About This Guide
Congratulations! You’ve worked hard to finish your degree, and you can now look forward to working as a licensed psychologist. A huge accomplishment, to say the least.
While school, internships, and post-docs prepare us for clinical work, they don’t do such a great job preparing us to make decisions about our career path. When I was looking into job options, I remember being confused by almost everything — from how practices were organized, to how taxes worked.
I wondered why no one had ever explained my options in detail. I had no idea about the pros and cons of all the different types of opportunities out there. This made it hard for me to find the right fit, and I found myself working unhappily at several different jobs before I started Azimuth.
My experience has taught me the value of starting down the right career path from the very beginning. It’s essential to be in a setting that fits your personal needs and desires, whatever those may be. While I learned the hard way by taking (and leaving) a lot of jobs that weren’t ideal for me, you don’t have to repeat my mistakes.
I am hoping that, by sharing an overview of the most common employment options and walking through the pros and cons of each, I’ll be able to help you make an excellent choice for yourself based on your own individual circumstances. And of course, if you're looking for psychology jobs in the Boston area, feel free to reach out to us for further information and advice!
Dr. Janna Koretz
Founder, Azimuth Psychological
Table of Contents
- Starting Your Own Private Practice
- Working in a Hospital
- Joining a Group Practice
- Questions to Ask a Group Practice
Starting Your Own Private Practice
Having your own private practice is often showcased as the ultimate dream. Seeing clients on your own terms, doing great work, making a nice living; what could be better, right? While there are certainly advantages to having your own private practice, there are also a lot of hidden risks and downsides that don’t often get discussed.
Advantages of starting a private practice
Flexible scheduling. When you work for yourself, you get to make your own schedule, which can be very helpful in terms of work-life balance.
Collecting full fee. You keep whatever you make (as long as you can collect it), and don’t have to share with an employer.
Choosing your rate. If you are accepting private pay clients, you’ll be able to choose to see them for whatever price you’d like. This doesn’t apply if you choose to take insurance, which sets the rates that you are required to accept for each type of session.
Trying new techniques. Want to start learning hypnosis to use with your clients? No problem! There are no restrictions about what you can and cannot offer your clients, as long as you follow ethical and legal standards.
Freedom to decorate. If you truly have your own office space (you aren’t subletting, for example), you have artistic freedom to buy the furniture and artwork that best resonates with you and your clients.
Disadvantages of starting a private practice
Overhead costs. As a sole owner of a business, you’ll be responsible for paying for all of the things you need to run your business including (but not limited to):
- Malpractice insurance
- Commercial insurance
- Legal fees
- Office space
- Office supplies
- Website design and hosting
- Administrative support
- Directory listings
- Credit card processing fees
- Phone and fax lines
- Clearinghouse to process electronic claims
Choosing which company to use for each of these categories can be confusing, and ultimately it will cost you quite a bit for these necessary overhead items. The overhead costs are also fairly fixed, so you won’t pay much less if you see fewer patients — meaning that you might find yourself taking cases you’d rather not, just to keep up with the bills.
Accounting and bookkeeping. If you are self-employed, you will need to file and pay quarterly taxes on your income. For tax purposes, you’ll also need to track all your income and expenses carefully, or pay a bookkeeper to do so. This adds up to a lot of paperwork and lost time every month.
Self-employment tax. Since you work for yourself, you will be subject to “self-employment tax” to support Social Security and Medicare, which comes to an additional 15% of your income above and beyond what you may owe for income taxes. Employers are required to cover half of this tax for their employees, but since you are both employer and employee, you pay it all.
Health insurance. You will need to find health insurance for yourself. If you cannot get it through a parent or spouse, your purchase of health insurance will be costly, and not pre-tax.
Isolation. Many clinicians who work for themselves complain of feeling isolated and not having a sense of community, even when they make the time to participate in supervision groups. When you work by yourself, it can also be difficult when faced with hard cases, which will leave you to worry about these clients without support.
Collecting money. Unless you want to spend a lot of your time on the phone, hiring a medical billing practice or an administrative assistant to collect lost and wrongfully denied funds from insurance companies is a must. While these services are very helpful, they also cost money and inflate the total overhead you have to pay. You will also be responsible for collecting from clients who have outstanding copays and bills, and will often find yourself stuck with an awkward choice between seeing them without being paid, or refusing to see them until their payments are up-to-date.
