Building a very large private practice

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Psychdoc4755

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Hey all,

I’m a psychiatry resident who is approaching the end of his psychiatric training and getting ready to enter private practice. I am consulting this forum to ask about the feasibility of building this type of practice. I understand the majority of people here have not undertaken such an act, but would appreciate some input whether it be anecdotal or based off research.

If I did start a private practice, I would like to get on an insurance panel to get cheap Medicaid/Medicare patients initially and avoid cash based. I’d be compensated less per patient, but it would ensure good initial patient flow as I understand that if you are in the right geographic area (something I’m very flexible on) there will certainly be a huge demand for psychiatric services and I will be able to see as many patients as I am able to fill me schedule with daily. After establishing this practice with appropriate auxiliary staff (reception, billing) - keep in mind I have a very minimalistic philosophy towards my business and would not want any unnecessary hires and only absolutely necessary office space which I’ll initially rent - my plan next would be to get into contact with as many physician recruiters as possible and expand the business aggressively. I’d want to hire as many psychiatrists as possible (eventually moving into a large multi specialty group - but I’ll start within my specialty initially due to familiarity). I would continuously be acquiring more space for these new practitioners while I at least initially manage the whole business end of the practice (renegotiating with insurance for bigger deals/panels, better EMR services, etc). I can give these new hires some type of partial ownership deal, possibly with an RVU based model but ultimately the significant majority of profits will be for me as this is my creation - that way these doctors (psychiatrists, etc) can focus on seeing patients and not the business end of the practice and let’s be honest most doctors don’t want to worry about that kind of stuff and are most concerned with work life balance and avoidance of burnout.

Anyways... If I get into a rhythm and continually focus on expansion of patient and physician panels with recruiters and insurance companies, I don’t see why in some amount of time down the road I could be employing 1000+ physicians or more. It’s certainly possible, it’s been done before by many physicians, MBAs, JDs. HCA Healthcare was founded by an IM doctor and also Molina Healthcare in California comes to mind.

Thoughts?

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Can't hurt to dream. Can't hurt to chase a dream.

Medicaid reimbursement is low. You will likely run a loss, unless you see patients every 15 minutes. Or subsidize this population by seeing well paying private insurance or getting grants from a government agency. If you chasing grants or emphasizing Medicaid you will quickly realize you are essentially a community mental health agency and you alone or not enough. You will need SW, and the ability to do LAI, case management, transporting people from A to B, and chemical dependency. And basic services of an office won't be enough. You will need to expand to have PHP/IOP, detox, etc. Those programs take money to start up and time and effort.

More staff you have, the greater issue of Human Resources and need for benefits and now managing your staff and their wellbeing from an HR stand point. Or as many organizations default to - how to fire people and protect the agency from court cases by making the employee out to be the 'bad apple.'

Just because you have a job, doesn't mean people will want to apply, or the people who apply you actually want. By targeting a medicaid/medicare population, you will clinically be on par with community mental health agencies. The realities of their reimbursement, will depress salaries, and you will have a had time recruiting, just like the CMH agencies, or you may find yourself only hiring ARNP.

Every state has nuances to insurance coverage, commitment laws, telemedicine laws, etc. And the larger for profit psych hospital companies stumble at times when they enter new markets. The bigger an organization gets, the more bureacuracy and less friendly it gets. Case example, look at Kaiser HMO, and their recent strikes for deficiencies in mental health staffing.

Psychiatrists have the flexibility to very easily to open their own practice, and I've heard stats tossed around that 40-50% are cash only. You will be trying to recruit, and compete against that culture. Why would patients prefer your practice? Every state is different with medicaid rules, and some are very heavy with designations to specific entities to deliver care. Why would your office get a medicaid contract for more favorable rates, or simply the designation to service the mental health? Community mental health agencies have such tight budgets (or is it just poor management?) that they don't even like to hire enough therapists, but instead become training sites to churn thru trainee/interns as their real labor force. Constant complaint I hear from patients at CMH is wanting to leave because they are tired of the staff turn over.

Multispeciality? Look around, Kaiser, Catholic flavors, Big Box shop, BiG BoX ShOp, etc there are so many large health systems through out the country. Why haven't they dominated the country? I believe Kaiser flopped in CO and OH and pulled out of both states. Places with great name recognition like Cleveland Clinic or Mayo Clinic, they've barely expanded to locations in the country, instead opting for over seas expansion, that should tell you something. You reference HCA, why would your operation be better?

The VA is basically one such entity, and even they can't fill all their psych needs, that should give you something to reflect on...
 
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Can't hurt to dream. Can't hurt to chase a dream.

