Author: Benjamin Lyons, DBA, MACG, MAEd

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In the United States, the cost of an individual therapy session averages over $200 while the average cost of adult psychological testing services is an eyewatering $2,080. The reasons behind these high costs are many and complex. However, from my perspective, they can be boiled down to three key challenges: the cost of training / education, the perverse incentives of health insurance, and professional turf battles via billing codes. 

1. Cost of Training / Education

Most mental health providers in the United States are "master's level" providers. Many are mental health counselors, clinical social workers, or marriage and family therapists. All three professions require a 2-3 year graduate degree program. The total direct costs for these degrees average between $30,000 and $60,000 at a public institution or up to $100,000+ at a private university. The direct costs of my Master of Arts in Counseling & Guidance was around $48,000 at a public research university, with indirect costs of over $50,000 in lost wages. Master's students are generally not eligible for federal grants and very few receive significant scholarships. Most pay for the degree either out of pocket or with student loans. In particular, many rely upon loans when working as student-providers without pay since most healthcare programs require unpaid clinical internships or rotations. For my degree, I spent two years as an unpaid student-practitioner in community health settings. 

Following graduation, most neophyte providers must pay to take a licensure exam and everyone pays to apply for licensure itself. This process is usually unwieldy and can take months before someone can actually start using their training to earn a living. Following initial licensure, master's-level providers must spend two to five years practicing under (and paying for) the supervision of a more senior clinician before paying to test and apply again for full licensure. 

In round numbers, the median wage of a mental health counselor in 2023 was just shy of $26/hour. That's a couple dollars less than a HVAC technician ($28/hour), or physical therapy assistant ($30/hr), and a few dollars more than a retail shift manager ($22/hr) or forklift operator ($24/hr). This is not to suggest any of these other jobs are unimportant or unneeded. However, none of them require a master's degree. This is all a long way of saying that most mental health providers make relatively modest wages given their level of education and how expensive it was to get. Pursuing a career in mental health has high barriers to entry in terms of both direct (e.g. tuition, textbooks, etc.) and indirect costs (e.g. lost wages). Even for those able to surmount these hurdles, many still have to take on substantial debt in order to do so. The burden of repaying this debt ultimately falls upon patients as providers work to repay their loans and make-up for lost wages in addition to covering the on-going costs of living.  

2. Perverse Incentives 

     A "perverse incentive" describes an economic incentive that leads to an unintended or even harmful result. The current private health insurance system presents perverse incentives to providers and insurance carriers alike which end up driving up costs despite of the stated intention of insurance to make healthcare more affordable. For insurance providers, it is in their financial interests to minimize costs and maximize revenue just like any other commercial enterprise. On the patient / client-side, that means being denied access to healthcare, even care that is legitimately needed (Miller et al, 2024; Bennett, 2020; Hogland, Yu, & Horny, 2024). Clients are the victims of a perverse incentive for insurance providers to maximize their revenue at the expense of those providing that revenue - their customers.  

On the provider side, to keep down costs, health insurance companies refuse to pay the full amount billed for any service. Instead, they offer healthcare providers a percentage of the "usual, customary, and reasonable" (UCR) fee rate for any particular service. For example, in 2023, several major private insurance carriers in Illinois offered between 53% and 70% of the total fee billed for a service depending upon the provider's credentials, the nature of the service, and the client's insurance plan among other factors. Therefore, knowing they will only receive a percentage of what they bill to insurance, providers and provider groups have a perverse incentive to push the UCR rate as high as possible in-order to maximize the payout from the insurance carrier. This has the effect of driving up costs generally for all clients / patients, regardless of how someone pays for care.

3. Billing Codes, Market Manipulation & Turf Battles

When providers bill insurance companies for services provided to clients, providers must use one or more "Current Procedural Terminology" or CPT codes. These codes identify what service was provided, how how long it took, potentially the credentials of the person who provided it, and must be medically justified by the patient or client's diagnosis. Each code may have a different reimbursement rate and figuring out which codes to use when has created an entire industry of coding and billing specialists. Paying these professionals as intermediaries between providers and insurance to navigate a unnecessarily complicated process creates an additional operational cost that is passed on to patients/clients.

     Additionally, CPT codes are a registered trademark owned by the American Medical Association (AMA). Every provider using CPT codes to bill an insurance carrier pays a percentage to the AMA. The AMA is the nation's largest physician professional organization, representing 1 in 4 medical doctors in the United States as of 2022. It is not in the financial interests of their membership to increase the number of providers who can bill insurance for assessment services and in so doing "dilute" a potential income stream for those members. And as it happens, there are no scoring / reporting CPT codes for master's-level mental health providers. Scoring, interpreting, and then formally reporting diagnostic data is often time-consuming, highly detailed work that requires a high-level of training and practice. As a result, few master's level folk provide assessment services for lack of billing codes to get paid appropriately - billing codes controlled by another profession's biggest lobbyist. Lack of codes that reflect a provider's diagnostic authority artificially limits options for clients/patients, driving up costs and wait-times.

    The authority of master's-level mental health providers to diagnose mental health disorders is explicitly defined by law in most states and implicit in our authority to define medical necessity to insurance carriers. While some assessment tools are limited to "doctoral-level" providers - many are specifically designed to be administered and scored at the master's level. Our professional ethics (and our licensure boards) expect us to be "evidence-based" in our practice. Utilizing formal evaluation practices (with appropriate tools, training, etc.) to inform our diagnostic decisions is evidence-based practice in the most literal sense. To suggest we should wield independent diagnostic authority but not be allowed to collect and interpret data to guide that authority seems indefensible on its face.    

   Given our duty to be evidence-based in our diagnostic practices, why Purple Wellness providers complete training in assessment, diagnostics, and psychological testing well beyond that required for licensure. In an effort to make services more accessible, we offer a sliding-scale discount based on client income and employment status. In the near future, we will also look forward launching the Phipps-Sollo Graduate Fellowship to train new master's-level providers to do this work while offering financial support to them while they serve as trainee-providers. Say no to unpaid internships and artificial turf-battles.