Curt and Katie chat about how community mental health as well as insurance, hybrid, or private pay practices get money and pay their workers. We emphasize the importance of recognizing the financial realities of the mental health profession and how advocacy can drive change in the field. We also encourage therapists to understand the systems we work in and engage in conversations about financial transparency and sustainability.
Click here to scroll to the podcast transcript.Transcript
In this podcast episode we talk about how compensation is set up
There have been a lot of conversations about how therapists get paid and whether associates or newer therapists are being exploited. We decided to pull the curtain back to identify how money actually works in this profession.
What do therapists need to know about how finances work in mental health?
- How income is allocated across salaries, rent, insurance, and administrative costs.
- Why clinicians’ salaries represent just a fraction of total practice income.
- The impact of government contracts and insurance reimbursements on budgeting.
“[Clinicians in community mental health can] get very upset about productivity standards, but if we’ve budgeted for this program, and we need you to bill a certain amount, if you don’t bill that amount, we don’t get the money and we can’t pay you.” – Katie Vernoy, LMFT
- The Financial Dynamics of Therapy Practices:
- How income is allocated across salaries, rent, insurance, and administrative costs.
- Why clinician salaries represent just a portion of what practice owners need to pay.
- The impact of government contracts and insurance reimbursements on budgeting.
What are common misconceptions about group practice owners?
- There is a view that all group practice owners exploit therapists. This is often very far from the reality of group practice owners sacrificing their own pay for payroll
- We highlight the financial risks, responsibilities, and long hours owners take on.
“As an employee, [you have] your flexibility to be able to go and find another job. But, you know, the most recent lease that I signed was for five years…This is a five year commitment that is going to be something that the risk ends up getting shouldered by the group practice owners.” – Curt Widhalm, LMFT
Understanding Community Mental Health Budgets:
- Breaking down how agencies allocate funds from government contracts.
- Challenges like unfunded mandates and balancing clinician pay with program needs.
Managing Budgets in Group Practices:
- The complexities of balancing overhead costs, clinician pay, and sustainable growth.
- How practice owners often work unpaid hours to cover supervision, billing, and other administrative tasks.
Resources for Modern Therapists mentioned in this Podcast Episode:
We’ve pulled together resources mentioned in this episode and put together some handy-dandy links. Please note that some of the links below may be affiliate links, so if you purchase after clicking below, we may get a little bit of cash in our pockets. We thank you in advance!
Are Psychotherapy Group Practice Owners Exploiting Pre-licensed Therapists? by Calvin G
Relevant Episodes of MTSG Podcast:
Is It Worth It? Analyzing return on investment for your therapy practice
Don’t Take Tax Advice from Therapists: An interview with Julie Herres
Making Every Therapy Practice Profitable: An Interview with Julie Herres
Don’t Forget to Pay Yourself and Other Money Planning Strategies: An interview with Carla Titus
Understanding Your Money in Private Practice: An Interview with Jennie Schottmiller
Making Access More Affordable, An Interview with Michael Blumberg, LCPC
Becoming a Group Practice Owner, An Interview with Maureen Werrback, LCPC
Who we are:
Curt Widhalm, LMFT
Curt Widhalm is in private practice in the Los Angeles area. He is the cofounder of the Therapy Reimagined conference, an Adjunct Professor at Pepperdine University and CSUN, a former Subject Matter Expert for the California Board of Behavioral Sciences, former CFO of the California Association of Marriage and Family Therapists, and a loving husband and father. He is 1/2 great person, 1/2 provocateur, and 1/2 geek, in that order. He dabbles in the dark art of making “dad jokes” and usually has a half-empty cup of coffee somewhere nearby. Learn more at: http://www.curtwidhalm.com
Katie Vernoy, LMFT
Katie Vernoy is a Licensed Marriage and Family Therapist, coach, and consultant supporting leaders, visionaries, executives, and helping professionals to create sustainable careers. Katie, with Curt, has developed workshops and a conference, Therapy Reimagined, to support therapists navigating through the modern challenges of this profession. Katie is also a former President of the California Association of Marriage and Family Therapists. In her spare time, Katie is secretly siphoning off Curt’s youthful energy, so that she can take over the world. Learn more at: http://www.katievernoy.com
A Quick Note:
Our opinions are our own. We are only speaking for ourselves – except when we speak for each other, or over each other. We’re working on it.
