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Rate vs Salary

Discussion in 'Mental Health and Social Welfare' started by nealc, Dec 2, 2018.

  1. nealc

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    Hi

    The hourly rate of several private practice psychotherapists in LA is around $160-200+/hour. But when I check the salary range on e.g. indeed, it comes out something like $60/hr.

    In any case, in LA if we just take the hourly rate of $60/hr, and convert to annual at 2000hr/yr, it comes to $120k -- and if we take something like 200/hr it comes to 400k. Assuming you prep for 1 hour per 1 hour of counseling, it's still $200k/yr. But again on indeed and other sites the private practice salary is more like 50-70k.

    So which is it? How come the therapists in my area charge about $180/hr, but the salary on indeed is about $60k/yr?

    Thanks!
    -Neal
     
  2. MAClinician

    MAClinician Masters level clinician
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    2000 hours a year averages to about 40 CLINICAL hours over 48 weeks (taking into account vacation, holiday, sick time). I don’t know anyone who consistently bills 40 hours a week. Most in my area (not West coast) bill between 20-30, even when working full time, to account for no-shows and cancellations. Then you subtract overhead costs (rent, utilities, malpractice insurance, health insurance etc) from your total income. Private practice is NOT the same as 40 hours x hourly rate, like in many other jobs.
     
  3. Salvador

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    because they can and have a niche in their area of private practice
     
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  4. Spydra

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    It is also possible that private psychotherapists don't always charge their stated hourly rate. Some offer a sliding scale to certain types of clients or they may offer a reduced rate for referrals that come from a particular entity.
     
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  5. OP
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    nealc

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    Thanks for the responses..
    MAClinician, thanks for your helpful response, are you saying that most bill around 20-30 because of no-shows and cancellations but otherwise it would be 40? Because again the therapists in LA require 48h notice or they charge for the full appointment. So I'm guessing there's other things that are taking therapists down from 40 to 20-30. Specifically, I would suppose there's a certain amount of therapy preparation/review that happens. Is that as much as 2 hours per 6 clinical hours (making up an 8 hour day which only pays for 6 hours)?

    Paperwork could also take time without pay, but I would suppose it wouldn't take more than about 2-3 hours per week since as far as I know very few insurances cover therapy.

    Googled a little about psychotherapeutic malpractice insurance, looks like it's not a large cost, Hiscox (googled) has a quote of $22.50/mo - supposing that's some minimal policy, still the insurance is probably less than $200/mo
    As you pointed out, rent would also take a chunk of final pay out - I'm guessing $1000/mo would cover a reasonable office.

    So I've got 50 weeks x 5 days x 6 hours = 1500 hours, at say $150 (which is low for any psychotherapist in LA - there's no niche here, and I think the sliding scale is an optional "goodwill" gesture, I think the therapists could fill their week at $150/hr, if they wanted) comes to $225k, with rent an insurance around $15k/yr leaves 210k. Still a huge unexplained gap to the average salary on indeed of 50-70k. The gap is so big that there must be some huge thing that I'm missing - but I can't figure it out - any thoughts?

    Thanks again for the helpful posts.
     
  6. MAClinician

    MAClinician Masters level clinician
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    Basic math review: “average” means somewhere near the middle. So you will have people with salaries below $50K and people with salaries above $70k. The ones below are probably the newer Graduates with less experience and maybe taking less money because not fully licensed. You will have MSW, MFT, LPC, and who knows if you/Indeed are including the PHD/PSYD levels too? There is a variety of “psychotherapist “ out there. Many folks on this forum have also talked about how saturated LA/CA is with that job. More providers than clients, typically.

    Also, as a therapist, you will NOT be working 50 weeks a year. 2 weeks vacation plus 6 major holidays plus any sick days...that’s at least 4 weeks off. More if you include the holidays that not everyone typically gets off, or extra vacation, or attending seminars for CEUs etc. And the therapists and clinicians that I know, don’t schedule 40 hours of clients. That just leads to burn out if done week after week after week. By the 5th or 6th client in a day you start to lose focus and momentum. You also need to consider, in a saturated market, how many of those clients can pay cash only instead of going through insurance.

    You might consider contacting the local professional organization or chapter of providers to request an informational interview to get an idea if what the job prospects look like in LA, if that is where you wish to practice after getting your degree and license. There is likely a chapter or regional group of social workers, LPCs, etc who may be able to connect you with someone who can explain the difference between reported average salaries and hourly rates. Good luck.
     
  7. OP
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    nealc

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    Thanks for your reply MAClinician. I think you pointed out an key question, supply vs demand in LA. From googling around on that, I found:
    • Ben Caldwell on therapist shortage or saturation
    • NYTimes article by Lori Gottlieb about how saturated the LA market is and how much marketing is required
    • Psychotherapy marketing consulting, which helps psychotherapists improve their websites and social media etc.
    So yes, there seems to be a possible saturation problem. I'm totally uninformed about the market - this thread and the articles above are all I know about... but if therapists have open slots, why not lower the rate from $160 to $100? Too much supply and not enough demand would seem to suggest lowering the price, which would bring in more clients and (atleast according to whatever I can remember of economics class) maximize the revenue?
     

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