Show Notes

Welcome back to the Designer Practice Podcast, and I’m your host, Kayla Das.

Today we’re going to be discussing a topic that I know makes a lot of therapists feel a little uneasy, and that’s money, or specifically setting your private practice rate and whether the rate you’re currently charging is actually working for you.

Because here’s what I’ve observed coaching therapists throughout the years. Undercharging or the thought of decreasing one’s rate is one of the most common things that happen in private practice.

That said, you’ll see in this episode I’m not one of those coaches who says you shouldn’t provide a sliding scale or provide pro bono sessions, especially if it follows your practice mission.

But you should be planning and preparing for these financially if you know these requests are going to show up.

So in today’s episode, I’ll be discussing how to set an accessible and sustainable private practice fee and provide some strategic and creative ways that you can add affordability into the equation without sacrificing your practice and life in the process.

So let’s get into it.

Introduction

Before I dive in, I want to address a common phrase that you’ve probably heard too, being a private practitioner. And that’s the statement, “Know your worth,” which is often paired with discussions around setting your private practice rates.

And I’m going to be honest with you, I’m not a fan of that saying.

Not because I don’t think some therapists struggle with setting rates due to mindset or money block issues, which is the main reason that the statement is said by others. But because it makes the assumption that just because a therapist wants to provide accessible therapy, that it’s a problem that’s associated directly with their worth.

But contrary to this belief, many therapists choose to provide sliding scale or pro bono services because they know their worth and want to make that worth accessible to those who might not otherwise be able to access services.

In other words, the therapist feels it’s their mission to help as many people, regardless of the cost.

Now, of course, we’re talking about private practice here, and that means making a profit is the name of the game. However, it doesn’t mean there’s an either/or situation here. You can make a profit and follow your mission and your life’s purpose to provide affordable therapy services, if it’s your mission, of course.

So if it’s your desire to provide accessible services, it isn’t a self-worth problem. It’s simply a math problem that we aim to address in today’s episode.

So I’m going to repeat that again.

Your desire to provide accessible services isn’t a self-worth problem. It’s simply a math problem.

And when you address the math, you can design a practice that you love and that’s sustainable even if it means providing affordable therapy in your practice.

Pros and Cons to Reducing Your One-to-One Session Rate

Now, I want to highlight that not everyone wants to reduce their rate, such as providing sliding scales or pro bono in practice. And if this is you, that’s totally okay.

This episode will still give you valuable lessons about how to ensure your fee is set at the right rate. Because I think sometimes we think that we have to reduce our rate, which we don’t, and also, when we want to reduce our rate, there’s a little bit of shame of doing so in fear that it be seen as a self-worth problem.

So in this episode, I’m going to give you a free resource, which will be at the end, that can help you do the math aspect, so you can determine if you’re making a profit or you’re in the red when it comes to your current rate.

But let’s discuss the pros and the cons of reducing your rate to accommodate clients ‘ cause maybe you don’t know why you want to provide a sliding scale, but you know you want to. And maybe you don’t know the pros and cons of doing such.

Pros

So let’s first talk about the pros of providing a sliding scale or a reduced rate to clients, specifically in your one-to-one.

First, it provides accessibility to clients who might not otherwise be able to access individual therapy.

Next, it provides some level of income into your practice, even if it’s a reduced rate, of course, if we’re talking about sliding scale, from someone who might, again, otherwise not be able to access your services.

It helps decrease wait lists and accessibility in the public and nonprofit sector as more individuals can access your services privately.

It can also give you a feeling of fulfilling your life’s purpose, providing it’s your mission to provide affordable therapy.

Cons

Now, let’s get into some of the cons. Some of these you might have heard of before, some of these you might not have.

While it gives you some level of income, it is at a significantly lower rate than your traditional rate of pay that over time can really impact your ability to pay your practice bills or to sustain your current lifestyle.

It also takes away a spot in your calendar that might otherwise be filled by a full-paid client.

Without parameters, it can also feel like you’re making a lifelong commitment to a client to pay a much lower rate of pay.

Sometimes we don’t think of this, but while we may look at providing one client a sliding scale as accessible, if another full-pay client determines that others are paying less for the exact same service, it is possible that the client who is paying your full rate of pay can either become offended or insulted by what they might perceive as being unfair or unjust. Because while one client might indicate that they are struggling to make the rate and then you give them a sliding scale, another client who may equally or even more deserving of requiring a sliding scale spot may not ask for that same rate and not even consider the fact that it could be negotiable.

For instance, if you went to a dentist and you were charged five hundred dollars for a procedure, but then you found out your friend was only charged a hundred dollars for that same procedure, how would you feel even if you make the same salary? Probably a little annoyed, and maybe you won’t go back to that dentist.

Another thing which can’t be understated is the impact a sliding scale can have on the therapeutic relationship if a therapist ends up feeling taken advantage of based on the rate of pay that they ultimately decided to charge.

This actually is way more common than one might think. A therapist may choose to reduce their rate for a client and then later in sessions find out that a client has spent money on something that the therapist might perceive as extravagant, like a trip or expensive clothing articles. And then the therapist begins to feel resentment towards the client because the priority to pay them their full rate of pay is lower than buying that really nice brand name purse, for instance.

So we still want to ensure that when we’re providing a sliding scale, we understand some of these cons.