Our guests are also only speaking for themselves and have their own opinions. We aren’t trying to take their voice, and no one speaks for us either. Mostly because they don’t want to, but hey.
Stay in Touch with Curt, Katie, and the whole Therapy Reimagined #TherapyMovement:
Consultation services with Curt Widhalm or Katie Vernoy:
Connect with the Modern Therapist Community:
Our Facebook Group – The Modern Therapists Group
Modern Therapist’s Survival Guide Creative Credits:
Voice Over by DW McCann https://www.facebook.com/McCannDW/
Music by Crystal Grooms Mangano https://groomsymusic.com/
Transcript for this episode of the Modern Therapist’s Survival Guide podcast (Autogenerated):
Transcripts do not include advertisements just a reference to the advertising break (as such timing does not account for advertisements).
… 0:00
(Opening Advertisement)
Announcer 0:00
You’re listening to the Modern Therapist’s Survival Guide, where therapists live, breathe and practice as human beings. To support you as a whole person and a therapist. Here are your hosts, Curt Widhalm And Katie Vernoy.
Curt Widhalm 0:12
Welcome back, modern therapists. This is the Modern Therapist’s Survival Guide. I’m Curt Widhalm with Katie Vernoy, and this is the podcast for therapists about the things that go on in our profession, the ways that we operate in this world. And Katie and I have long been advocates for therapists at any point in their careers, being able to maximize the amount of money that they can make. And what we wanted to do is take a lot of the complaints, a lot of the desires that we hear from people in the field about, hey, I want to make more money, whether it be in an agency, whether it be in a group therapy practice. This is not really an episode that’s designed for going out and launching your own practice. We’ve got other episodes on that kind of stuff. But we wanted to talk about, how does money work in this field. How does contracts work? Where does the money go when we hear people in group therapy practices saying, Well, my supervisor, my group practice owner, takes half of what I make. We wanted to maybe challenge some of those in a way that looks at how the money actually goes. What does the money actually go to do? And some of the things to maybe consider as part of all of that process. So Katie and I are going to dive into how this might look from either a community mental health agency or other kinds of agencies that are based on contract kind of work, and how this might look in a couple of different group therapy practice kinds of structures. So Katie, how does money work?
Katie Vernoy 1:55
Oh, that’s a big, big question. I think where I would like to start is very philosophical and potentially a little bit pushing back against some of the things that I’ve heard and read. There was an article that went around recently about the philosophy of payment and challenging the idea that group practice owners maybe shouldn’t be making two times what their therapists should make. It’s ‘Are Psychotherapy Group Practice Owners Exploiting Pre-licensed Therapists?’ And we’ll put a link to that in the show notes. It’s a new blog, and the person that wrote it was going to do some follow up, but it got me thinking, because there was this metaphor around a group practice owner being like someone who had bought a house and then was entitled to half of everything, even though they were not doing all of the work to keep the house running, which was what the rest of the family was doing. And it’s not a great metaphor at all, and it really doesn’t place the onus of these pay differences, or even really understand the pay differences in a way that makes sense. We’ve had a couple of episodes where even you and I have argued about things, and it comes down to a lot of times, clinicians, new clinicians, pre license, provisionally licensed folks standing up and saying, supervisor or group practice owner or manager at a community mental health organization, you are exploiting me, and I can’t handle it. And in truth, it’s not either that is wrong. The other side of it, of course, is group practice owners or supervisors or managers saying you’re so entitled, and why do you want to make a bazillion dollars? Where the money comes from, whether it’s government contracts, insurance, infrastructure, societal norms, it is not completely in the control of the agency or the group practice owner. Part of it is this gigantic structural issue around value of therapy, what insurance will actually pay, what governments think that you can do with $2. And so to me, I feel like you know, as often happens, the workers and the managers are being pitted against each other in a system that is set up to make them fail. And so I just wanted to start with that big, high level thing of the money that comes into a group practice or comes into an agency is defined by someone else, typically, than the person who is managing the practice or managing the agency.And so what we start from, in my mind, an amount of money that then we have to deal with when we’re in those situations, when we’re budgeting, when we’re deciding how much to pay people. And yes, there are other things that can happen, and we’ve talked about this in other episodes. I’ll link to those in the show notes over at mtsgpodcast.com and there are just some realities that are pretty challenging for folks who have to pay other people for the work that they’re doing.
