approx what salary would these hourly rates translate to?

[abcxyz0123]

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I know a general adult psychiatrist in the area who charges these rates:

60-90 Minute Initial Evaluation-260.00/hour
60 Minute Session-260.00
45 Minute Session-210.00
25 Minute Session-130.00

I was just wondering...would it be reasonable to say that one would be able to fill in a full 8 hour day with these rates....or is it hard to get a day filled with patients back to back? If you were able to get at least 8 hours a day, 5 days a week, with these rates (we'll go with 260/hour x 8 hours), that would translate to 10,400 a week. With 7 weeks vacation (i like to party), that would come out to around 470k gross for the practice. What percent of this gross income would usually be taken off for overhead/malpractice insurance/etc? About 30%? If so that would come out to about 330k. But then you'd have to figure out your own health insurance/etc right?

Also...how high or low are these cash only rates relative to other practices you've seen, from your own experience? Higher than normal?

My ultimate goal is to do forensic child psych....but I want to figure out whether it would be realistic to make $400k a year doing solely child psych, working 50+ hours a week. I would assume that a child psych would charge even higher rates. Maybe 300/hr on average?

 

[whopper]

If its a practice, also factor in the overhead cost of staff (a secretary, a nurse), the cost of the real estate on the office, and keeping that office supplied and running.

or is it hard to get a day filled with patients back to back?

Depends on the nature of the patient population you see. For example, I worked in 2 outpatient offices during residency. One place I had over 95% of the patients show up, the other--more than 60% were no shows. I gave each the same quality of treatment as far as I know. What made the difference IMHO was that at one office-this was a middle class setting, with patients who had good insight, and were taking their meds for years before I already saw them. At the other office, this was the usual office the hospital unit referred new patients. So they were often times lower class, substance abusers, and people who got drunk and were sent to the psyche unit with a Depressive DO NOS diagnosis, but not really showing much signs of depression, but a lot of signs of a hangover when in inpatient. In short people who didn't really fit the criteria for a real Axis I disorder, or people with poor insight who didn't want treatment anyway. Several of the no-shows were people I never met. They were discharged & decided to not even go to the inpatient office at all even though an appointment was scheduled for them.

I don't know if there is a good & reliable way to gauge what your specific office population will be like until you actually start it up & run it. However if you run those rates--I'd bet your population will probably have some form of insurance & will be of a better SES level. That'd point to a possible better patient attendance rate.

 

[Therapist4Chnge]

If its a practice, also factor in the overhead cost of staff (a secretary, a nurse), the cost of the real estate on the office, and keeping that office supplied and running.

Depending on where you live, overhead can run 15-20% (square footage + staff + insurances, etc). Obviously it'd be lower in the midwest, south, etc.....but in major cities it will cost a pretty penny for overhead.

 

[whopper]

I've heard from various sources that running a private outpatient is a pain in the butt to "its great, I can wake up whenever I want". I think its going to highly vary depending on your patient demographics, whether or not you like to run your own business, and how you handle it.

Also, I've heard from several who have a private practice that after you've figured out your own patient style in terms of attendence, you can manipulate it. E.g. mix patients in a manner that allows you to see as many as you can, or ease the day so you can spend more time on specific patients who need the time.

 

[abcxyz0123]

What about the hourly rates...are those normal for most psychiatrists...or does this guy charge higher than normal rates? He's in his mid 30's...so would it be unrealistic for him to charge more as he gets older....or do people usually stick to the same rates until they retire?

Was the 330k number pretty accurate?

 

[NJWxMan]

330 seems a bit high. His rates are definitely high. I took a good look at what the insurance companies pay in a mid sized city in Upstate NY during an outpatient psychiatry month. In general, there were three codes that the office used. For the initial visit, most all insurance companies paid $175-$200. For a med check, they paid between $45-65. For one hour of therapy, they paid $80-100. The difficult part about a psych practice is whether your patients would be willing to pay the amount not covered by their insurance. For example, you charge $130/HR for therapy, but the insurance only covers $80. Would your patient be willing to fork over $50 to cover his visit? That's basically what it comes down to in terms of the difference between a psychiatrist who makes $160G and one that makes $250G.

