PhD/PsyD Part-time private practice - how much can I earn?

[PsyDSoccerMom]

This is to all the licensed psychologists out there. I will be fully licensed in the next 1-2 months (passed the EPPP and taking the state ethics exam next week) and am contemplating private practice work.

I have worked as a psychologist in corrections (under supervision) for the last 8 years. According to my supervisors, they will promote after I'm licensed bringing me up to around $85,000/year. While this is exciting news, I am wondering what my earning potential would be if I worked 20-25 hours part-time in private practice. I realize is dependent on a variables such as marketability and need in my area. I live in a very populated metro/suburban area. My area of specialization would be with adolescents, delinquency, female issues, and trauma. I would look to go part-time at my current job if they allow me. Even though it has been a dream of mine, would hanging a shingle be worth the effort?

Decisions, decisions. Looking for some insights from those of you in private practice or are practicing part time. Thank you in advance for any advice.

---

Members don't see this ad.

 

[erg923]

This is to all the licensed psychologists out there. I will be fully licensed in the next 1-2 months (passed the EPPP and taking the state ethics exam next week) and am contemplating private practice work.

I have worked as a psychologist in corrections (under supervision) for the last 8 years. According to my supervisors, they will promote after I'm licensed bringing me up to around $85,000/year. While this is exciting news, I am wondering what my earning potential would be if I worked 20-25 hours part-time in private practice. I realize is dependent on a variables such as marketability and need in my area. I live in a very populated metro/suburban area. My area of specialization would be with adolescents, delinquency, female issues, and trauma. I would look to go part-time at my current job if they allow me. Even though it has been a dream of mine, would hanging a shingle be worth the effort?

Decisions, decisions. Looking for some insights from those of you in private practice or are practicing part time. Thank you in advance for any advice.

Insurance? Cash? Contact work? What your office rent? Supplies?

Do not underestimate how adding 4 hours to every work day and/or weekends will effect you and your family? Is it really worth it?

There are other ways to make better money with less labor and time in this field, IMO

 

[PsyDr]

Not as much as you think. It's highly dependent on your office rent and overhead which will be higher than the 35% rule of thumb because you are in part time practice. Say you find an office that goes for $1k/month with NNN, you'd have to see about 13pts to break even a month if they are cash. If they are insurance based you're looking at around 17pts/month plus you have to hire billing to handle the inevitable rejections because you are not going to have enough time to sit down, look through each eob, and refile. And you'll need a collections agency.

As for startup capital. First you'll need an attorney for LLC formation, and legal zoom isn't going to do it. I spent around $1k per LLC. You'll need office insurance (500-1k/yr), unless you are incredibly stupid and willing to self insure against a slip and fall, a computer or three (~2-4K), software(700), some furniture (2k), a phone system that you can remotely access or a virtual secretary that is hippa compliant, and you're looking at at least 8k in startup. Add in another 3k if you're testing. If you're going for cash pay, all of these numbers are about 40% higher because nicer office commands higher respect and therefore demand. For example, the big name analyst I saw for a while had Roche boboise chairs and sofas, which run around 10k per sofa. Keep in mind that most commercial real estate requires you to personally guarantee the rent for a minimum of three years, so there's no saying your LLC is bankrupt and walk away.

 

[smalltownpsych]

If you were really working 20 to 25 billable hours a week, then you could make money at it, but I work full-time and average about 30-35 patient hours per week and this is with all office stuff being handled for me by support staff. A better option could be seeing if an existing private practice is willing to take you on. In the town where I did my internship, I had an offer to that for 70% of the billing receipts and they handled all of the overhead and it included staff support. Several other local psychologists who worked full-time at other locations would share some office space there for extra cash.

 

[Therapist4Chnge]

A better option could be seeing if an existing private practice is willing to take you on.

This is the way to do it if you aren't looking to go FT.

 

[deleted343839]

I have worked as a psychologist in corrections (under supervision) for the last 8 years. According to my supervisors, they will promote after I'm licensed bringing me up to around $85,000/year. While this is exciting news, I am wondering what my earning potential would be if I worked 20-25 hours part-time in private practice.

20-25 billable hours/week is pretty close to full-time practice.

 

[erg923]

20-25 billable hours/week is pretty close to full-time practice.

I think they only plan on working 20-25 hours, though. Obviously, not all those are going to be billable. It not clear to me if OP has/had insight into this fact.