Curt Widhalm 5:30
So I think that it will help to maybe frame this a little bit. I am a group practice owner, Katie, you’ve been a manager in community mental health before, and I work with a lot of teenagers in my practice, and sometimes some of the way that I hear some of these arguments is kind of akin to teenagers at their developmental level being able to make the arguments. Well, it’s my room. These should be my rules within my particular space, and, well, there’s a certain perspective there that is based on the information that’s known our goal really in this is kind of how I approach working with some teens in my practice, as far as being able to say, well, let’s consider some of the things that we don’t know? So that can maybe help to find some of the better balance here. Because until I started running a practice and really looking at money and how I ended up paying myself, or making some of the mistakes before that made it to where I wasn’t paying myself, I think that sometimes being able to pull the curtain back a little bit and look at, okay, here’s what the money actually goes to or here’s what’s actually available. Things start to make a little bit more sense as to why a lot of agencies end up paying kind of around the same amount, why a lot of practices, group practices, end up paying kind of the same amount when it comes to percentages of income. And so I think it might help us to maybe start with first let’s talk about some of the community mental health agencies. How do they get their money in the first place?
Katie Vernoy 7:19
Oftentimes, in community mental health, there are contracts that folks can pitch to, or programs can pitch to. They have requests for proposals, and you put down what your capacity is. You put down what your skills are, you know, what your clinicians have been trained in, what other alternate providers or adjunctive providers can also do, and you put forward, this is what we can do. And if they think that you are reasonably situated to do it, you get a contract, and you’ll get an amount. And so it can be amount that sounds pretty big and exciting. I don’t know what the numbers are today, but I had one program that was probably $5 million there was another one that was another one that was more like $775,000 and you start going through and identifying where that money is going to go. And it actually works two ways. One is you have to use the money for the stuff and the program. So you’re paying the clinicians, you’re doing all those things. But then there’s the overhead of rent and liability insurance and all this stuff. And we’ll talk about that more in group practice, because you have more of a handle on that for for those and I think those are similar expenses. But there’s also this weird part that’s, in fact, kind of similar to private practice, in that you get up to the amount that you have been promised, and so you have to bill to get the money. And so folks get very upset about productivity standards, but if we’ve budgeted for this program, and we need you to bill a certain amount, if you don’t bill that amount, we don’t get the money we can’t pay you. And so it’s, it’s very interesting to to see how that works. And I will stop here, because I don’t want to bore people. But it’s oftentimes I felt like, you know, when I was doing this and and especially when I had the smaller budget, we were playing chicken with the number to try to get as close to the number without going over it, or if we went over the number, seeing if we could get an additional little bit of money to come in. And that worked a couple of times and did not work other times. And so there was times that we billed for services that we actually didn’t get paid for. And so in the nonprofit agency world, the money is set. You try to budget as best as you can. And there were some agencies that budgeted to the best clinicians best week, which was unreasonable for everybody. And some agencies that actually budgeted based on reasonable productivity standards and were able to have things be a little bit more reasonable for the clinicians. And so it really comes down to how well budgeted it is. And there’s not much you can do after you’ve started the contract year or the fiscal year to shift any of that stuff, except try not to have people turn over, which is a huge amount of onboarding costs and all that kind of stuff. So agencies, I think, plan, it’s just sometimes their budgets are super tight, because community mental health organizations are often asked to do what you know we kept yelling about when I was in some of these places, unfunded mandates, where you have to do extra paperwork that is not billable to get the money, and you have to budget that into clinicians time or other providers time without it pulling back from what they’re actually gonna be able to bill.
… 10:47
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Curt Widhalm 10:48
So just to maybe throw some numbers at this real quick.
Katie Vernoy 10:51
Okay.
