What’s the deal with therapy pricing?

I know, private practice therapy is expensive! I’ve been on the client side of things as well and wondered what the heck was going on. The thing is, mental health care is healthcare and as we all know the financial structure of the healthcare system in the US is… well… really really bad. Everyone should be able to have therapy for free, just as everyone should have all their healthcare for free. Unfortunately that’s not the way our system works. Our system profits off of illness and functions as though mental health is secondary to physical health, when we all know from experience they are not different.

Because of their size and access to sources of funding, agencies and organizations have more financial capacity to accept insurance and provide lower therapy costs. Insurance companies reimburse for mental health services at a rate that is often less than half what most therapists experience as a living wage, but agencies typically provide therapists a guaranteed income in the form of a salary that is not dependent on number of sessions, and often benefits like paid time off and health insurance. So, you can get less expensive therapy through an agency and they are more likely to accept your insurance- that’s a fact. The issue is that therapists working at agencies are usually required to have very high and unsustainable caseloads in order to meet the funding needs of the agency. This means most therapists at agencies have to sacrifice care and passion to stay afloat supporting so many people at once, which in turn leads to high turnover.

In private practice, therapists shoulder all of the costs on their own, including a hefty self-employment tax, liability insurance, licensing fees, advertising, health insurance, etc. In solo private practice, therapists only make money when they do a session and the more sessions they do, the more money they make, and vice versa. From what I know in my community, it is rare for a private practice therapist to do more than 25 sessions in a week and that is on the highest end, with many doing closer to 10-15. It’s a very straightforward system, but also means there is never a guaranteed income or any benefits. If a therapist has to do fewer sessions for any reason (like getting sick, becoming disabled, experiencing discrimination, taking a vacation, going to the doctor, etc.), they make less money. The benefit is that private practice therapists can set their own schedule, and adjust their rates in a way that makes it (more) possible to make enough money and not be completely overwhelmed and burnt out. Sliding scales are helpful and can be done in a just and equitable way, AND there has to be a balance with full-rate clients in order for it to be sustainable. Most people need sliding scale spots and aren’t clamoring to pay full price, thus lower rate spots are harder to come by.

Let me be clear, I’m not saying there aren’t amazing therapists at agencies because there really are! And there are certainly many private practice therapists who are just trying to make a bunch of money and call it a day. But the difference in the structure is crucial to understanding why costs can be so different.

Most people become therapists because we care very deeply for the work and the people we support. We all have to find a tricky balance between equitable humane financial structures and a workload that is not only sustainable, but allows us to truly be the most present and helpful we can be. It is not a decision any just therapist wants to make, but this is where we are at.