^^That

Multispeciality? Look around, Kaiser, Catholic flavors, Big Box shop, BiG BoX ShOp, etc there are so many large health systems through out the country. Why haven't they dominated the country? I believe Kaiser flopped in CO and OH and pulled out of both states. Places with great name recognition like Cleveland Clinic or Mayo Clinic, they've barely expanded to locations in the country, instead opting for over seas expansion, that should tell you something. You reference HCA, why would your operation be better?

And that ^^
 
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Regarding the first post,

I understand there are many reasons why it may not be possible and why the process would be extremely difficult. Nevertheless, if what you are saying is true which most of your argument seems to be based on the fact that medicare/medicaid reimbursements are so poor, then it wouldn't be a bad idea for me to negotiate with private insurance companies as well initially and see which ones offer the best deal. The idea is that I need enough patients to fill my panel and the other psychiatrists in the company (or eventually multispecialty) while getting the best reimbursement per patient. Whatever offers the best proportion of those two things would be the company I would do a deal with initially. Cash pays the best but hard to get patients to come especially initially and medicare pays the worst (usually) but with plenty of patients who are waiting to see you - so something in the middle?

You ask me why patients would prefer my practice over a cash based practice? I figure because they can't afford to pay $250 an hour for cash based which seems to me to be the vast majority of patients. Of course one would also ask why a doctor would prefer to work for my company as opposed to being reimbursed better with their own cash based practice? Simple, I genuinely do not believe that the vast majorty of doctors want to/have the will to open up their own business especially in this day and age when trainees are discouraged from that from Day 1 of medical school - let's be honest. Is it necessarily true? I doubt it. But preaching the idea of it being almost necessary to be an employee instead of independent as a licensed physicians seems to be the mantra

You say there are so many multispecialty giants already in place in this country. Certainly true. Nevertheless, there is an ever expanding need for healthcare services in this country that I don't see diminishing anytime soon, so the demand is certainly there for new entities to enter the healthcare game.

There will be many issues in attempting to build such a large company - you mentioned difficulty in recruitment due to low medicare/insurance reimbursements, establishing auxiliary services such as IOP/PPH/LAI, having competent staff, avoiding legal action by employees - Again, I'm not denying that any of these things are false, I figure there must be a way to navigate around these issues with enough determination and creativity. Starting any business like this will be profoundly challenging, but ultimately very rewarding to me personally and also in an altruistic sense - Organization, efficiency, and simplicity is something America's healthcare system desperately needs and I'd like to incorporate some of my ideas/beliefs into how things work in a grander scale than just my own private office.
 
There is an over abundance of incompetent POS staff. It is hard to find quality staff, especially if you don’t offer benefits and benefits are freakin expensive even with good TMS traffic. I believe things are doable. I’m just focusing on a mental health focused practice. It’s a $h!t ton of work to keep it expanding rapidly. I’m quite comfortable but also am curious to see how big this can get. But it’s a lotta work. And as you get bigger, you run across more good competitors too.
 
Your plan will need some tweaking. Medicaid pays incredibly low fees and you can’t charge a no-show fee in my state. They no-show 25-40% of the time in my experience. You’ll need to double book most slot. This is a mess logistically, so you’ll need an excess of staff to manage the fluctuations in volume and extra receptionists to obtain 2-3x the number of patients. Managing refills on 2-3x patients is horrible. The psychiatrists would quit or want to require follow-ups for refills. If you require follow-ups, you’ll need to keep slots open for forgetful patients. This means you can’t ever run completely full, so revenue is lower.....or patients will go elsewhere.

Say you plan to just “start” with Medicaid. The good insurance patients will leave once they discover you have 1-3 hour waits sporadically as too many 2-3x booked patients all show at times. If you don’t 2-3x book Medicaid patients, you’ll likely lose money hiring other docs and give up.
 
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Yea, sounds better to steer away from Medicaid. Some of the big boxes here won’t even deal with it. You may be more successful in investing in some rockstar seo and accepting non state plans. Medicare is a good idea though. They have good rates and low deductible.
 
Yes, I’m certainly not dead set oh which insurance plans I would initially accept for the practice and it is certainly subject to change as I develop the business and gain experience.

Private insurance plans like Aetna, BCBS, Anthem I suspect would still yield good patient flow minus the hassle that other lower end insurance would have. I could intermix some Medicaid population into the panel as well.

My question is this: Once you get to a certain size and number of physicians, let’s say 200+ I feel like the game would change completely. I envision adopting ultimately a Kaiser like model where we insure the patients directly and cut out the middle man, unless the regional health insurance companies would start offering me amazing deals I’ll take my patients off their panel and insure them directly with my group. That and it would be wise to start opening up/buying out hospitals at that point.
 