Curt Widhalm 10:51
So if a community mental health agency gets a contract for a million dollars, and I’m assuming within that, each of those sessions is negotiated for: This is what all of the sessions over this year cost. So if it’s $100 per session, that community mental health agency has to do 10,000 sessions during that year.
Katie Vernoy 11:14
Yes.
Curt Widhalm 11:15
And so based on each of those sessions, some of that money has to go to the clinician. Some of it is figured in per session. This is going to overhead costs. This is going to admin costs. This is going to case managers, or whoever else that’s helping to in whatever ways possible, make it to where clients are getting into the seats in those therapy sessions with the clinicians.
Katie Vernoy 11:42
Yes, yes. And I think especially when we look at agencies or private practices that do insurance billing, especially government based insurance billing, you’re paying billers, and sometimes full time billers, to do this work and chase down claims and make sure everything’s accurate. You’re also paying quality assurance to make sure that people are doing things properly. So there’s not taking the money back, there’s there’s a lot of stuff, a lot of overhead that happens in agencies, and so it can feel very onerous on the clinicians who are doing the work, because they’re the only ones who are billing. Everybody else is doing work and getting paid regardless of productivity because they’re doing work that supports getting paid. They’re just not doing the work that actually you can get paid for. If it’s not managed properly within the system. The clinicians who are working so hard to try to build this stuff can feel really put upon, because the weight of the agency is resting on them, and there’s not a real understanding or a support in I think the worst run agencies that these clinicians need to be set up for success, because everybody else’s salary relies on them, and there’s not that, there doesn’t feel, seem to be felt an appreciation for that. And we come back again to Why are supervisors making more? Why are managers making more? Why are owners or CEOs or whatever making more? And it it’s something where, if people don’t agree that as you continue forward and you take on more responsibility and risk, that you should make more money, I think that we’re not going to convince them that this is reasonable.
Curt Widhalm 13:20
Okay, so I know this is an audio podcast, but I’m gonna throw a couple of other numbers out here. So continuing on with what we’ve said so far, at 10,000 sessions, if we’re figuring it’s roughly 50 weeks in the year, ease of math, people, I know there’s two more weeks that comes up to 200 sessions a week. And let’s say this is even a reasonable agency that says each clinician needs to do 20 sessions per week.
Katie Vernoy 13:51
That would be 10 clinicians. Oftentimes it would also mean two supervisors, because you can only have eight in the group supervision group. So that would be two supervisors. One of them may also be a manager who’s running all of the background stuff, and so that would be whatever that looks like. So it could be going to meetings, it could be making sure that there’s compliance with the grant rules, that kind of stuff. And if they’re under another type of program, so I was a coordinator, but I was also a manager, or like a director for intensive services. I was making sure that all of the programs were in compliance, each of the coordinators were managing the specific contracts, and then there were some additional supervisors to do the clinical supervision. So that’s a lot of infrastructure. And I was actually at an agency that was quote, unquote management light. There was only one or two levels above me and it, you know, and I wasn’t the end all be all. I was running a division. But it was not huge. It was, you know, five or $10,000 by the end. And so it’s something where all of those folks need to be paid. You want to have sufficient pay for the amount of knowledge and, and work that’s being done as well as the risk that’s being taken. As a director, I think I had 40 clinicians underneath me, and they all had probably 15 to 20 cases, and I ultimately was the last person on the phone tree when there was an emergency. And so it’s something where there’s a lot of risk, there’s a lot of extra time thought about things. There’s additional trainings to be supervisors and managers, and so there’s, there’s a lot that goes into it, and I think that there are potentially reasons why clinicians can justifiably feel like they’re not being paid enough, given what the differences are in each of those levels and how they get paid.
Curt Widhalm 15:40
So, I’ve got my calculator out here, and in the example that you just gave minimum of at least three people, in addition to the direct clinicians, the direct service clinicians, as far as supervisors and admin. So what is starting out as well? There’s 10 of us and a million dollars, and if we split this all equally, we should each make $100,000 but with just three more people, everybody’s salary immediately drops down to about $77,000
Katie Vernoy 16:10
And that’s not including additional overhead like rent and…
Curt Widhalm 16:14
EHR systems…
Katie Vernoy 16:16
…and electrical and…
Curt Widhalm 16:18
…taxes and all of that kind of stuff.
