Question about Cash Practices

[Hadouken830]

Forgive me for being naïve about the business side of the medical field. I'm a fourth year student interested in psychiatry. I know that many psychiatrists have cash only payments in their private practices, and from what I've heard charge rates anywhere from $180-$300 for an initial visit, to $100-$180 for every follow up visit. I'm just kind of confused on how this is possible to have with a steady stream of patients. For practically every field of medicine, whether it's IM, Cardio, GI, Ophto, etc. people always are struggling to pay just even the deductible. The only specialty where I see people paying cash only willfully is something like plastic surgery, where many of these rich, high profile clients come to get boob jobs, lipo, etc. Is psychiatry kind of like that? Where it attracts those wealthy patients to pay cash only? I just can't get my mind around it. So much of the population is complaining about how health care is so expensive, can't pay bills, and on and on. And to me, paying cash only up to $300 is very expensive. A lot of people can't afford expensive products, rent, luxuries, and for them to spend that much and keep spending on psychiatric visits I just don't understand how they can do that. Can someone please explain to me how this works? Thanks!

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[PistolPete]

Cash-only practices generally only exist in affluent areas. People want good service and can afford to pay for it.

 

[heyjack70]

Forgive me for being naïve about the business side of the medical field. I'm a fourth year student interested in psychiatry. I know that many psychiatrists have cash only payments in their private practices, and from what I've heard charge rates anywhere from $180-$300 for an initial visit, to $100-$180 for every follow up visit. I'm just kind of confused on how this is possible to have with a steady stream of patients. For practically every field of medicine, whether it's IM, Cardio, GI, Ophto, etc. people always are struggling to pay just even the deductible. The only specialty where I see people paying cash only willfully is something like plastic surgery, where many of these rich, high profile clients come to get boob jobs, lipo, etc. Is psychiatry kind of like that? Where it attracts those wealthy patients to pay cash only? I just can't get my mind around it. So much of the population is complaining about how health care is so expensive, can't pay bills, and on and on. And to me, paying cash only up to $300 is very expensive. A lot of people can't afford expensive products, rent, luxuries, and for them to spend that much and keep spending on psychiatric visits I just don't understand how they can do that. Can someone please explain to me how this works? Thanks!

Some people have means and don't want an insurance record of mental health treatment. Some people want better care, or possibly easier access to care, and are willing to pay. I believe many cash paying patients get a super bill from the doctor and submit it to insurance themselves to get what reimbursement they can, so it's not necessarily $300, they probably get some of that back from their health insurance. $2-3000 a year to keep you psychiatrically stable is worth it to some people. And it's cheap compared to the cost of other areas of medicine.

 

[Bartelby]

Imagine that you are a practicing internist earning $230,000 per year and that your spouse is a lawyer earning $150,000. Both of you live in LA in a condo you purchased for $800k. Now imagine that your spouse comes down with a moderate major depressive episode, putting their high-performing job at risk, creating marital tension, and making them less emotionally available for your children. You hear about a psychiatrist with openings that your primary care doctor really recommends, but that psychiatrist is cash-only, charging $350 per intake and $200 for a one hour followup. Alternately you could go to an insurance-accepting psychiatrist for medication management (after a six week wait) and pursue therapy through a separate psychologist or social worker, with each of those visits having $30 copays. Even though you would save hundreds or thousands of dollars on the cheaper option over time, the $100-150 per visit difference (after deducting the copay and submitting for reimbursement, it may be even less) becomes the least of your worries! It makes sense to me that a rockstar psychiatrist in Boston, New York, San Francisco, LA, etc etc could probably find a line of well-off (though not multimillionaire) people like the above who have no issue at all with paying.

Beyond that for people making less money, having a family member (or yourself) suffer a psychiatric illness is tremendously painful. People who have the money to spend may well choose to spend it on whoever they think will be the most helpful, especially if the difference is a few thousand per year (compare that to, say, upgrading your car or repainting your home).

Finally, it can be useful to think of what some other professions charge per hour. Lawyers, plumbers, accountants, etc. How would treating someone's depression or stabilizing their bipolar disorder rank in terms of value for money? Also, if you had a serious legal charge against you would you call up one of the cheapest lawyers in the yellow pages? If not, why would you approach seeking psychiatric treatment that way?