 

[smalltownpsych]

Based on what I do with lots of support, including call reminders to increase show rate and a waiting list that staff will call to fill in cancels. I would have about 16 billable hours for a 20 hour week. Without the support, that could easily drop to less than that. Another point is that when my schedule is full and I start to experience fatigue, then I start losing patients. My success relies on me being on my game. I know this from the direct experience of pushing myself right to the limit and having a record revenue month followed by my two lowest months. I really cannot fathom working just about any full-time job and then trying to do anything more than four or five extra patients a week to be honest.

 

[deleted343839]

I think the OP was talking about going part-time at the current job and adding on part-time practice. That's ambitious but more realistic. Three days a week at the "day job" and two in a PP office could work, though that would still fall short of 20-25 hours.

I have friends who have made reasonable incomes in part-time private practice. They wanted to spend more time with their kids while their spouses worked full-time. They both had some sort of cost-sharing arrangement with other therapists in an office suite. One takes cash only and the other mostly does cash and contract work.

 

[smalltownpsych]

I think the OP was talking about going part-time at the current job and adding on part-time practice. That's ambitious but more realistic. Three days a week at the "day job" and two in a PP office could work, though that would still fall short of 20-25 hours.

I have friends who have made reasonable incomes in part-time private practice. They wanted to spend more time with their kids while their spouses worked full-time. They both had some sort of cost-sharing arrangement with other therapists in an office suite. One takes cash only and the other mostly does cash and contract work.

That would make sense to do two part-time gigs, but from the 85k for a newly licensed psychologist part, I assumed it was full-time at the prison.

 

[PsyDSoccerMom]

Yes, my position is full-time but may seek to drop down to part-time in a couple of years. I'd still keep the majority
of my benefits: health insurance, pension, but have prorated vacation/sick time. While the income is guaranteed/steady,
I'm a little tired of working for an institution. I do like the ideas presented above regarding working part-time for
an already established practice where support is built in. There have been some job postings in my area looking for
a part-time psychologist to join a group practice. Maybe I should start there and get my feet wet. I am also thinking
about linking up to my state's child welfare agency to do some contract work.

I just passed my state's jurisprudence exam this week so I'm excited about the options after all these years of working
under someone's supervision. Thank you all for your experiential advice.

 

[DrMikeP]

Depends on you... If you are good a rule of thumb is an income of about $100/pt hour on avg in major cities (that accounts for no-shows, cash, ins reimbursement, business costs, etc) if you have an even mix of insurance and full paying cash. It takes marketing time to fill a schedule and knowledge of how to run a business. You should find a successful psychologist and work with him/her for a year and learn everything possible. Your overhead can be just the cost of renting space if you learn to do insurance billing (that can be submitted for free), scheduling, etc yourself. So 10 pt hrs a week can give you $1K/wk in the right area IF you are good at what you do.

 

[PsyDr]

Depends on you... If you are good a rule of thumb is an income of about $100/pt hour on avg in major cities (that accounts for no-shows, cash, ins reimbursement, business costs, etc) if you have an even mix of insurance and full paying cash. It takes marketing time to fill a schedule and knowledge of how to run a business. You should find a successful psychologist and work with him/her for a year and learn everything possible. Your overhead can be just the cost of renting space if you learn to do insurance billing (that can be submitted for free), scheduling, etc yourself. So 10 pt hrs a week can give you $1K/wk in the right area IF you are good at what you do.

If anyone is curious about how accurate this advice is, I would encourage you to look up the going rate for an hour of psychotherapy, the median no show rates, what nnn is, the costs of everything it takes to run an office like phone lines/internet/office furniture, insurance for both malpractice and for general office coverage, etc.

You'll note that none of the above has anything to do with how good you are at what you do.

 

[50MinuteHour]

This is to all the licensed psychologists out there. I will be fully licensed in the next 1-2 months (passed the EPPP and taking the state ethics exam next week) and am contemplating private practice work.

I have worked as a psychologist in corrections (under supervision) for the last 8 years. According to my supervisors, they will promote after I'm licensed bringing me up to around $85,000/year. While this is exciting news, I am wondering what my earning potential would be if I worked 20-25 hours part-time in private practice. I realize is dependent on a variables such as marketability and need in my area. I live in a very populated metro/suburban area. My area of specialization would be with adolescents, delinquency, female issues, and trauma. I would look to go part-time at my current job if they allow me. Even though it has been a dream of mine, would hanging a shingle be worth the effort?

Decisions, decisions. Looking for some insights from those of you in private practice or are practicing part time. Thank you in advance for any advice.

Like others have suggested, a lot of it depends on your overhead/expenses, and whether or not you are accepting insurance reimbursement rates or setting your own cash fee. For a part-time practice, the most savvy thing to do would be to sublease a furnished office ($10/hour is the average rate), accept insurance (at least initially, so you get more referrals), and have a private rate.

