Making Money as A Psychologist

This forum made possible through the generous support of SDN members, donors, and sponsors. Thank you.
I am not advocating a 'bottom line' approach to practice, and not just because that approach has proven to come with some significant threats to long-term viability. I am just trying to balance the, "I want to help people!!" haze that tends to pervade private practice work and lead people to make wholy bad decisions about how to run their practice. We are highly educated professionals who provide a value service to our patients, but we often treat ourselves like 2nd class professionals. Plumbers, lawyers, accountants, and the like all provide valuable service to their customers, but because we are in a helping profession we are treated differently. We allow ourselves to be treated differently. I swear I am not a heartless guy, if I were I would have opened up a Cash-For-Gold/Cash Advance storefront and called it a day. Those things are goldmines, if you can look past the predatory practices. I am not advocating that approach. I am just trying to remind people that private practice is a business.

Absolutely,and I think a lot of people run successful practices as a business. Of course, rational business decision-making is partly to blame for our field's financial predicament though. I don't blame people for getting ahead where they can, because it is perfectly legal and why not?

But, now we have further declining rates for therapy and people in other fields administering our assessments. I mean, if a bachelors level person can do it, why can't a speech/language pathologist or vocational therapist?

To use neuropsych as an example, let's be honest: We've all seen people essentially take a dump on a few pieces of paper, write "neuropsychological assessment" on it, and charge $3000 dollars for it. We also have created a model where many of the "attendings" spend less than five minutes with a patient and have trainees do the rest, all while billing out for top dollar. I am not surprised that insurance companies don't want to reimburse with the frequency that I encounter it doing chart reviews, and I doubt that high cash fees will remain an option forever either without better quality control.

That quality control begins with individuals managing their practices, and I am sure that the business side of things will get in the way of quality control all to often. I don't expect people to do the right thing.

I suppose my problem would be with someone say, beating the drum against mid-level encroachment, and then turning around and hiring a bunch of master's level clinicians at their private practice. Do as I say and not as I do...and TBH, I think that has been the case far too often here in this field. By the time people pay their dues and do get established, they figure they've earned it at this point and it is okay to cut corners/hire cheaper staff/etc.

Edit: Not saying that everyone practices that way, but I have observed it plenty. I think part of my wariness about private practioners in general is the fact that I see the most crap come out of private practice. It is too unregulated.

Members don't see this ad.
 
I am not advocating a 'bottom line' approach to practice, and not just because that approach has proven to come with some significant threats to long-term viability. I am just trying to balance the, "I want to help people!!" haze that tends to pervade private practice work and lead people to make wholy bad decisions about how to run their practice. Running a successful practice will allow for clinicians to eat a couple of extra hours in a case that needs it, but not have that decision take food off of your own table at night.

I guess we have had different experiences with people going into private practice. The bleeding hearts that I know all want to serve the underserved in community mental health or through an agency. The people I know who have gone into private practice are the ones who talk about making the most money possible. Just my own experience.
 
I suppose my problem would be with someone say, beating the drum against mid-level encroachment, and then turning around and hiring a bunch of master's level clinicians at their private practice. Do as I say and not as I do...and TBH, I think that has been the case far too often here in this field. By the time people pay their dues and do get established, they figure they've earned it at this point and it is okay to cut corners/hire cheaper staff/etc.

There are large differences between being against independant practice of non-doctorally trained & non-fellowship trained mid-levels.....and hiring a mid-level clinicians to work in your private practice. The latter allows for oversight and supervision (if appropriate...like in the case of neuropsych assessment). It is also worth noting that there are large differences in the responsibility and liability between hiring employees v. independant contractors. The business model is also quite different.
 
Members don't see this ad :)
There are large differences between being against independant practice of non-doctorally trained & non-fellowship trained mid-levels.....and hiring a mid-level clinicians to work in your private practice. The latter allows for oversight and supervision (if appropriate...like in the case of neuropsych assessment). It is also worth noting that there are large differences in the responsibility and liability between hiring employees v. independant contractors. The business model is also quite different.

Well if you are training people, that is one thing. If you are contracting with master's level clinicians who operate independently and give you a cut, that's another. And let's be honest here too - if you are going to run a training program effectively, it isn't going to be profitable. You need to budget time for supervision, didactics, etc...all I ever hear is people complain about lost billable time when they are training people. Now, if you are "training" people by having them do your work, not really supervising them, and not providing didactic experiences in your private practice that would come naturally at an institution, then sure, it could be profitable (but questionable ethically).