Of course, there is a sizeable segment of the population that lives month to month and just can't pay cash no matter how much they would like to. That a cash practice excludes them all (unless you are open about very generous sliding scale policies) is a sad reality, and probably most people's biggest stumbling block morally about cash-only.

 

[splik]

Forgive me for being naïve about the business side of the medical field. I'm a fourth year student interested in psychiatry. I know that many psychiatrists have cash only payments in their private practices, and from what I've heard charge rates anywhere from $180-$300 for an initial visit, to $100-$180 for every follow up visit.

$180 for an initial visit is a bargain. Round here insurance pays $300-350 for an initial visit (99205). The going rate for cash psychiatrists is between $300-600. In the most recent practice survey of the American Psychoanalytic Association, psychoanalysts were charging between $0-600 per analytic hour. (as you can imagine it is a rare analyst who charges $600/hr, analysts usually make less than other psychiatrists because they have fewer patients)

Most people in most parts of the country expect to be able to use their insurance to pay for their healthcare. That is true. However in the major metropolitan areas mentioned above it is often hard to get psychiatric care from a doctor who takes insurance. There are several reasons why people might pay out of pocket for healthcare: additional services (speedy return of calls, round the clock response, early/late/weekend appointments), faster access, keeping things off an insurance trail (especially for physicians, lawyers, pilots etc), inability to obtain services through insurances (in some places like NYC the "in network" lists of providers are basically ghost lists including long dead psychiatrists, I **** you not), or lack of satisfaction with services available through insurance. Not infrequently even low income patients on medicaid etc will pay out of pocket for a one time consultation with a psychiatrist in the hope of getting relief from their symptoms. People may also pay cash to receive goods they have a hard time obtaining (such as stimulants, benzos, subxone, or a cocktail of all 3) or for specific treatments not covered by insurance (e.g. ketamine infusions, tcDCS, TMS) or to see someone who provides both pharmacological and psychotherapeutic interventions. CAM/Integrative psychiatrists will also be cash only as their practices are not typically covered by insurances.

 

[birchswing]

It can be worth it. Most people don't see a psychiatrist more than once a month. And patients can try to get their insurance to cover it even if the psychiatrist doesn't file for them. Apparently the market can't bear it where I live, but I would use a cash-pay psychiatrist if it was a better alternative. I do pay cash for my psychologist ($65 per week since he has a student rate, otherwise it's $90), and even on a limited income it's worth it for me.

Edit: To tag on to what Splik said above, the reason I would jump to cash-pay is for the additional services. My current psychiatrist doesn't return phone calls under any circumstances. From what I have seen cash-pay psychiatrists will do this and sometimes charge for it. Even if they charge for it, it would be worth it for me to be able to ask a question. I don't understand how it makes any sense to change a person's medication or try a new medication and for the patient to have no way of contacting the psychiatrist until the next appointment--that is the most frustrating part of not being able to contact between appointments. So, I would pay extra for that ability.

Another addition: My psychiatrist is reimbursed very little for our appointments. I can't remember exactly but I think it's less than $50 per med check. I would readily pay up to $150 out of pocket for an appointment once a month if it allowed for additional services like returned calls and if it guaranteed a good amount of time (20-30 minutes). And while I don't want to say my income, $150 is not insignificant. Fortunately, I have very few costs at the moment due to family support. Not everyone would be as fortunate, which is why the market might not be able to bear it.

 

[splik]

Finally, it can be useful to think of what some other professions charge per hour. Lawyers, plumbers, accountants, etc. How would treating someone's depression or stabilizing their bipolar disorder rank in terms of value for money? Also, if you had a serious legal charge against you would you call up one of the cheapest lawyers in the yellow pages? If not, why would you approach seeking psychiatric treatment that way?