Katie Vernoy 16:19
Yeah.
Curt Widhalm 16:20
And I think breaking it down in this way helps me to make the most sense from okay, this is what a budget actually looks like, because in addition to all of this is being able to build in, like you mentioned, some of the most expensive pieces of this is onboarding people and getting people trained before they’re even actually able to see clients. Then there’s all kinds of other overhead that goes along with it, a lot of other compliance issue kinds of things that make it to where a million dollars really doesn’t start out as a million dollars when it comes to just salary for what’s really kind of a very small agency in this hypothetical scenario.
Katie Vernoy 17:09
Yeah, and a million dollars is super small, and then there’s also the other piece of $100 is probably low. It was actually probably more. So theoretically there’s there’s more, more give. But the math was much easier for $100, 50 weeks. But my experience of it is that there are agencies that will put less into their infrastructure, so less billers, less folks who bill less per hour, so case managers or skills building workers. I forget the names that we had for them. I think one of them was like family advocate or something like that. Those folks bill less. They also make less, and so you can make more of the money with potentially lower pay for the providers or for the people who are doing the work. But when you don’t have case managers, when you don’t have dedicated billers, when you don’t have sufficient administrative assistants, I had clinicians who were sitting by, you know, this is how old this was, but they were sitting by fax machines waiting for paperwork to go through. And obviously that’s not billable. And so they were still held to a productivity standard, but we’re doing some of these additional admin pieces. That’s not helpful. But eventually I was able to convince them get admin. It’ll help us bill more. But some agencies are a little bit they’re not seeing the big picture, and they’re not able to identify, like, oh, spending a little bit of money here can actually improve a lot of things.
Curt Widhalm 18:39
But why don’t the agencies just ask for more money in these contracts?
Katie Vernoy 18:45
They do, they do ask for more money, and oftentimes they are told “you get what you get.”
Curt Widhalm 18:53
Part of the, at least on the community mental health side of things, or government contract sides of things, that this is really knowing how and who in the government to advocate for, you know, Katie and I have spent a number of years going to DC to lobby, you know, Congress people on getting MFTs eligible for Medicare reimbursements. And it took a very long time to get there for us to find out that on an individual level, at least where you and I practice…
Katie Vernoy 19:26
Yeah.
Curt Widhalm 19:27
…it is not something that is even close to kind of the rates that end up making sense for either you or I.
Katie Vernoy 19:36
Yeah.
Curt Widhalm 19:36
But when it comes to things like county contracts, kinds of things, at least here in the Los Angeles area, we’re not going to go to DC to advocate for better money for Los Angeles county mental health funding that would be to our county board of supervisors, which is…
Katie Vernoy 19:55
And potentially Sacramento,
Curt Widhalm 19:57
And potentially to our state reps in Sacramento. But really, being able to look at a lot of the advocacy work to get bigger contracts is year after year involvement in advocacy that, guess what, if you’re seeing all those clients for less than that $77,000 you’re feeling, hey, I don’t have the bandwidth to be able to do this, and it becomes kind of a system that ends up getting stuck in itself just to be able to say, All right, here’s the money that gets pushed to mental health. And at the end of the day, the voters that are voting for me these positions, they’re more concerned about getting people services, not necessarily paying the clinicians more.
Katie Vernoy 20:42
Well and I want to make a point there, because I think it helps to give a little bit more context. One of my jobs as a director was going to meetings where we advocated at the county level, and that was part of what I got paid to do. So agencies, while they may seem like the devil are, in fact, trying to work to get more money into the agencies and trying to, at least to a certain extent, get the best clinicians they can who are going to know how to do the paperwork, who are going to keep the clients, that are going to do high quality work and not increase liability. And they have recognized at different points throughout the years, we have to pay more to be able to get the best clinicians, and so we need more money. So they are also advocating, and potentially have high level folks who are the person who was CEO when I was there, was going to Sacramento and advocating for different taxes to be put into mental health money and that kind of stuff. So agencies aren’t wonderful all the time, but part of it is that they have limitations, and they are actually on the side of paying clinicians more, maybe not as much as you want, but they’re trying to do the work.