 

[abcxyz0123]

What I don't understand is how I haven't shadowed or known any private practice psychiatrists who take only insurance...and where all the money is going if most of them that do cash only, if you calculate it all, are making at least 400-500k gross, and overhead is reasonably low?

 

[Therapist4Chnge]

What I don't understand is how I haven't shadowed or known any private practice psychiatrists who take only insurance...and where all the money is going if most of them that do cash only, if you calculate it all, are making at least 400-500k gross, and overhead is reasonably low?

Therein is the rub.

There is more complex math than just hours x rate = gross. Below is a very simplified version of a formula I developed to help me estimate gross and net projections across disciplines.

(Total Hours x Productivity Rate % x Collection Rate %) x (Blended Hourly Rate) x (Billable Work Weeks) - (Hard Cost + Soft Costs) = Net

The Hard and Soft Costs can get quite complex, depending on the structure of your PP. For modeling I'd round up for each of your Hard Costs, tack on 20% more for soft costs, and then establish a % gross number with which to work with. Solid practices will keep the overhead ~15-18%, though it can vary greatly on region, billing rate, and type of practice. The first few years tend to be more expensive, and for some people much more expensive....so YMMV.

Most professionals don't want to get as involved as is necessary, which is why they hire someone like me to do the heavy lifting. 😀

 

[NJWxMan]

Let's face it though, if ever there was a field to have a cash practice with little to no cost, it would be psychiatry. Although my fiance is starting to threaten that she may drop her current profession so that she can go to PA school and practice alongside me, I plan on having a cash practice with NO secretary. That's right; no employees! Is it manageable? It is if you have a decent EMR and only take cash. This will force patients to come for visits instead of having numerous questions answered over the phone and through a secretary. It will prevent many no shows. In short, it will likely add up to be a concierge psychiatry practice with 300-500 patients. Obviously, scheduling and cancellations will be left on my shoulders. However, I plan on enforcing an email policy for scheduling. In terms of rent, I really would not need any facility that would cost no more than $1000/month. Obviously, this is near delusional thinking, but I plan on coming as close to this business plan as possible. It is the little overhead expenses that really knocks down income.

 

[abcxyz0123]

I actually plan on doing something very similar.

What about buying an office space vs. renting? At least the 1-2g's you'd throw down would still serve as some sort of investment, instead of throwing it away for good. The money you throw away for overhead would then just boil down to stuff like your utilities and malpractice.

 

[Therapist4Chnge]

I plan on having a cash practice with NO secretary. That's right; no employees! Is it manageable? It is if you have a decent EMR and only take cash. This will force patients to come for visits instead of having numerous questions answered over the phone and through a secretary.

It could work, though I would caution your under-estimation of BS that the secretary would handle. Remember....every hour you spend answering the phone/filing a document/etc, is an hour that you cannot bill. Paying a secretary $15/hr (no benefits) 20 hours of work per week will net you an extra $50-$60k per year if you maximize your time, and $20k per year if you are less efficient.

(10 "found" hours x $150 basic rate) - (20 x $15) = $1200
$1200 x 48 billing weeks = $57,600

(5 "found" hours x $150 basic rate) - (20 x $15) = $450
$450 x 48 billing weeks = $21, 600

Obviously, scheduling and cancellations will be left on my shoulders. However, I plan on enforcing an email policy for scheduling.

This assumes you treat a population that is comfortable with this medium, and that they will follow it. A mom on the go won't have time to e-mail you between picking up her kids and the grocery store. A white collar professional may have a Crackberry, but he may not want a record of his visits to a psychiatrist on his work phone.

