Therapy Group Practice vs. Agency vs. Private Practice

Mar 21

Written By Canh Tran

Group practices are a good option for those who:

Want to have greater ability to make more money than in an agency setting
Want traditional benefits offered such as health insurance, time off, etc.
Want to provide therapy, but not deal with the administrative and marketing aspects of therapy such as returning emails and phone calls, marketing, advertising, etc.
Do not want to be business owners
Want to have a team of other people to work with and consult with (rather than working alone)
Who need more business, supervision, clinical, administrative, and ethical support
Who are more anxious, fearful, apprehensive about going into private practice

What Is A Group Practice?

A therapy/mental health group practice is a collective of mental health professionals who come together to offer a variety of therapeutic services to individuals in need owned by a lead therapist/director.
Often group practices are created to expand services to serve more clients with a specific value, skillset, and/or training.
Some group practices take on interns/student therapists to offer lower fee services and to mentor/shape/educate/train the next generation of therapists.
These services can include therapy, counseling, psychiatric medication management, and more, all provided by a team of skilled and specialized clinicians.
Some group practices only provide psychotherapy.

What is a W2 Employee?

Considered an employee
W-2 employees are typically eligible for a range of benefits, including health insurance, retirement plans, paid time off, and workers' compensation.
The employer usually withholds income taxes, Social Security, and Medicare taxes from the therapist's paychecks, making tax compliance simpler.
Often greater job security, as they are protected by labor laws, such as minimum wage and overtime regulations.
Employers usually provide a structured work environment, including set working hours and supervision.
May have less autonomy over their practice and patient load, as their employer makes decisions about scheduling and caseload assignments.
Might have less flexibility in choosing their therapeutic methods and approaches (group practice owner can dictate the approach, modality, specialties, etc.).

What is an Independent Contractor?

Independent contractors have more control over their schedules, caseloads, and therapeutic approaches. They can set their own hours and choose their clients.
Freedom to build their own practice and brand.
Responsible for handling their own taxes, including income tax, self-employment tax, and estimated quarterly tax payments.
While they may have more tax-related responsibilities, they can also take advantage of tax deductions for business expenses like office rent, supplies, and continuing education from their taxable income, potentially reducing their tax liability.
Do not receive employee benefits, such as health insurance or retirement plans, and must provide these benefits for themselves if desired.
They are not eligible for workers' compensation, so they need to have their own insurance coverage.

Typical Fee Splits For W-2 Unlicensed

Typical Fee Splits For W-2 Licensed

Typical Fee Splits For IC Licensed

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Agencies such as hospitals, schools, colleges, and community mental health clinics are a good fit for those who:

Want traditional benefits offered such as health insurance, time off, retirement fund, pension, etc.
Want to know exactly how much they will make annually
Want to work for a certain agency due to their history, value, reputation, etc.
Want to serve a particular population or presenting symptom
Want to work with the public and those underserved
Want to have a team of other people to work with and consult with (rather than working alone)

Those Who Tend To Thrive & Be Attracted To Private Practice

Valuing freedom and autonomy to make their own choices such as setting your fee, scheduling, time off, etc.
Valuing flexibility of working for yourself such as modifying your schedule, modifying your fee, taking as much time off as you want, working overseas, being 100% telehealth, being 100% in person, hybrid scheduling, etc.
Wants to work less and see less clients per week
Wants to make a desired income that is not offered in group practice or agency (e.g. six figures)
Comfortable with making variable income based on the seasons of the year (e.g. summer is slower so take vacation then, fall is busier so working more) and/or due to client cancelations
Comfortable talking about themselves and networking with other colleagues
Comfortable marketing themselves and telling clients who they help and what they help with
Does not like working for others
Embraces the challenges of being a small business owner
Enjoy the nitty gritty parts of business such as taxes, renewing licenses, etc.
And more

Canh Tran

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