Let's say you only do a half day (4 hours) once a week and see 3 clients a week on average because 1 no-shows or cancels, and let's say they are all being reimbursed by an insurance rate of $80 per session. Your income for a four-week month is $960, and after $160 in office overhead your profit is $800. You have to pay roughly 40% of this profit in taxes, so that brings your monthly income after taxes to just $480.

Basically, you'd pocket an extra $5k a year for doing a part-time practice like this. Like another poster said, ask yourself if it's really worth it. Unless you are able to get cash clients, I think a job offering like the one you already have seems more attractive than taking on the additional work of private practice. But that's just me. I think private practice works best when you're able to maintain low overhead (e.g. practicing out of your home) and get at least some cash clients who pay a higher fee. When working exclusively with insurance, your overall earnings can be rougher than you would anticipate. However, the feeling of working for yourself is awesome.

 

[DrMikeP]

It has everything to do with how good you are in business and as a therapist. You can charge $200-300/hr cash for cash paying clients if you are good enough and that makes up for low paying ins. and covers office expenses quite well. If you do consulting work you can do even better.

That's why it is important to learn from someone who is successful. You'd be surprised at how often you can outfit an office for cheap with furnishings from failed practices. Rent 3 rooms and then fill 2 of them with others to pay your expenses. It's all about knowing how to run a business. If you don't know go to a community college and get a business degree. It is a great investment.

Sent from my Nexus 4 using Tapatalk

 

[PsyDr]

It has everything to do with how good you are in business and as a therapist. You can charge $200-300/hr cash for cash paying clients if you are good enough and that makes up for low paying ins. and covers office expenses quite well. If you do consulting work you can do even better.

That's why it is important to learn from someone who is successful. You'd be surprised at how often you can outfit an office for cheap with furnishings from failed practices. Rent 3 rooms and then fill 2 of them with others to pay your expenses. It's all about knowing how to run a business. If you don't know go to a community college and get a business degree. It is a great investment.

Sent from my Nexus 4 using Tapatalk

Assuming some strange world where there is a group of patients lining up to pay cash for a newly minted psychologist, that doesn't care that they are sitting in hand me down furniture, in an office which is cheap enough to be paid for by two office mates who are stupid enough to be paying the lion's share of the rent despite having graduate degrees, NNN doesn't exist in this office, office insurance comes like mana from heaven, insurance forms magically fill themselves out, internet is free, telephones are free, office equipment like computers are also magically showing up from the psychology elves, LLCs are free to create and that will never come to bite you in the ass, LLCs are filed for free unlike any filing rates in any state in the USA, taxes are filed for free because the CPA fairy visits you or you are stupid enough to try to file out corporate taxes without professional help and are certain you won't accidentally pierce the corporate veil which would open you up for personal liability, no state income tax,no city business license, your office never needs toilet paper or water (gross!), there's no maid or vacuum for your office, self employment tax somehow doesn't apply because screwing with the IRS didn't bring Al Capone down, you never contribute to a retirement account because that's a business deduction that you are too smart to use, etc etc.

Well, even that doesn't make sense regardless of "How good you are". It also doesn't make sense that you are netting $100/hr.

Source: I'm one of the regional high points on the Sweet survey. Also use a team of attorneys and CPAs.

 

[DrMikeP]

Assuming some strange world where there is a group of patients lining up to pay cash for a newly minted psychologist, that doesn't care that they are sitting in hand me down furniture, in an office which is cheap enough to be paid for by two office mates who are stupid enough to be paying the lion's share of the rent despite having graduate degrees, NNN doesn't exist in this office, office insurance comes like mana from heaven, insurance forms magically fill themselves out, internet is free, telephones are free, office equipment like computers are also magically showing up from the psychology elves, LLCs are free to create and that will never come to bite you in the ass, LLCs are filed for free unlike any filing rates in any state in the USA, taxes are filed for free because the CPA fairy visits you or you are stupid enough to try to file out corporate taxes without professional help and are certain you won't accidentally pierce the corporate veil which would open you up for personal liability, no state income tax,no city business license, your office never needs toilet paper or water (gross!), there's no maid or vacuum for your office, self employment tax somehow doesn't apply because screwing with the IRS didn't bring Al Capone down, you never contribute to a retirement account because that's a business deduction that you are too smart to use, etc etc.

Well, even that doesn't make sense regardless of "How good you are". It also doesn't make sense that you are netting $100/hr.

Source: I'm one of the regional high points on the Sweet survey. Also use a team of attorneys and CPAs.

Such bitterness. Hand me down furniture really? Funny how my patients have no problem laying on a $3000 sofa that another therapist used only a few times before closing the doors, shrugs. Perhaps I touched a nerve.