Finding clients. Going out on your own can be risky, because if you can’t market yourself well, you may not make any money. Marketing is harder than it seems, because it is very hard to really differentiate yourself from other clinicians.
Working in a Hospital
There are many different positions available in hospitals. You could be working in an outpatient, inpatient, intensive outpatient, or specialized clinic setting. Your role could include not only short-term therapy, but also crisis management, group organization, and case management, depending on the environment.
Advantages of working in a hospital
Prestige. Especially in cities like Boston, New York, and San Francisco, certain hospitals are considered highly prestigious. If it’s important for you to work for an employer with a name your friends and family will recognize, a hospital environment might be a good fit.
Low risk. Your paycheck from a hospital will likely be very steady and reliable. Hospitals are usually overbooked with patients, so you are unlikely to spend time waiting around while your caseload fills up. And, when your clients no-show or don’t pay their bills, you usually get paid anyway.
Tax and benefit advantages. As a full time “W2” employee your taxes will be withheld, which means you don’t need to deal with paying quarterly taxes yourself. Your employer will also contribute half of your payroll taxes (Social Security and Medicare), which can really add up.
Large employers like hospitals are also required to offer health insurance to their full-time W2 employees, and will cover at least 50% of your cost. Your contribution (if any) will also be pre-tax, so you save even more money.
Disadvantages of working in a hospital
Intensive and rigid scheduling. Often in hospital settings, you’ll have a packed schedule that requires you to see a very large number of clients. And, since there isn’t usually time built into your schedule to catch up on necessary paperwork, you’ll often have extra work to do at the end of the day, or to take home.
Lower take-home pay. Many hospitals do not pay well. Between benefits and prestige, they can generally recruit enough talent, even at low pay rates.
Red tape and politics. Hospitals are huge bureaucracies, so it can take a long time for anything to be approved. Rules that are ineffective or inefficient may impact your clinical work, and you won’t have much recourse.
Highly medicalized. Hospitals require that you complete your clinical work within a strict medical model, which can dictate very specifically what kind of interventions you can use, how long you see clients, and how clients are treated and conceptualized. The reliance on a medical model also tends to result in a very specific political hierarchy among staff (with psychiatrists and neuropsychologists usually considering themselves at the “top”), which can be difficult to navigate.
Case management. Within the context of your work, you may find yourself doing more case management or acute crisis management, as opposed to short- or long-term therapy work.
Supervision time may be limited. While hospitals can have rounds, true didactics or group supervision can be difficult to come by. If it is available, you’ll usually have to sacrifice client, break, or administrative time to participate.
Joining a Group Practice
There are a variety of practice models that may be called a “group practice.” They’re very different from each other, so be sure you know which one you’re looking at!
The Co-op Model
Clinicians work in private or shared offices using a common waiting room. They contribute to shared expenses, such as rent, while marketing and operating their practice as a private individual. This arrangement has similar advantages and disadvantages to a private practice, with a few key differences.
Camaraderie. Even though you’re all working for yourselves, co-ops often host after-work gatherings for the clinicians who work there. This can be a good way to avoid the isolation that can come with running a private practice.
Less flexibility. If you’re sharing an office space, you may not be able to flex your schedule as much as you could in a private practice, as there may not be office space available when you need it. You also may not be allowed to decorate a shared space as you see fit.
The Partnership Model
Clinicians operate as partners under a single company name. The company will generally have its own website, and will distribute referrals to each partner based on availability and fit. Partners may split income evenly, or may distribute it based on the revenue each partner has brought into the practice.
Help with the business side. Working under a larger partnership can be easier and less risky than striking out on your own, especially if you don’t have any familiarity with business skills, like marketing and operations.
Highly co-dependent. If you become a partner, you will rise and fall with the success of the practice. This can lead to stress and recriminations, especially if some partners feel that others aren’t doing their part to bring in referrals for the group. For this reason, partnerships usually only bring in individuals who are already highly trusted and known to the existing group.
The Group Model
Also known as an “employed clinician practice,” clinicians are full-time or part-time employees of the practice. Clinicians don’t pay any direct expenses (and may in fact have personal expenses, such as CE credits, reimbursed by the practice), and receive regular paychecks based on the payment policies set by the practice owner.