In terms of rent, I really would not need any facility that would cost no more than $1000/month.

That can work......in some places. Square footage definitely eats into the bottom line, though it is a necessary evil. You'll have to pay attention to location, access, security, etc. Don't forget buying furnishing (which can be depreciated over the year), insurance coverage, utilities, etc. That $1000 now balloons to $1700 and you haven't seen a patient yet.

You can still do well, but it is amazing how many more things pull from the bucket than fill the bucket. If you can increase how you fill the bucket (own v. rent, sub space, etc)....then it won't matter as much.

 

[notdeadyet]

In short, it will likely add up to be a concierge psychiatry practice with 300-500 patients.

Concierge psychiatry, if we're using the term the same way, seems like a pretty awful idea to me. The only reason concierge primary care works is that people essentially do not want to go to the doctor unless they have to. I don't think you have the same thinking with psychiatry. With patients paying a flat monthly fee, I would think you'd see a lot more of them and they'd request some pretty painful hours.

And 300-500 seems like a LOT of patients for a concierge model. The concierge model would only make sense to the customer if they anticipated using your services a fair bit, so I don't see how you'd fit that many in.

 

[abcxyz0123]

Concierge psychiatry, if we're using the term the same way, seems like a pretty awful idea to me. The only reason concierge primary care works is that people essentially do not want to go to the doctor unless they have to. I don't think you have the same thinking with psychiatry. With patients paying a flat monthly fee, I would think you'd see a lot more of them and they'd request some pretty painful hours.

And 300-500 seems like a LOT of patients for a concierge model. The concierge model would only make sense to the customer if they anticipated using your services a fair bit, so I don't see how you'd fit that many in.

Agreed. But what I don't understand is why people on here throw out the term concierge whenever "cash only" and "psychiatry' are said in the same sentence. From my own personal inquiries in real life, I hear that PP usually nets you 300-500k a year, and that most psychs go cash only. From SDN inquiries....the number drops to 130-250k a year.......and cash only is a slightly foreign concept. So confused.

 

[chameleonknight]

For the initial visit, most all insurance companies paid $175-$200. For a med check, they paid between $45-65. For one hour of therapy, they paid $80-100. The difficult part about a psych practice is whether your patients would be willing to pay the amount not covered by their insurance. For example, you charge $130/HR for therapy, but the insurance only covers $80. Would your patient be willing to fork over $50 to cover his visit? That's basically what it comes down to in terms of the difference between a psychiatrist who makes $160G and one that makes $250G.

Don't Medicare and Medicaid forbid this?

 

[TexasPhysician]

Don't Medicare and Medicaid forbid this?

I think he is referring to the amount of money the patient would ultimately lose. The patient would have to foot the entire psych bill, but would be reimbursed up to a certain point by insurance.

 

[OldPsychDoc]

I think he is referring to the amount of money the patient would ultimately lose. The patient would have to foot the entire psych bill, but would be reimbursed up to a certain point by insurance.

If they have insurance...because setting oneself up as a cash-only practice is essentially saying to patients "If you have Medicaid or Medicare, find yourself a doctor someplace else." 🙁

(Which is many of us reflexively think "concierge" when someone says "cash-only")

 

[OldPsychDoc]

Let's face it though, if ever there was a field to have a cash practice with little to no cost, it would be psychiatry.

...have a decent EMR and only take cash. This will force patients to come for visits instead of having numerous questions answered over the phone and through a secretary.

You do realize that the people you're hoping to populate your practice with are precisely the people who are going to EXPECT that you personally return their phone calls, don't you?

 

[NJWxMan]

You do realize that the people you're hoping to populate your practice with are precisely the people who are going to EXPECT that you personally return their phone calls, don't you?

100% correct. For some reason, I mixed two practice types together. Not sure why I did it. In fact, I suspect someone with a concierge service may not even need a full fledged office; perhaps renting a single room in an FP office, etc.