most people don't think in this sort of way. Even in the US, most people expect to be able to use their insurance to cover the costs of their healthcare and resent or feel outrage about having to pay out of pocket. People who have insurance will often feel like they are paying twice as they've already paid for insurance, and OON coverage usually only reimburses a tiny fraction (say 40% of the allowed amount, and the fees charged maybe greatly in excess of what the insurance company allows). Medical treatments and psychiatric treatments in particular are a lot more nebulous because there is a lot less transparency and the services are often not as time limited. Especially if this treatment includes a more dynamically oriented psychotherapy you might have little idea of how long the treatment is going to go on for. There are so many different approaches to treatment and the APA refuses to set standards of what what constitutes best practice because they're too scared to upset their members. It is It is also much harder for most people except the well connected/informed to identify who is or isn't a good physician or to know if they are getting their value for money. It is also much harder to leave medical treatment (and especially psychiatric/psychotherapeutic treatment). There are quite clear disparities along socioeconomic, neighborhood, and racial lines regarding healthcare communications even for data where things are theoretically more clear-cut (for example surgical outcome measures, or interventional cardiology outcomes). The other issue is that although no good psychiatrist in the cash market is cheap, being an expensive psychiatrist doesn't necessarily mean you are any good. Some of the worst psychiatrists charge outrageous sums of money.

 

[Frazier]

Forgive me for being naïve about the business side of the medical field. I'm a fourth year student interested in psychiatry. I know that many psychiatrists have cash only payments in their private practices, and from what I've heard charge rates anywhere from $180-$300 for an initial visit, to $100-$180 for every follow up visit. I'm just kind of confused on how this is possible to have with a steady stream of patients. For practically every field of medicine, whether it's IM, Cardio, GI, Ophto, etc. people always are struggling to pay just even the deductible. The only specialty where I see people paying cash only willfully is something like plastic surgery, where many of these rich, high profile clients come to get boob jobs, lipo, etc. Is psychiatry kind of like that? Where it attracts those wealthy patients to pay cash only? I just can't get my mind around it. So much of the population is complaining about how health care is so expensive, can't pay bills, and on and on. And to me, paying cash only up to $300 is very expensive. A lot of people can't afford expensive products, rent, luxuries, and for them to spend that much and keep spending on psychiatric visits I just don't understand how they can do that. Can someone please explain to me how this works? Thanks!

If your conscience objects, good news is that -- given PP's autonomy -- go ahead and charge as little as you please. You'll just fill faster with a smaller bottom line.

 

[PikminOC]

Solved on SDN by Fraizier!

 

[Hadouken830]

most people don't think in this sort of way. Even in the US, most people expect to be able to use their insurance to cover the costs of their healthcare and resent or feel outrage about having to pay out of pocket. People who have insurance will often feel like they are paying twice as they've already paid for insurance

Thank you all for the polite and detailed responses, very much appreciated. I think the answer splik gave was what I was looking for. You understood my question. Yes, Frazier I know you can charge whatever you want in a PP, that's common sense. However, I'm talking about what the average prices are. I also don't want to open up a practice in Psychiatry and have a high volume of patients every day so I can make more money the more patients I see each day. I don't think that's how most psychiatrists practice from what I've read, that sounds more like how every other field of medicine practices in their private clinics. I was more thinking about what splik said up above (in quotes). I'm just trying to understand a little how the business of psychiatry works. Not trying to downplay the charges. If I'm going into psychiatry, why would I do that? If anything I'd want to charge the same or more. I'm just trying to understand the mindset, income level, and business architecture of the field so I know how to prepare in the future.

 

[nitemagi]

These are good responses. Add in that families can (sometimes) rally to support a sick family member.

Insurance-based psychiatrists most often are in the 15 minute med checks, which I almost never hear good things about (though this is a selection bias, as many of the patients coming to me do so because they don't like that system). If you can offer a higher level of service (more time, varied approaches), then it's easier to carve out a niche. Psychiatry has a great deal more opportunity for diversification from others. Like any small business, you want to fulfill an unmet need, and do it better than others.

 

[Frazier]

Thank you all for the polite and detailed responses, very much appreciated. I think the answer splik gave was what I was looking for. You understood my question. Yes, Frazier I know you can charge whatever you want in a PP, that's common sense. However, I'm talking about what the average prices are. I also don't want to open up a practice in Psychiatry and have a high volume of patients every day so I can make more money the more patients I see each day. I don't think that's how most psychiatrists practice from what I've read, that sounds more like how every other field of medicine practices in their private clinics. I was more thinking about what splik said up above (in quotes). I'm just trying to understand a little how the business of psychiatry works. Not trying to downplay the charges. If I'm going into psychiatry, why would I do that? If anything I'd want to charge the same or more. I'm just trying to understand the mindset, income level, and business architecture of the field so I know how to prepare in the future.

No problem, sounds good and congrats on choosing the best specialty in medicine.

 

[Hadouken830]

Thank you Frazier, I'm very excited about it!