Minimal administration and overhead. All expenses and most administrative tasks are taken care of by the practice owner.
May offer benefits. Some group practices offer benefits, such as health insurance, to their employees. This is far from universal, however, so if getting health insurance through your employer is important to you, make sure you ask about what is offered, and how you can qualify.
Tax advantages. Similar to working in a hospital, your personal taxes will be lower in a group practice than they would be if you were self-employed. That’s because your employer is required to pay half your payroll taxes out of their own pocket.
Camaraderie. Often the practice will promote community events, such as lunch or out-of-office socials. Group supervision or consultation will also generally be available to you.
High patient load. Often, groups require extremely high productivity rates to qualify for “full-time” benefits, which can eat into planned time for group socializing or supervision. You may end up seeing up to nine clients back-to-back, and then leaving for the day without running into any of your colleagues.
Scheduling can be inflexible. While you may have some say in your initial schedule, it can be difficult to change your hours within a group setting, especially if you are sharing an office with another clinician.
Aesthetic decided for you. If you work for a group, the decor is often entirely determined by the practice owner, so you might not be able to decorate your office as you see fit.
Take the clients you are given. In general, the practice will not allow you to turn down your assigned clients for any reason besides a lack of clinical appropriateness — that is, you believe they need a type of care that you are unable to provide. While you can express an interest in focusing with a certain patient population (such as children), it is far from guaranteed that the practice will be able to fill your caseload with clients matching your preferred profile.
Questions to Ask a Group Practice
There are many nuances of the group practice world that you won’t know when you’re applying for jobs. I’ve listed out the top five questions you should ask when interviewing with a group practice where you would be considered an employee (these questions don’t apply to co-ops or partnerships).
How will I be classified?
Some group practices, knowingly or not, may shift their tax burden onto you by misclassifying you as a contract worker instead of an employee.
When you begin a job, you will either be classified as an employee (filing a W2 IRS form) or a contractor (filing a 1099 IRS form). In many states, Massachusetts included, there are very strict rules about who can be considered a contractor. It is cheaper for companies to hire contractors instead of employees, because the burden of payroll taxes falls entirely on the contractor.
As a general rule of thumb, if you are doing the same type of work as other members of the company, no matter how little time you are there, you likely should be classified as an employee. For example, if you worked 15 hours at a group psychotherapy practice as a therapist, you should be classified as an employee, despite your part-time status.
But what if that same therapy practice brings you on as an outside testing specialist to help with occasional complex diagnoses? Now you are doing a specialized job outside of the main work of the practice, and it may be appropriate to classify you as a contractor — especially if you set your own hours, accept and decline patient assignments at will, and bring your own testing materials.
If a group practice is trying to hire you as a contractor, review your state’s employment law, or consult an employment lawyer. The law is there to protect you, so don’t be afraid to look out for your own interests!
When and how will I be paid?
While practices are supposed to pay you at the end of the pay period when the work was done, some group practices will withhold payment to their employees until after they are paid by insurance. Insurance issues can sometimes take weeks or even months to deal with… and sometimes are never resolved at all.
Similarly, some practices pay their clinicians monthly, or even less frequently than that, as opposed to every two weeks. Be sure you know when you’ll be getting paid, and under what circumstances.
What is the formula behind my pay rate?
Any good practice should have a very specific formula for calculating your pay rate. This may be based on seniority, number of clients seen, or average billing rate. While they may not be able to tell you every single detail that goes into this formula, you should be able to get a good sense of why your pay is what it is.
Is group supervision mandatory?
Many practices advertise group supervision or social time, but in reality it never materializes — clinicians schedule sessions over it, or don’t come in to the office that day if they don’t have clients to see. Practices that are serious about providing group supervision will make it part of the conditions for employment, for the benefit of the group.
What is the process for insurance credentialing?
Insurance credentialing is free and easy to do. The information is also easily accessible on insurance providers’ websites. Groups may entice potential hires by saying they’ll help with credentialing, and even “pay for it,” when there is nothing to pay for. If this is being offered to you, make sure you clarify what they mean by it.
Remember, goodness-of-fit is essential in a workplace. Don’t be afraid to ask questions to make sure a potential job is a good fit for you!