… 21:55
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Curt Widhalm 21:56
So, switching to group practices, I don’t think that it’s necessarily all that different. It’s just where the money comes from that ends up potentially being different. Whether it be group practices that are based on insurance contracts that are in kind of some very similar ways, based on pre negotiated rates and referral places. Other group practices like mine, that are entirely out of pocket, that it’s all fee for service there aren’t necessarily contracted rates. Some of the things that go into budgeting is planning ahead to be able to pay clinicians during slower times of the year. You know, for example, our practice that works a lot with teens and families when it’s not the active school year, people tend to go on vacations. They tend to not have the same kinds of pressures that being in school ends up bringing, as far as stressors. So part of being able to pay the bills during the slow months is being able to spread out some of the money across time, and part of that goes into budgeting as well. I think it’s also something where most group practices tend to pay, I’m going to talk about this from an employee end, rather than an independent contractor end, but most group practice owners, they pay around 50% of what a clinician’s income is based on the clients that they see. Depending on where your jurisdiction is, sometimes it can be here’s just this straight here’s 50% but in some jurisdictions, like California, our Department of Labor ends up making it a lot more risky if you’re paying people just on a fee split percentage. And so some of the algebraic math that goes into thinking about this is computing into here’s what this might look like based on hourly rate, and that is based on looking at how many clinicians in the past have been able to look at some of the income numbers. There’s also in group practices that might be kind of smaller or boutique kind of practices, there’s a lot of running behind the scenes, kinds of things. I know that a lot of employees care about their jobs. They care about the clients that they work with, but it’s the extra stress that goes into who’s ultimately responsible for paying rent? You know, in my practice, to provide my clinicians with the most amount of flexibility in being able to schedule their clients and being able to help assign clients to them, not only are we paying for rent when you are actually seeing clients, but we’re also paying rent to keep those rooms flexible for you to be able to schedule clients. And that’s part of what goes into the 40, 50% that goes to the group practice owner side of things.
Katie Vernoy 25:13
I want to comment on that because I think a lot of newer clinicians, folks who are in the employee or, you know, independent contractor seat feel pressure because of productivity standards, or even the additional productivity standard effort with group practice owners, which is maximizing the number sessions versus the hours that the office is available. And so if you’re going to be in an office for eight hours, you have to see at least six clients during that time, kind of thing. And it sounds like you’ve managed that and budgeted that so that it’s not as high pressure for that. It’s overall productivity, not time and room productivity as well. But it’s something to consider if your office is not making as much money as it can room by room, a a group practice owner, you’re losing money that you could be making and either reinvesting into the practice, paying your clinicians more with or having more profit for you as a as a person who’s taking a lot of risk. But so often, I’ve heard from a lot of newer clinicians, this feeling of just how onerous productivity standards are, or some of these other requirements are, and they come from a real place, and so I just wanted to put that in there as well, because if a group practice owner has pulled the pressure off of that and you’re getting paid differently because of it. That’s why, so that you aren’t feeling that pressure, so that you can do your practice at your own pace, they’re still able to be sustainable.
Curt Widhalm 26:52
But and then it’s the additional things that make a practice, you know, not necessarily have some of those productivity pressures or also just emphasizing taking care of employees. But you know, off the top of my head, some of the ongoing expenses, liability insurance, marketing, training clinicians, sick pay, retirement, there’s, you know, employer taxes. Taxes don’t just get taken out of your paycheck, then your employer pays taxes on top of that, covering supplies, if they’re covering health insurance for you, there might be minimum standards as far as productivity on a week by week basis to get to all of that and at the end of the day, there has to be some amount of administration time to being able to run a business, but…
Katie Vernoy 27:46
But there’s also the admin time for the clinicians too, if they have extra time to do paperwork, or if they’re taking supervision hours, or those kinds of things like those are all unpaid or unbilled hours…
Curt Widhalm 27:58
Right.
Katie Vernoy 27:58
…that clinicians are getting paid for?
Curt Widhalm 28:00
Right. And well, as an employee, your flexibility to be able to go and find another job. But, you know, the most recent lease that I signed was for five years. You know, this is a five year commitment that is going to be something that the risk ends up getting shouldered by the group practice owners. Going back to the article about taking advantage of pre license therapists…
Katie Vernoy 28:35
Yeah.
