up. Thats unacceptable in my book. It’s doubly unacceptable if that’s motivated by their own mistakes such as failing to save for retirement or development of other social supports.

@Sanman I totally understand that loans and poor planning cause people to accept bad deals.

@foreverbull i totally agree. It would likely take someone with resources and gonads of steel. Or just a change in culture with ecps immediately filing ethical complaints and/or board complaints against any psychologist that offered financially exploitative compensation. I doubt the apa will do much. I don’t know what the answers are. I do know that accepting the lies won’t change anything.
 
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i totally agree. It would likely take someone with resources and gonads of steel.
You Psychologists with your hypothetical constructs used to explain behaivor;)
It would also take training and experience in how negotiate for what your worth (as well as actually know what you are worth). IME, this is not a topic of thorough discussion or education in your typical graduate school programs. Who would teach it? TT faculty operate on a different set of contingencies than applied psychologists and typically don't have the experience or expertise to teach such things.
 

PSYDR

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I'd encourage any psychologist to look up the hourly rate for ER physicians and then the annual salary.


@ClinicalABA I could teach a course in this. So could you. We'd have to negotiate what terms to use. Like you'd get me to not use metaphors; and I'd get you to use "US Dollars" instead of "johnny cakes". I bring this stuff up a lot, because it benefits all of us, including me.
 

Sanman

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I'd encourage any psychologist to look up the hourly rate for ER physicians and then the annual salary.


@ClinicalABA I could teach a course in this. So could you. We'd have to negotiate what terms to use. Like you'd get me to not use metaphors; and I'd get you to use "US Dollars" instead of "johnny cakes". I bring this stuff up a lot, because it benefits all of us, including me.

Why ER physicians? I feel like that is a poor comparison There are facility fees that allow a hospital system to make much larger amounts on them. Peds or IM seem more analagous and still make a lot more than us in annual compensation with a closer hourly wage.
 
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I could teach a course in this. So could you. We'd have to negotiate what terms to use. Like you'd get me to not use metaphors; and I'd get you to use "US Dollars" instead of "johnny cakes". I bring this stuff up a lot, because it benefits all of us, including me.
Johnny cakes?!? It's apple cider donuts out her in the Wild West(ern Mass).
I actually did get to teach some of this stuff in an OBM (organizational behavior management) class, but that was in an ABA graduate program. Not coincidentally, ABA practitioner have better legislation, similar hourly rates to some of the lower therapy codes, MANY more hours per week per client, and relatively high starting salaries, relative to amount of schooling. It's amazing what happens when you do a good job of clearly defining the scope of your field, limit it to what has been clearly shown to be effective, and have a clear plan for professional advocacy at the local, regional, and national level.
 
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