Personally, I find the assessment training model and finances associated with it to be highly suspect, but I am feeling too cynical this Friday morning and might be in a better mood after lunch :smuggrin:
 
Pragma, if you can name your top three main problems (changes you would like to see), what would they be?
 
Changes in what?

Any area. I'm just somewhat puzzled by all the pessimistic views. And I'd like to see what the main concerns are overall. I don't know if people are frustrated on a personal level or if there are some greater systemic issues.
 
Last edited:
Any area. I'm just somewhat puzzled by all the pessimistic views. And I'd like to see what the main concerns are overall. I don't know if people are frustrated on a personal level or if there are some greater systematic issues.

Specificity would help. Yes, the biggest issues facing psychology and our overall financial viability are systemic ones, and I doubt most would disagree there. I happen to think some of those systemic problems are internal to the profession, and have a jaded perspective towards how private practice works for people who do end up becoming very high earners. Not because I ever did any private practice myself or got burned by anyone, but because of the presence of financial models that are not favorable for providers.

Hence my lack of agreeableness in this thread, but also my level of interest to learn more since some people here have indicated that they have thriving models. I just want to know how it is done, because usually something has got to give cost-wise to run a successful business. Some people are out there making a lot of money (probably more than they should be), and many are out there making less than they probably should. I am interested in understanding why and how things might be more fair.

But, I've wasted too much time on this thread, especially since I don't want to do any private practice work.
 
Last edited:
At the end of the day it is knowing how to run a business and make the needed adjustments to maximize $$ within whatever industry you work. You can employ wholy mediocre therapists and be very successful. I'd prefer to employ people who are great at their jobs, but that (sadly) isn't a pre-requisite for being successful.

Nope it isn't, but it does make making a profit easier. Creating a corporate culture that fosters excellence will help take lesser employees to a different level. It allows you to take any employee and have them perform at their personal best. It's setting expectations and standards that not only hold individuals accountable but also empowers them to take control. Some people may never be appropriate for your clinic, but most minimally competent employees appreciate clear structure that allows them to perform at their best. It's not easy to run a business but initial values and structure create a personality to the business that is resistant to change later on, for good or bad.
 
Creating a corporate culture that fosters excellence will help take lesser employees to a different level. It allows you to take any employee and have them perform at their personal best. It's setting expectations and standards that not only hold individuals accountable but also empowers them to take control.

Depending on the skillset require to fill the position....I think this can be very applicable. There has been some good work/research done in the past 10-15 years looking at both corporate culture and personality style for a variety of different industries and job types. I think the biggest challenge facing a multi-clinician private practice (ownership or partnership) is understanding the different motivational factors at play.

A lot of my former career was spent helping people do what they do better. I typically worked with upper-management to work out solutions, but that was highly dependant on them sticking to the plan. The challenge was that even though you had highly involved folks, the commitment was quite varied. It is hard to run a business when you are the only committed person...but that is often the case in PP.

I used to use the breakfast analogy to explain the difference between employees/management (involved) and ownership (committed): When you make breakfast....the chicken is involved, but the pig is committed. I needed committed folks, but the vast majority were merely involved. In PP you need to figure this kind of stuff out...and then work your butt off to find employees that fit.
 
At the end of the day it is knowing how to run a business and make the needed adjustments to maximize $$ within whatever industry you work. You can employ wholy mediocre therapists and be very successful. I'd prefer to employ people who are great at their jobs, but that (sadly) isn't a pre-requisite for being successful.

Do you think part of maximizing $$ within this industry necessarily means employing wholly mediocre therapists? Are you basically cutting into your own profit by choosing great people? Ideally clients would be able to ferret out sub-par practitioners and they would either have to come up to par or go out of business but somehow legions of mediocre providers persist.
 
Do you think part of maximizing $$ within this industry necessarily means employing wholly mediocre therapists? Are you basically cutting into your own profit by choosing great people? Ideally clients would be able to ferret out sub-par practitioners and they would either have to come up to par or go out of business but somehow legions of mediocre providers persist.

I would think that the business model plays into it. Getting 30% of the overhead from a quality provider might be better than 50% from a below par provider in real money terms. If the former brings in $120,000 in billables and the latter brings in $60,000 in billables, the former is still making you $6000 more annually while making significantly more than the poorer provider. There are plenty of people in this field that would happily give up a percentage of billables to not deal with the business end of the practice and cover overhead as long as they can keep more autonomy in what clients to see, hours to keep, etc.
 
bump to see if this generates more discussion
 
Top