A 90837 in many areas will pay $125 plus for Medicare and copay. BCBS pays even better. So does Cigna OON. Avoid Aetna. The are lots of elderly. There are lots of wealthy individuals and executives/business people in every city who struggle with divorce, alcohol, anxiety, depression, etc that want a good therapist. All it takes are 5-10. Malpractice for parttime is less than $500 a yr and so is liability ins. You can rent existing space for less than $300/m easy for therapists who have a successful practice and have unused time.

There are also lots of really bad therapists that do things like text during therapy or don't listen. Professionals know fast when a therapist sucks and when one is good and will pay for a good one for themselves and family. Most don't want to use ins so they pay cash. If you build a rep among drs, lawyers, etc then word gets around and they will come. Unless you live in the middle of nowhere with only a small Walmart, but then move or commute.

OP, I built a thriving practice in one of the most competitive markets out there. Then I switched to part-time to pursue more altruistic goals. It can be done and very successfully. I've lectured and mentored numerous practitioners who have done similarly. The road to a successful practice is paved with miserable failures, because psychologists don't learn business skills in school. The worse thing a Psychologist can do is undervalue their work or not do the work to learn how to be a success.

Psydr... You can have the last word on this, as I have other things to do, but if you struggle so in practice find someone who is making $100k plus and ask them to help you learn how. It can be done.

PS a few course in accounting/taxes and you can do you own taxes, it's not rocket science it really isn't. Spending a ton of money on lawyers is a waste.

Best of luck

Sent from my Nexus 4 using Tapatalk

 

[psych844]

Such bitterness. Hand me down furniture really? Funny how my patients have no problem laying on a $3000 sofa that another therapist used only a few times before closing the doors, shrugs. Perhaps I touched a nerve.

A 90837 in many areas will pay $125 plus for Medicare and copay. BCBS pays even better. So does Cigna OON. Avoid Aetna. The are lots of elderly. There are lots of wealthy individuals and executives/business people in every city who struggle with divorce, alcohol, anxiety, depression, etc that want a good therapist. All it takes are 5-10. Malpractice for parttime is less than $500 a yr and so is liability ins. You can rent existing space for less than $300/m easy for therapists who have a successful practice and have unused time.

There are also lots of really bad therapists that do things like text during therapy or don't listen. Professionals know fast when a therapist sucks and when one is good and will pay for a good one for themselves and family. Most don't want to use ins so they pay cash. If you build a rep among drs, lawyers, etc then word gets around and they will come. Unless you live in the middle of nowhere with only a small Walmart, but then move or commute.

OP, I built a thriving practice in one of the most competitive markets out there. Then I switched to part-time to pursue more altruistic goals. It can be done and very successfully. I've lectured and mentored numerous practitioners who have done similarly. The road to a successful practice is paved with miserable failures, because psychologists don't learn business skills in school. The worse thing a Psychologist can do is undervalue their work or not do the work to learn how to be a success.

Psydr... You can have the last word on this, as I have other things to do, but if you struggle so in practice find someone who is making $100k plus and ask them to help you learn how. It can be done.

PS a few course in accounting/taxes and you can do you own taxes, it's not rocket science it really isn't. Spending a ton of money on lawyers is a waste.

Best of luck

Sent from my Nexus 4 using Tapatalk

I don't know your knowledge base, but maybe you're new around here and don't read PSYDR posts. He's an insanely knowledgeable guy on a lot of subjects. Don't discount his advice so fast. If there was one poster I'd trust on this subject, and many others, it be him.

 

[Peacemaker36]

Any tips on where to find old office furnishings?

 

[DrMikeP]

I don't know your knowledge base, but maybe you're new around here and don't read PSYDR posts. He's an insanely knowledgeable guy on a lot of subjects. Don't discount his advice so fast. If there was one poster I'd trust on this subject, and many others, it be him.

Not discounting but have been very successful at practice and taught other how, so there is no reason Psychologists can't do very very well in private practice.

Sent from my Nexus 4 using Tapatalk

 

[DrMikeP]

Any tips on where to find old office furnishings?

Join your state psych association and attend local functions. You'll find new practitioners and some older ones who have awesome furnishings and selling out. I've found sadly people often spend a ton on furnishings and open an office then close it in a year and sell stuff for pennies on the dollar. That goes for Psychologists but also lawyers. You definitely don't want cheap furnishings if you want to run a high end practice, but buying new is often a waste.

Sent from my Nexus 4 using Tapatalk

 

[PsyDr]

Such bitterness. PS a few course in accounting/taxes and you can do you own taxes, it's not rocket science it really isn't. Spending a ton of money on lawyers is a waste.