And of course, these are just a few potential examples. I’m sure there’s more pros and cons to providing sliding scales.

But the good news is that it’s all manageable. If you build some structure around it from the start, you’re going to feel more in control. And if you’re already in the middle of some of these cons, strategically deciding next steps can protect your practice.

How to Do Sliding Scale Sustainably

Here’s how I think about making sliding scale or pro bono work in a way that’s sustainable for your practice.

First, set a cap and stick to it

Decide in advance how many reduced rate spots your practice can hold at any given time. Maybe that’s three, maybe that’s five. The exact number will depend on the financial picture, so the math. But the point is that there is a number of spaces that you have. And once those spots are filled, they’re filled. You let clients know that your sliding scale spots are full and offer to put them on a wait list or refer them to another therapist. But having that cap keeps you accountable to the financial reality of your practice and provides boundaries around how many spaces you can take on. But it also gives you the ability to make one-to-one sessions accessible for those who truly need it.

Second, put a time limit, or a session limit on those spots

Another important consideration is when you bring on sliding scale or pro bono clients, be upfront about the parameters around the number of sessions that they can get access to at that rate.

The first part, though, is that you are clear about the limits someone can have, and if you provide reviews of the sliding scale rate, the number of times you’ll give a review of that rate.

So an example could be maybe you offer four sessions at a reduced rate, and then you revisit the rate one time for an additional four sessions. After the eighth session, they’ve maxed out on the number of times that they can use a sliding scale rate, at that point, they can either continue to see you at your full rate of pay, or you can provide them referrals to other clinicians as a result.

This does a few things. It creates a natural check-in point where you can determine if the payment arrangement still makes sense for both you and the client. It keeps those spots from becoming permanent fixtures in your caseload so that other clients may be able to access them in the future should they need them. And it gives you an out if things just aren’t working the way you had hoped.

The key, though, is you need to be clear about what that looks like. You need to stay accountable to yourself and your practice to make it consistent and fair across your client caseload.

Third, set and communicate clear expectations upfront

The clearer you are from the start, the more confident you’ll feel as you start implementing these policies you set around your sliding scale and pro bono spaces. If a client knows from day one that their sliding scale rate is tied to specific terms, like a capped number of sessions, a review at a certain point will just be predictable. They’ll understand if that rate has to change. There’s no surprises later, and it decreases the frustration a client will have around the change in terms. And it makes it so much easier for you in making those changes

Group Therapy as an Alternative Solution

Another possible and creative solution is group therapy.

And if you’ve been in private practice for a while, you may have heard of other therapists include group therapy into their practice service offerings, and I think this is a great way to follow your mission to provide affordable therapy without sacrificing the bottom line. In fact, it can actually increase your profits.

So, let me do some math for you because it’s pretty compelling.

Say you charge a $150 for an individual session. Now imagine you offer a group therapy option at $80 per session per participant. If just two people attend your group, so pretty much a dyadic, you’ve already made a $160. That’s $10 more than your individual session rate for the same amount of time that you would spend in that session.

And a third participant is another $80, which now you’ve made $240 from that one hour. Four participants, $320. You can see where I’m going. Chances are, though, if you are increasing the number of participants in a group, you may add an extra half hour or additional timeframe into the session.

But overall, you’re increasing your profits, but you’re still creating an affordable option without reducing your individual rate. It’s really a win-win situation.

Taking in the Whole Financial Picture

Here’s something I want to make sure that’s clear before we get into the resource I’m sharing today. Your rate needs to reflect what it actually costs you to run your practice and what you need to earn to make your private practice financially viable.

So the full rate you choose, the number of sliding scale or pro bono spaces you offer, and the expenses you have in your practice must still bring you to the profit side for you to even make a sustainable salary from your practice. All of that needs to be factored into your rate. Not just your hourly session fee, but the full picture of what it takes to run your practice sustainably.

When you look at it that way, the rate conversation stops being about your worth because it’s really not about your worth, and starts about being about the math, and the math is more tangible to work with.

Setting Your Private Practice Fee Guide

Which is actually a perfect segue into what I want to leave you with today. I have a free guide called 9 Simple Steps for Setting Your Private Practice Fee, and it does exactly what the name suggests. It walks you through the mathematical steps to figure out what you should realistically be charging per individual session to keep your practice financially healthy.

And what I love about this guide and why I want you to have it, is that it doesn’t tell you to stop offering sliding scale or pro bono services. Instead, it shows you how to account for the reduced fee sessions you’re already carrying, factor them into the overall revenue picture, and set a rate that makes the whole thing work.

So you don’t have to choose between your mission and your financial sustainability. You just need to include it into the formula.

So you can grab the free guide in the show notes. You can click on the link, and it’ll bring you to a sign-up form where you can get your 9 simple steps for setting your private practice fee free guide.

And if today’s episode sparks something for you, maybe you’ve been sitting on a rate that you know just isn’t quite right, or you’ve been offering sliding scales without any real parameters, I really hope that this is a good starting point for you.

If you like this episode, please follow us on your preferred podcasting platform, and I would love if you would give an honest review of our podcast on your preferred platform.

Thank you for tuning in to today’s episode of the Designer Practice Podcast.

Until next time. Bye for now.

Credits & Disclaimers

Music by Denis Pavlov Music from Pixabay

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