Private Practice Success Newsletter

April 2006, by Lynn Grodzki, LCSW, MCC (Master Certified Coach)
www.privatepracticesuccess.com

Dollars and Sense

This January, the Psychotherapy Finances Newsletter published its latest survey on income levels. This is the Psychotherapy Finances’ 12th financial survey, since 1979, of psychologists, social workers, marriage and family therapists, and licensed professional counselors who work in the US.

I need to tell you that after reading the survey, the news is not good.

Since 2000, incomes of all of the above are declining. For those who work outside of managed care, the number of self-pay clients is eroding. For those who participate with managed care, fees are flat or going down. Overall, the survey reports that even the incomes of those at the top of the survey, the psychologists, are not keeping pace with inflation.

When I mention this survey to therapists, the response I get is: “You mean it’s not just me? I didn’t know that this was industry-wide. I thought the fact that my income was down was a reflection on my lack of skill or lack of business sense. I didn’t realize this is part of an overall trend.”

Unfortunately, psychotherapists, coaches, and consultants operate in a vacuum when it comes to having sufficient financial information about earnings and income trends. In this newsletter, I share more of this survey and then review what you can do to counter the downward trend in your own business.

“If we command our wealth, we shall be rich and free; if our wealth commands us, we are poor indeed.” (Edmund Burke)

Information is power, so here is more information about the incomes of your colleagues in the US, according to the Psychotherapy Finances 2006 survey. The most frequent fees paid for individual therapy sessions, on a self-pay or fee-for-service basis, are:

Psychologists: $120 per session
MFT’s: $100 per session
Social workers: $90 per session
LPC’s: $90 per session

Although these session fees are up slightly from the 2000 survey, the bad news is that the self-pay market is dwindling. In the 2000 survey, clinicians reported that 44% of their total client hours reflected fee-for-service or self-pay, and the rest came from managed care clients. Now they report that their self-pay clients are only 26% of their practice.

All of the psychotherapy professionals surveyed reported that self-pay sessions of each episode of care (how long a client stayed in treatment) averaged between 15 to 18 sessions, whereas managed care sessions averaged between 10 to 15.

“If money is a curse, my wallet is rated G.” (Anonymous)

One piece of good news from the survey is that therapists are tending to discount their fee less. Sliding scales may be a thing of the past, given the new realities of a lower income.

But the figures of overall income are not encouraging. Incomes are dropping for most professionals. The survey found that the median income breaks down this way:

Psychologists = $92,500
Marriage and Family therapists = $62,150
Clinical Social Workers = $58,333
Professional Counselors = $48,311

(Note:I always appreciate the Psychotherapy Finance Newsletter for its practical, concise information. They will be publishing more from this survey in the next few months and I will alert you to their findings in my future newsletters. To learn more about them, go to: www.therapyshop.com).

It isn't enough for you to love money - it's also necessary that money should love you. (Baron Rothschild)

The survey concludes that you must increase the non-managed care part of your practice. This has been my message since I began working as a business coach for therapists. The only way to become profitable is to take on the role of owner and operator of a business, and stop relying on an insurance company to have your financial interests at heart.

Instead, diversify and find more than one income stream of clients. Use a consumer model of business, and meet your clients’ needs as people, not patients. Affiliate with others to offer joint projects; contract with large and small corporations to bring your skills and talents into the workplace; use creative methods of not just doing therapy, but also doing business; model those in your community who are successful.

In future issues of my newsletter, I will continue to focus on how you can be more successful in your practice, to have a satisfying life and a fulfilling practice. Your clincial skills are important, but so is your ability to earn a living. Remember the words of Gertrude Stein: “Whoever said money can't buy happiness didn't know where to shop.”

Lynn's Upcoming Presentations

Sunday, April 23, 2006: Malvern, Pa
“Building Your Ideal Private Practice”
Sponsored by: Rubenfeld Synergy Conference
Contact to register: PSMSynergist@aol.com
** A full Sunday workshop at the lovely Desmond Hotel, in rural Malvern, Pa. In this seminar, I go beyond marketing ideas to offer you the experience of motivation and transformation, by showing you the developmental shifts you can make to become more successful and more comfortable in your role as both healer and business owner.

Friday, April 28, 2006: Columbia, MD
“Developing a Successful Private Practice”
LCPCM Spring Conference
9:00 AM 11:00 AM
Contact to register: Cejculp@aol.com

May May 4, 2006: Columbia, Maryland
Creating a Successful Private Practice"
Chesapeake EAPA meeting
Contact to register: Sabrina NDiaye [sabrinandiaye@yahoo.com]

Friday, June 2, 2006: Toronto, Canada
“Attracting Ideal Clients: Marketing with Integrity”
Saturday, June 3, 2006: Toronto, Canada
“Becoming a Coach: How to Diversify or Integrate Coaching into Your Ongoing
Practice”
Sponsored by: Leading Edge Seminars
Contact to register: www.leadingedgeseminars.org
** Two days of business coaching for therapists, healers, consultants and new coaches. The first day we explore the hated "M" word -- Marketing, and how to do it with ease and comfort. The next day we focus on a way to diversify your practice with a coaching approach. This will be a fun, experiential day to learn some coaching skills, to enhance or transform an existing practice, and to find out how to market a coaching practice as well. Come enjoy beautiful Toronto, Ontario, Canada and learn to become a savvier, more profitable business owner.

Note: For many of you who have asked, due to some scheduling overload on my part, the Strong Start Teleclass will not start up again until this Fall.

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Books by Lynn Grodzki, published by WW Norton. To order, click on each book.

	The Business and Practice of Coaching By Lynn Grodzki and Wendy Allen (2005) An estimated 30,000 coaches have entered the coaching profession in the past five years, but unfortunately, the majority report they are unable to earn a living wage from their coaching services. This book shows you how, using a coaching approach to the business of coaching.
	Building Your Ideal Private Practice By Lynn Grodzki (2000) The best-selling guide to what you need to do and who you need to be in order to have a highly profitable, personally satisfying private practice. Often called the "private practice bible" this book has become a resource for tens of thousands of your colleagues.
	The New Private Practice:Therapist-Coaches Share Stories, Strategies and Advice Edited by Lynn Grodzki (2002) A groundbreaking look at the profession of coaching through the eyes of 16 successful therapist-coaches who tell you how to become a coach, what to charge, and show you how they coach their clients.
	12 Months to Your Ideal Private Practice: A Workbook By Lynn Grodzki (2003) This planned, motivational workbook will help you build the practice you desire. The workbook incorporates fresh ideas, new exercises, further skill sets and much more to give you a direct experience of being carefully coached by Lynn, month-by-month, for a full year.

More next time,

lynn@privatepracticesuccess.com
See the website for additional articles, information about individual coaching, and upcoming classes.