I could absolutely do my own taxes and pay an effective income tax rate of about 35-40% . Or I could hire two tax attorneys, a CPA who works as an expert witness in IRS litigation, and another CPA firm to reduce my tax burden to around 15-20% in a legal manner all while protecting my capital from outside liabilities. Doing something like that might allow me to do things like angel investing, VC, and other investment strategies which offer returns that far exceed the S&P, etc.

But your advice is good. Totally what the Panama Papers are indicating the super wealthy are doing.

 

[deleted343839]

I admit, it's kind of exciting to me when psychologists start talking about tax and investment strategies to protect their wealth, as opposed to the usual "the best you can really hope for is mid-to-high five figures" advice.

 

[DrMikeP]

I admit, it's kind of exciting to me when psychologists start talking about tax and investment strategies to protect their wealth, as opposed to the usual "the best you can really hope for is mid-to-high five figures" advice.

 

[DrMikeP]

The best advice I ever received on taxes was to take a couple of tax accounting courses, especially if they are taught by an adjunct who has been a tax accountant for 40yrs. Local community colleges often offer such (along with marketing, business law, insurance billing, etc) and you can take the courses for sometimes less than $100 each, which is cheap compared to what some doctoral programs charge and you'll make that back. Even if you don't do your own taxes it helps to know how and what expenses can be legitimately written off, common mistakes that will get you an audit, and how to invest practice income in tax shelters like health savings and retirement accounts. I personally hate giving the IRS any more than I legally have to.

 

[Therapist4Chnge]

I admit, it's kind of exciting to me when psychologists start talking about tax and investment strategies to protect their wealth, as opposed to the usual "the best you can really hope for is mid-to-high five figures" advice.

Two of the most important professionals in your life should tax attorney and financial manager (not the sell you a package guys).

 

[PikminOC]

It has everything to do with how good you are in business and as a therapist. You can charge $200-300/hr cash for cash paying clients if you are good enough and that makes up for low paying ins. and covers office expenses quite well. If you do consulting work you can do even better.

That's why it is important to learn from someone who is successful. You'd be surprised at how often you can outfit an office for cheap with furnishings from failed practices. Rent 3 rooms and then fill 2 of them with others to pay your expenses. It's all about knowing how to run a business. If you don't know go to a community college and get a business degree. It is a great investment.

Sent from my Nexus 4 using Tapatalk

What type of consulting? Btw, I appreciate the things you have written on this thread. After you finish med school you will be doctor doctor!

I know of a psychologist who does school consulting. What is that? I'm not that familiar with consulting work..

 

[PikminOC]

Not discounting but have been very successful at practice and taught other how, so there is no reason Psychologists can't do very very well in private practice.

Sent from my Nexus 4 using Tapatalk

What kind of physician do you want to be?

 

[smalltownpsych]

What kind of physician do you want to be?

Good question. I wonder how many of us just assumed psychiatry?

 

[DrMikeP]

Good question. I wonder how many of us just assumed psychiatry?

Actually I want to do emergency med. instead of psychiatry. I love working with patients and families in the ER and there is often a psych component that the ER docs miss. So while I wouldn't be doing psych directly as much it will still be part of who I am.

I developed and we implemented a Psychologist ER C&L service at my hospital and saw a 10% reduction in return visits. At some point if I ever have the time I'd love to publish the findings from that pilot study.

Sent from my Nexus 4 using Tapatalk

 

[DrMikeP]

What type of consulting? Btw, I appreciate the things you have written on this thread. After you finish med school you will be doctor doctor!

I know of a psychologist who does school consulting. What is that? I'm not that familiar with consulting work..

There is school consulting where schools call you in and you work on process improvement to improve satisfaction and academic performance. Then there is academic consulting where you become an independent counselor for students and families. I recently sold my practice and gave up my hospital/academic position, so now currently helping mostly undergrads navigate the system of getting into professional school and improve their applications. The academic advising at many (not all) college campuses is horrible, so it's a valuable niche Psychologists can fill.

Sent from my Nexus 4 using Tapatalk

 

[deleted343839]

Actually I want to do emergency med. instead of psychiatry. I love working with patients and families in the ER and there is often a psych component that the ER docs miss. So while I wouldn't be doing psych directly as much it will still be part of who I am.

I developed and we implemented a Psychologist ER C&L service at my hospital and saw a 10% reduction in return visits. At some point if I ever have the time I'd love to publish the findings from that pilot study.

Interesting! It was working in an ER that influenced me to switch my major to psychology. Your expertise will be very useful. Please keep us informed on how things progress for you.

And please publish that paper one day!