It's become very difficult to survive in a typical private practice as a professional counselor. With health costs rising in all other fields, mental health reimbursement has remained about the same, and even decreased in some instances! Why is this? Why are mental health professionals the only ones in the health profession struggling to receive appropriate compensation?
These are questions I don't have an answer to, but one of my assumptions is due to the counselors desire to help outweighing the desire to run a functional business. Let's do some simple math (this is based in Texas where I live):
General Monthly Costs:
Phone and Internet Service- $100
Copy machine and paper: $100
Grand Total: $1200 in general expenses
We're not done with the costs yet, but let's look at what your potential monthly income:
Let's say you schedule and average of 35 clients per week (I won't even discuss the time it takes to establish a practice and build up to this amount of referrals) . In Texas, an average amount billed for a counseling session might be $65 per hour session.
35 Clients X $65 per session=
$2275 per week
$9100 per month. Not bad right? That's over $100,000 per year.
But wait, let's go back to expenses:
Subtract from gross income-
$1200 in general expenses
credit card transaction fees (2% of your credit card payments) could be a cost of $160
Insurance Billing Specialist- $1365 (15% of $9100. This assumes you are only billing insurance. Private pay clients would not cause a loss of income for billing)
Now, you can do you own billing and reduce this cost, but prepare to spend quite a bit of time reconciling your books. This typically means you won't have the time to see as many clients, or you will be working 50-60 hours per week.
After these expenses, your net income is: $6375.
But, this is gross income. Operating a private practice means you owe the government 30% (which is why you write off as many expenses as possible). 30% of $6375 is $1912.50.
After taxes, your net income (or take home pay) is
If you are paying for your own health insurance and retirement, reduce this number even further based on current insurance costs.
Keep in mind, these numbers are based in 35 clients per week at $65 per session. This doesn't include "no shows" which you won't be paid for. This also doesn't include a bunch of general expenses that we ddn't cover in this article.