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The current state (and future of) therapy in the U.S.

A brief history of therapy: How did we get here?

Depending on how far back you want to go, therapeutic advice was either provided by a local faith leader or village elder. In any case, the advice you received was heavily influenced by the experiences of the advice-giver, their view of the universe and one’s place in it. In prehistoric times, many tribal groups had someone in the role of a spiritual leader (often referred to as “shaman”) in order to provide answers and solutions to personal and group conflicts. It is from this first role that modern counseling, medicine, priests, professors, philosophers, poets and political prognosticators have risen from.

“The person of the shaman is a stand-out in the community where he operates. His services are sought out as a teacher, adviser, leader of sacrifice and healer or prophet and diviner. He is always within the circle of the leaders of the tribe when they deliberate on weighty matters
that affects the tribe; he is recognized to possess certain powers which he alone and no other has; when he shamanizes he puts on a certain costume which heightens his status; in life as well as in death his special status is recognized.” – Shaman as Psychologist

For example, if a patient had a personal struggle in these ancient times (in let’s say Greece), they would be told the appropriate myth relating to their situation. In this case, if one is lusting too much for power and wealth, and is feeling unfulfilled once they reach it, the story of King Midas will encourage a local notable person to develop a new emphasis on the smaller pleasures of life. Or perhaps, when overcome by grief, the bereaved may hear a story about the descent of Orpheus into hell to save his wife from the underworld.

The birth of modern psychology

Roughly 10,000 years later, after various spiritual solutions to diseases of the mind and soul, modern psychology was born in Vienna, Austria where Sigmund Freud, a neurologist, looked to connect the physical changes in our mind to psychological disorders. He did so while also mirroring questions of the soul with questions of the psyche. These actions created the field of psychoanalysis.

In addition, Freud created the first modern mental health clinic, in which he could study patients with all types of psychological struggles, suggest treatments, and then adapt future treatments based on these initial interventions. He did this while taking copious medical records along the way for future study.

The (often difficult) marriage of insurance and therapy

In the 1800’s there was no insurance for services like the ones that Freud provided; all of his clients paid in cash, and so tended to be from high income populations. Many of his early diagnoses reflect this fact, such as the “housewife’s neurosis”, in which wealthy women who could only derive meaning from cleaning the home did so compulsively. A Freudian psychoanalyst may relate struggles with relationships, grief or depression to issues in childhood (e.g. the old trope of a distant father and overprotective mother) that are impacting the unconscious mind.

Until the 1960’s, psychoanalysis was the primary method by which mental health therapy was provided. New developments such as the Jungian branch of psychoanalysis tried to relate the Freudian approach to older conceptions of the soul and lessons learned from ancient fables (tying it back to solutions provided by shamans). Other psychological traditions focused on a biological foundation for mental illness (positivism) rooted in chemical imbalances and genetics.

During the 20th century therapy remained mostly private pay (and exclusive to the wealthy). However, starting in the 1910s, insurance got involved in order to increase access to mental healthcare. The idea behind health insurance was that a few people will have major healthcare costs that they can’t cover alone, and we can’t predict who these people will be, so we would all benefit by sharing costs to reduce our individual risk of having to pay for a high cost condition on our own. Rather than one person paying a $100,000 bill for in-patient rehab services for 2 months, 1200 people can contribute $100 of their insurance premium to a pool of money, should they be the person who needs that service.

However, insurance companies operate on a profit motive: they want to charge as high premiums as possible (without making people forgo buying insurance) while paying out the least amount of money, thus maximizing profit. So if an insurance company can have 1200 people pay for premiums of $100 and can reduce the cost of treatment at the same time, they are increasing their profit.

The reason the insurance company can deny a claim varies. It could be that an insurance subscriber had a pre-existing condition, such as a diagnosis of depression 20 years ago. It could be that they found an omission on the insurance application (such as not noting a maiden name) just before they were asked to pay out, and can then legally deny the claim. The trick is to not do this too often, so that people don’t boycott your insurance program because they think that this will happen to them too when they need the money.

When you see an in-network-insured mental health provider such as a psychologist, you will receive care, and the psychologist’s office will submit a claim document to the insurer that includes a code detailing the service provided. Based on this code, insurance will reimburse a certain amount. Insurance keeps their reimbursement across networks equal for every provider. This is one way that they control costs; for a therapist to join and stay in their network, they have to agree to that payment amount.

Another way that insurance can deny a claim is if they require onerous paperwork from the provider that may take hours to complete. If the claim is for $120, the therapist may not want to spend 4+ hours pursuing the claim and would rather take the financial hit. It’s for this reason that more therapists than ever are refusing to accept insurance.

Insurance also has enormous power over what types of procedures are covered. For that reason, therapy interventions that can be evidence based (ones that are procedural and standardized across patient populations), such as CBT, are prioritized for reimbursement. Other therapy techniques like psychoanalysis are almost impossible to “prove” and therefore can’t be evidence based, so they are not reimbursed.

Insurance will only reimburse something that is medically necessary. The problem is that many of life’s difficulties, and the reasons why people seek mental health treatment, are not mental illness disorders and are not diagnosable. When this is the case, your medical insurance is not going to cover the treatment. Insurance will not cover “I am having a hard time” or “I am grieving a loss.” Read more at: Tampa Therapy

One of the first major initiatives to open up mental health to everyone came from John F Kennedy, whose sister had severe mental health issues that resulted in her being lobotomized.
With such a personal interest in adequate mental healthcare, Kennedy instructed the Federal Employees Health Benefits Program (FEHBP) to provide comprehensive support for mental health for everyone who qualified. In turn, medicaid and medicare in 1965 opened up psychiatric care to low income individuals. Feeling these pressures to compete, private practice insurance reimbursements increased for mental health through the late 1990s.

