Where to Start a Private Practice: Using Mental Health Shortage Data

The shortage is real, and it is measured

The shortage of mental-health providers is not anecdotal — it is officially tracked by HRSA through Health Professional Shortage Areas (HPSAs). As of late 2025, there were about 6,807 designated mental-health shortage areas nationally, only roughly 27% of the need was being met, and an estimated 6,800 additional practitioners would be needed to close the gap.

For a therapist deciding where to start or grow a practice, that is the clearest public signal of where demand for care outstrips supply. See how your state compares with the free mental health shortage by state tool.

How to use it to choose a location

Shortage data answers a question every new practice owner asks: where is the need? Use it to inform:

• Telehealth reach — if you are licensed to see clients across your state, you can serve high-shortage areas without relocating.
• Where to open or expand — a high-shortage, high-severity area means clients are struggling to find care.
• Mission-driven and sliding-scale work — the places that most need accessible pricing are often the most underserved.

Severity matters as much as count: each HPSA carries a score from 0 to 25, and the tool shows your state's average alongside the number of designations.

The honest caveat: access need is not cash demand

Here is the limit, stated plainly. HPSA status reflects overall access need — and that need often correlates with Medicaid and lower-income populations, not with the ability to pay $150–$200 a session out of pocket. A high-shortage area is not automatically a strong private-pay market.

So shortage data tells you where care is needed; it does not tell you where cash-pay clients are. For a private-practice decision, weigh it against local household income. The strongest opportunity is usually where high need overlaps with the capacity to pay — and where competition is thin.

Put the pieces together

A location decision is one input among several. Combine the shortage map with the rest of the business picture:

• Check what therapists earn in your state as a floor.
• Set accessible pricing where need is high with the sliding-scale calculator — and read how to set a sliding scale fairly.
• Browse all the free tools for private-pay therapists.

This article is for general informational purposes only. HPSA designations reflect access need and are not a measure of private-pay demand; source: HRSA.