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Dynamic Pricing and the Business of Psychotherapy

It is said that no one becomes a psychotherapist for the money.  And indeed, psychotherapists as a group earn far less than many others with similar levels of professional training and experience.  As a psychiatrist who worked as a psychotherapist for over thirty years, I was keenly aware of how my income was a fraction of that of most of my medical colleagues.  But being committed to a profession that offers more modest incomes doesn’t mean we are powerless to find ethical ways to expand those incomes.
 
Ours is a noble profession, and we rightly take pride in providing understanding and compassion to those we treat.  But if we allow ourselves to be deluded into believing that somehow we are “above” being a business, we do ourselves a profound disservice.  Are we truly nobler than the plumber who races over to a customer’s house in the middle of the night to repair a broken pipe, or the car mechanic who stays late working on a car so a customer won’t have to delay a family road trip?  Practicing psychotherapy is indeed a business, and to deny this is to deny ourselves the opportunity to think like a business person and incorporate conveniences and efficiencies that enhance income and improve the service.  One of those efficiencies is dynamic pricing.
 
Increasingly, services today no longer have fixed fees but rather fees scaled to a myriad of different factors.  The cost of a ticket to a professional baseball game is now based on when the ticket is purchased, who the home team is playing, how many tickets for that game have already been sold by the time of the purchase, etc.  Similarly, airlines adjust their charges literally minute by minute for seats on any given flight based on when the purchase is being made, current seat availability, competitor’s fees, etc.  Even many restaurants charge different prices for identical menu items based on the time of day of the purchase.  This is dynamic pricing and it is rapidly expanding from one industry to the next. 

For mental health professionals, good 'practice management' could easily incorporate dynamic pricing features as well. Let's say you have the power to set your own fees and aren't constrained by contractual agreements ( e.g., with health insurers).  You charge for procedures based on some hourly rate. But you're also likely to charge higher fees for so-called emergency calls, which take place after hours.  If you place a premium on selected hours in which you deliver service, you're already using dynamic pricing!

So, would there be anything wrong with setting a higher fee for providing treatment on, say Sundays? How about at 10:00 pm?  Or setting a lower fee to fill that hard-to-fill time slot in your schedule?  Similarly, one might capture more profit by charging a different rate for a “package” of prepaid sessions, where fee collection is simplified and guaranteed.  Provided that you make it clear in advance that these are the fees attached to those hours, you can ethically deliver the same compassionate care AND improve your profit.  While far from commonplace in healthcare, dynamic pricing would facilitate the business end of psychotherapy; increasing income and making fees more aligned with the specific needs of each patient.

Steven Field, M.D.
 
 

Posted by: AdminOctober 10th, 2017 Share