However, since the late 90s, insurance reimbursements (both state and private) have stagnated, while the bureaucratic work required of mental health providers has increased dramatically. This has set the stage for the state of mental health in America today.

The “business” of therapy today

We have come a long way from the simple cash-based psychiatry of the early 1900s. Now with so many moving parts and differing interests, the business of therapy has never been more complicated. Today, therapists face a larger number of threats to their independence than ever before.

Issues with insurers have escalated to the point where roughly half of all therapists in the United States don’t accept insurance at all. Specifically, about 55% of psychiatrists take insurance, according to a 2014 study published in JAMA Psychiatry. Around 60% of psychologists take insurance, and 60-70% of masters-educated therapists and counselors take insurance. Meanwhile, 93% of primary care doctors do, only highlighting the disparity between reimbursements for mental and physical health.

The providers that do accept insurance deal with constant headaches (e.g. spending 20% of their workday on hold with insurance, dealing claims denials, waiting over 24 hours to get a reply from insurance, if any).

Therapists that operate separate from insurance, reverting to the traditional “fee for service” model (private practice/private pay), find themselves in a different bind. They are competing for the same clients that are also attracted to the competing self-help industry with all of its courses, products, books, and workshops. This leads many therapists to switch to coaching in order to use the more unconventional tools that their therapy licenses restrict.

Self-help and coaching

In recent years, the coaching industry has moved more and more into providing virtual products, from online education modules to Facebook groups. These provide some benefit, but not nearly as much as the personal connection that one-on-one therapy with a licensed clinician provides. People often follow simple self-help strategies that only further internalize their personal struggles and prevent them from seeking the true growth that comes from individual therapy.

Big Tech

Many in the tech industry also see an opportunity to take advantage of this strange mental health market. Uberized service providers like TalkSpace and BetterHelp offer virtual products like email/text check-ins, paired with 1-on-1 therapy at rock-bottom rates like $60/week for one 30-minute session and unlimited communications with your therapist. That comes to about $40/hour going to the company itself, and roughly $15-25/hour for participating therapists. These “no benefit contractors” regularly talk about how difficult it is to maintain a decent quality of living while working for the site.

Low pay undermines not only the quality of life of the counselor, but also the quality of the service they’re able to provide. There are thousands of reviews by therapists that point out how difficult it is to have a decent connection with a patient when you are overworked and underpaid.

“Your myopic focus on creating and implementing technology-based features that are intended to automate therapy (and therefore increase your profits) are wholly untested in clinical practice and show a complete deficit in understanding about the therapeutic process and the necessarily strict and ethically bound guidelines that the discipline encompasses. You chose to conduct experiments on the public and with your subcontractors without any semblance of transparency or disclosure.”

The third path for therapists to try in order to avoid the pitfalls of coaching and big tech is to market themselves as an independent therapy practice. This too entails many dangers (as many know). Paying for a website can easily run up bills of over $4000 with web design companies with no guarantee of client bookings (typically just promises of “branding”). Marketing agencies offer to bring traffic to the website, but very few deliver on such promises (offering nothing more than grift).

Many therapists set up their own ad campaigns and blindly pay for them without having any idea how many clients (if any) these campaigns are bringing in. Most directories have membership fees, but they don’t explain how many (again, if any) clients are reaching you and booking through the site, all while ensuring your profile is lost in hundreds of results, never to be seen again (a fault of poor design).

If things continue like this, it’s very likely that therapists will graduate from school and only see job postings for these uberized services (imagine people looking for taxi driving jobs today). The few that don’t take these (seemingly only) options will try to start their own private practice, but they’ll see little demand, because consumers are demanding low prices that they can’t provide as a single-provider private practice. Down the road, this can turn into a race to the bottom, where consumers get rock bottom prices, but poor quality service.

So what is a therapist in this situation to do? (Assuming they didn’t luck out with a good visibility provided by good marketing people around them.)

What the future holds for private practice

Any therapist wishing to grow their clientele clearly faces many obstacles. What is their best bet to get clients at a reasonable price, while maintaining their clinical independence? This is exactly the question that our team at Thrivelution was mulling over. Our co-founders saw how bleak the future was for private practice therapists and came up with a solution: Thrivelution, a clinical matching system for therapists.

Colleen, Greg, and Josh understood that the only way to stand out in the forest of quick fix solutions to the mental health market was to provide a quality matching system with clinical validity (something yellow pages-style directories like Psychology Today fail to do). So, we scoured article after article about what makes therapy work and built our algorithm around that science. We also understood that copying other firms and using a matching system only within a few in-person practices doesn’t fix the existential issues that therapists face today.

The biggest factor that makes therapy successful (that can be controlled) is the quality of match between therapist and client. We understand that, and that’s why we have developed grading criteria that can help clients understand the quality of the therapy match before they commit to therapy. Not only will this save time in the therapy seeking process, but it can also lead to better clinical outcomes for those who use our service.

In short, Thrivelution connects therapists with clients in an extremely efficient way while also preserving the clinical independence that makes therapy successful. We have created a platform where therapists stop competing with each other (driving marketing costs up) and instead work together to preserve private practice therapy and in doing so, benefit clients. If you are a private practice therapist or are looking for a quality therapist yourself, it’s time for you to join our Thrivelution!


Colleen Hilton CO-FOUNDER &
Colleen Hilton is the founder & CEO of Acuity Counseling, and a licensed Marriage & Family Therapist with over 14 years of... Read More
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