Sushirolls is mostly right. Just add a few more thoughts:

1. very large does not equal to very profitable. I'm pretty sure Vera Wang is more profitable than Banana Republic. If this is not clear to you, you are not ready to start a business. Often when you try to get "very large" you need outside investors to scale, and this can create hovac. If you miss an opportunity to scale, you often get squeezed out of business by competitors. It costs an enormous amount to hire 100 psychiatrists. Many of the largest hospital systems in the country don't have 100 FTE psychiatrists on staff, and when they do such departments are often money losers need subsidy rather than a profitable part of the business.

2. If it's that easy to negotiate with insurance, 40-50% people wouldn't be taking cash. My experience has been that insurance is uninterested in negotiating with individual providers. Most insurances would PREFER everyone go out of network because in general they end up paying less due to decreased utilization, even if their plan enrollees have some OON reimbursement. Why would they negotiate with you? There are talks that at the next iteration of Obamacare improvement there'll be a legislative mandate for a broader panel, but this is strictly talk. Most state Medicaid already has standing CHMC contracts with lots of block grants for salary lines. Without the existing relationship, it's difficult to play the Medicaid angle. Also, most Medicaid clinics are nonprofit, so there's no excess profit for you to make.

3. Many many MANY patients of all socioeconomic backgrounds can and are willing to pay $250+ per month for high-quality psychiatric service.

4. While most physicians don't want to open a business, many psychiatrists are able and willing to open a part-time practice, and have a full-time job with benefits with a government agency or large systems. Said practice often gradually expands. Your arrangement has no competitive advantage over these jobs/arrangements.

5. There is literally no easy way to navigate this, and the MOST difficult issue is the last one: psychiatric service has little advantage in economy of scale, and psychiatrists are woefully undersupplied and obtain referral directly from the community. The saving for a practice of 100 is very little vs. a practice of 1 or 2, very unlike say for a high overhead specialty like surgery or secondary referral like pathology. This is a great strength for small psychiatry services and some very malignant tendencies in the rest of the finance of medicine (private equity ownership, for one; large facility absorbing small practices for "facility fee", for another) are practically non-existent in this field.

Regarding the first post,

I understand there are many reasons why it may not be possible and why the process would be extremely difficult. Nevertheless, if what you are saying is true which most of your argument seems to be based on the fact that medicare/medicaid reimbursements are so poor, then it wouldn't be a bad idea for me to negotiate with private insurance companies as well initially and see which ones offer the best deal. The idea is that I need enough patients to fill my panel and the other psychiatrists in the company (or eventually multispecialty) while getting the best reimbursement per patient. Whatever offers the best proportion of those two things would be the company I would do a deal with initially. Cash pays the best but hard to get patients to come especially initially and medicare pays the worst (usually) but with plenty of patients who are waiting to see you - so something in the middle?

You ask me why patients would prefer my practice over a cash based practice? I figure because they can't afford to pay $250 an hour for cash based which seems to me to be the vast majority of patients. Of course one would also ask why a doctor would prefer to work for my company as opposed to being reimbursed better with their own cash based practice? Simple, I genuinely do not believe that the vast majorty of doctors want to/have the will to open up their own business especially in this day and age when trainees are discouraged from that from Day 1 of medical school - let's be honest. Is it necessarily true? I doubt it. But preaching the idea of it being almost necessary to be an employee instead of independent as a licensed physicians seems to be the mantra

You say there are so many multispecialty giants already in place in this country. Certainly true. Nevertheless, there is an ever expanding need for healthcare services in this country that I don't see diminishing anytime soon, so the demand is certainly there for new entities to enter the healthcare game.

There will be many issues in attempting to build such a large company - you mentioned difficulty in recruitment due to low medicare/insurance reimbursements, establishing auxiliary services such as IOP/PPH/LAI, having competent staff, avoiding legal action by employees - Again, I'm not denying that any of these things are false, I figure there must be a way to navigate around these issues with enough determination and creativity. Starting any business like this will be profoundly challenging, but ultimately very rewarding to me personally and also in an altruistic sense - Organization, efficiency, and simplicity is something America's healthcare system desperately needs and I'd like to incorporate some of my ideas/beliefs into how things work in a grander scale than just my own private office.
 
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Regarding sluox,

You say that very large does not equal very profitable and I agree with that statements. Certainly there are plenty of current fortune 500 companies which lost money this year, so can't argue there. Nevertheless, very large can also equate to extremely profitable is the business is managed appropriately. An appropriately managed large business is exponentially more profitable than a small business of equal management quality.

Regarding insurance not negotiating with individual providers, I suspect there is heavy regional variation to this. I'm sure I can find a part of the country which insurance companies are willing to negotiate with me as an individual provider, I'm sure it still gets done to this day and it's certainly not unheard of. And I'm sure they would prefer for all the local psychiatrists to operate out of network, but they ultimately still need to provide psychiatric services to their panel and if they don't they'll loose customers to the ones who do and are willing to negotiate with psychiatric doctors. Nevertheless, I know I won't have much leverage in these negotiations initially, but as I grow more doctors into the group, I'm sure that will change.

