Building a practice with integrity: fee setting & sliding scale

Jun 30, 2013 by Ann

If you have a client who calls you,

asks immediately  for an initial appointment,

and says they’ll pay your full fee,

do you bring that client onto your caseload?

I hope your answer is

“Maybe.”

 

 

Building a practice with integrity

A reader recently asked me to write a post on setting fees & establishing a sliding scale.

So today I’ll be offering some tips about fee-setting.

But that’s not where the conversation is going to start.

We have to start with a more basic, more fundamental question about principles.

Because if you establish your practice according to principles and integrity, you’re headed in a very good direction.

So don’t worry– if you are looking for some nitty gritty details on establishing and negotiating a sliding scale, you can find these details at the end of the post.

The first question to ask yourself

Before you decide what to charge,

whether or not you have a sliding scale,

or even where & how to market,

you need to figure out who your ideal client is.

When that client calls and asks for an appointment, you need to ask yourself, “Is this a good fit?”

 

 

Tons of marketing specialists, consultants and seasoned therapists have written extensively on this topic.

So I’m not going to write today about how to do this, but it’s worth mentioning why it is important.

I hope after reading you’ll get why this step is so crucial, and that you’ll go and do some reading on your own about it.

It’s this simple:  You can’t hit a target if you don’t know what it looks like.

Your first job, even before setting fees, is figuring out your niche.  In a town like Austin, it is crucial for therapists to have a niche.

So if someone calls, asks for an appointment and wants to pay full fee, do you agree?

Maybe.

This question of fit needs to be at the heart of your decision.  If you accept clients onto your caseload who are not a good fit, you will be unhappy.

You may also be opening yourself up to a lot of liability, if you are practicing outside of your scope of expertise as a beginning professional.

And of course, you need to put your client’s wellbeing at the center of your choice.  What is in their best interests?  Given what you know from that consultation, do you feel you can be of help to this person?

A few tips for setting fees

This is just a starting point when you are considering what to charge and whether to offer a sliding scale.

1.)  Market research.

It’s really important that you know what other people in town like you are charging.

You want to consider this against several factors:

the location of your practice,

your area of expertise,

whether you are an intern, fully licensed, or a seasoned professional– among others.

Do some research and see the range of fees people are offering.

Remember, too, that just because someone says the top of their sliding scale is $150 doesn’t mean that they’re receiving that fee for every clinical hour they offer.

How many people offer what you are offering?

How many of those are offering a sliding scale versus a fixed fee?

People who differentiate themselves via specialized skill sets, particular forms of training, and a unique vision for their practice fare better than people who don’t.

For example:  I’m the only person in Austin who specializes in people-pleasing.  This is just another reason why establishing a niche and area of specialization is important.

In other words, your first job is to gather facts.

2.)  Different kinds of currency.

If you are an intern, you are playing with a couple kinds of currency.

The one that most people think of is money.  How much you charge for a 50 minute hour.

Most people make fees the starting point for negotiation to bring more people into their practice.

But don’t be too hasty.

If you are an intern, your clinical hours have several different forms of value.

In addition to earning money, you’re also trying to get clinical experience.  And you also have a life outside of work that is making demands on your time.

All of these factors will shape how you set your fee and whether you choose to offer a sliding scale.

Some of you may be in a hurry to complete your internship.  So you may offer some of your hours at a discount to clients in need, in exchange for knocking out a few more of your required internship hours each week.

Or, if you are working full-time at a mental health agency, you may have more hours than you can handle toward your internship.  And you may have only a few hours a week to work in a supervised private practice.  So you may establish your fee at a higher point, because of the premium value of those few, precious hours.

3.)  What can you afford?  What can your client afford?

Your fee should be shaped by your own financial bottom line.

You need to take an honest look at what you need to earn in order to make a living.

If you don’t have a healthy, sustainable source of income (whether from your practice or from other means)– it will be impossible for you to stay in business and assist your clients.

Setting a sustainable fee is part of a healthy boundary– a lesson in boundaries that many of our clients need help with in their own lives.

You must first establish what you need (financially, emotionally, logistically etc) to maintain a stable practice.

Then, let those considerations shape additional practice planning– where you work, who you see, what you charge.

So, if you wish to work with underserved clients, your fees will need to reflect their financial reality.

You may consider donating some of your time or setting modest fees.

Just be sure, particularly in a supervised private practice setting where you are offering a sliding scale, that you have something that documents their eligibility for that particular fee.

This is key if you offer a sliding scale.

One major point to consider if you choose to offer a sliding scale:  however you set your range, you need to establish a reasonable and fair system for determining what clients pay.

Many therapists use a fee chart that establishes fees relative to a client’s total household income.  This establishes some precedent that you aren’t just setting fees willy-nilly, and that you have a fair and stable system for determining what a client pays.

Tamara Suttle of Private Practice from the Inside Out wrote a great article about establishing a sliding scale.

Final thoughts:  balancing integrity with reality

In order to take care of others, you need a practice or job that first supports you.

Part of that support has to do with your income.

You may be reading this and saying,

“Being choosy about which clients I see sounds great in theory, Ann—but I have bills and student loans to pay.  I’m at an agency where I can’t choose who I work with.”

I hear you.

The fact is, desperation is a terrible place from which to build a business.

That’s why I recommend you get these other pieces in order as much as you can before trying to build a practice.

You are responsible for creating the kind of internship or practice that you want.  And if you don’t let your core values guide that process, it isn’t going to be pretty.

But even if you are in a holding pattern—at a job or practice based on necessity instead of your principled vision—I hope you’ll be thinking about the long term.

I hope that you have an exit plan:  I will do this job for ________ amount of time.

I hope that you continue to build your vision:  now I am learning about what I don’t want my own practice to look like.

And I hope you’ll realize that you can grow a practice before you even have one, by spending time now building your business skills and knowledge base.