Curt Widhalm 28:35
…I think that the angle that it was coming from looks largely at group practice owners who are maybe not putting in work. Kind of almost akin to like apartment owners who just hand hand everything over to a property management company. For taking an article like that as gospel and painting all group practice owners, it would encourage you to look at your employment area and look at what is the management actually doing? Just like we pointed out earlier in the episode with the administrators in a contract agency or community mental health agency, looking at what is all of the work that’s going on behind the scenes. Because there can be a tremendous amount of unbilled hours or unpaid hours that the group practice owner is going through as well.
Katie Vernoy 29:34
Well and I think the other thing to really look at, and we can talk about your experience, if you want, or I can talk about some of the group practice owners I’ve consulted with, but a lot of group practice owners are still seeing clients, so they’re still bringing revenue into the practice. They’re also doing supervision of some sort, so there’s a lot of additional clinical mental load that they’re carrying and training that they’re doing, and many are doing billing and payroll, and they’re doing a lot of the administrative tasks that especially newer clinicians who’ve never run their own practice don’t know exist. I mean, from your experience, are you working more or less the same than most of the folks you bring in to your practice and hire.
Curt Widhalm 30:22
I don’t think that there is anybody on my team that would say I am doing less work than anybody else.
Katie Vernoy 30:30
I don’t think you’re doing less work than anyone in the world. Curt, cause you’re doing too much work.
Curt Widhalm 30:36
And I think that that’s something that my team appreciates in seeing leadership in our practice is is shouldering some of the workload, too. And I think that this is something where I’m also willing to take the step back and say, okay, out of your client that’s bringing in this amount, this is where the dollars go to. And I don’t, I don’t think that every group practice owner is willing to do that. I don’t show necessarily the entire books as far as where everything goes. But to be able to say, okay, by the time that you’re again, making math easy here, kinds of things, by the time that we look at your $100 client, and you take $50 of that, and there’s an extra 10 to 15% of that that goes out the door immediately for taxes, and so on and so on and so on. It quickly becomes that $100 goes away very, very quickly.
Katie Vernoy 31:38
Yeah. Well, and I think the other thing that a lot of clinicians don’t see, my experience of you, of a lot of other group practice owners I’ve talked to, you, don’t start with this huge kind of financial security net that is allowing you to take losses month after month when you first start with clinicians. We will link to some of our financial folks who’ve talked about this in the show notes over at mtsgpodcast.com. But I think there’s a lot of clinicians who move to group practice because they have a wait list, because they have maybe a little bit of money saved, and they start to bring on clinicians, and clinicians slowly build a caseload, but are needing more money. And group practice owners pay their clinicians, their employees, or whoever, before they pay themselves, they oftentimes take a lot less money because they’re planning for those hard months, creating an emergency fund, a safety net fund, and potentially start with some debt, especially you’re talking about a five year, you know, rental period, a rental contract. There’s also all of the upgrades and the furniture and all of the things that you put into those offices that are now part of the debt that you’re holding, that you’re going to be paying down little by little. I think when we talk about folks who are making a ton of money off of group practice, these are people who are much further down the road and are not and have hit their sweet spot and are not growing and trying to expand, which incurs cost and so so many group practice owners have gone years with paying themselves very little, paying themselves less than their the clinicians that they’ve employed, and at some point they get to make some money.
Curt Widhalm 33:32
And I can’t speak for all group practice owners, but I will say, and we want to pay all of our clinicians more. We want to do this. Like this is…
Katie Vernoy 33:45
I’ve heard that a lot, too.
Curt Widhalm 33:47
This is not a all right, I am here to take advantage of everything. But the real point of this episode is, if there’s not more money, there’s not more money.
Katie Vernoy 34:00
Yeah, yeah.
Curt Widhalm 34:02
So you can find our show notes over at mtsgpodcast.com. Follow us on our social media, join our Facebook group, the Modern Therapist Group, to continue on with this conversation. And until next time I’m Curt Widhalm with Katie Vernoy.
… 34:16
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