(888) 435 8206 GET STARTED

# Disadvantages of Operating a Private Practice on Hourly Rates?

Susan Day
0 Comments
June 02, 2017

## Disadvantages of Operating a Private Practice on Hourly Rates?

When establishing your private practice it is worth studying the different models available to see which one works best for you.

One successful model reimburses therapists on an hourly rate basis.

By offering your therapists an hourly rate you are guaranteeing them a monthly income. As well, you are saying they will be paid regardless of any issues with insurance claims or client payments. It is a great model for further enhancing your trust and reliability.

However, there are some drawbacks which you need to aware of.

Disadvantages of Operating a Private Practice on Hourly Rates?

## The Hourly Rate: Is it Fair?

When you really examine what the 50% rate of pay is for a practice that takes all different kinds of insurances, it’s really sobering. The hourly rate may not be as much as first thought.

It’s important to give clear examples of what a therapist should be expected to be paid? While an hourly rate is fair in many respects, some who choose to go to practice actually get paid less. This is because the percentage that they were going to get “sounded” like more than other reimbursement models.

Reimbursing Therapists Upfront

## Paying Therapists Upfront

Probably the biggest disadvantaged private practices owners face when utilizing the Hourly Rate Model is that they are required to pay their therapists before they receive any income.

This means that there needs to be enough money in the bank to cover their wages each month.

In heavy periods of growth this can make things difficult as clinicians have to paid greater sums before the pay comes in from the insurance companies.

However, if you have solid accounting practices then these waves won’t put too much stress on your practice.