If a physician I'm hiring would like to do cash based practice hybrid, this is something we can negotiate and discuss. I would probably look into too myself if the opportunity was right.

Although it might be easier to open a psychiatric practice than a primary care one, I still suspect that many are still inclined to let someone else manage things like officer staff, billing, insurance, etc so I'm sure with the right physician recruitment team and in the right geographic area, I can find doctors to pull into the practice.

And lastly, I think what you're trying to say in your last point is that there's a relative shortage of psychiatrists compared to other specialties relative to the demand and we get enough business directly from the community that we don't need to sellout to larger entities who would take a cut of the profit (such as surgeons working in hospital owned surgical centers or simply larger practices buying out smaller ones). This is certainly true which is why if I'm ever to expand and increase my profit margins per physician, I suspect I'll have to go multispecialty and begin recruiting all types of doctors/staff in order to expedite expansion which I would be more inclined to shift to that strategy sooner than later as I believe in staying within the realm of psychiatry exclusively for too long would stagnate growth.
 
I know 3 different people who accomplished something close to what you're planning.

2 of the 3 take Medicaid, engage in subpar medicine at high volume, but make a lot of money (e.g. yacht, house by the water, etc.). They can hire physicians and offer poor compensation because they're located in a place doctors want to be.

The 1 that doesn't take Medicaid serves a niche population and is located in a place doctors don't want to be. He relies mostly on NPs and has trouble recruiting physicians.

They are all shrewd businessmen and they screwed over many people along the way. They act nice but they are not honest. They cut corners and would not hesitate to throw one of their doctors under the bus to save their own skin.

There are other people with similar ambitions and talk big but they hit a plateau because they are not very good businessmen.

Try to get a successful micro-practice going before expanding into a group practice. Try to get a successful group practice before expanding into a multi-specialty practice. You better have something doctors want which a competitor can't offer or else you'll have a hard time holding on to them.
 
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I'm sure I can find a part of the country which insurance companies are willing to negotiate with me as an individual provider, I'm sure it still gets done to this day and it's certainly not unheard of. And I'm sure they would prefer for all the local psychiatrists to operate out of network, but they ultimately still need to provide psychiatric services to their panel and if they don't they'll loose customers to the ones who do and are willing to negotiate with psychiatric doctors. Nevertheless, I know I won't have much leverage in these negotiations initially, but as I grow more doctors into the group, I'm sure that will change.
You seem so sure of so many things you don't actually know. There's a reason this isn't commonly done (and 1000 psychiatrists? is that ever done?) and it's not because you're better at business than those who have come before you. I agree that dreams and goals are nice but I think you should start a private practice first and then see what it's really like.
 
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Yes, I’m certainly not dead set oh which insurance plans I would initially accept for the practice and it is certainly subject to change as I develop the business and gain experience.

Private insurance plans like Aetna, BCBS, Anthem I suspect would still yield good patient flow minus the hassle that other lower end insurance would have. I could intermix some Medicaid population into the panel as well.

My question is this: Once you get to a certain size and number of physicians, let’s say 200+ I feel like the game would change completely. I envision adopting ultimately a Kaiser like model where we insure the patients directly and cut out the middle man, unless the regional health insurance companies would start offering me amazing deals I’ll take my patients off their panel and insure them directly with my group. That and it would be wise to start opening up/buying out hospitals at that point.

Memorial Herman is a large healthcare system in the Houston area with many hospitals. All specialties and thousands employed. They already provided an “insurance” plan for their employees. They made the jump to insurance offerings for the community and almost went bankrupt in 1 year over it. It was a massive disaster and a case study worth evaluating if that is your goal. They started not charging people that had automatic drafts set-up for premiums and then refused to reinstate their plans if people didn’t notice and pay monthly again.
 
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Memorial Herman is a large healthcare system in the Houston area with many hospitals. All specialties and thousands employed. They already provided an “insurance” plan for their employees. They made the jump to insurance offerings for the community and almost went bankrupt in 1 year over it. It was a massive disaster and a case study worth evaluating if that is your goal. They started not charging people that had automatic drafts set-up for premiums and then refused to reinstate their plans if people didn’t notice and pay monthly again.


It's interesting how people underestimate how difficult scaling healthcare is.

I work with a number of startups who are all about trying to scale telepsychiatry and do exactly what the OP wants to do with apps, etc. The idea sounds great: what an infinite faucet of psychiatrists around the country you can find to pay very little to staff CHMCs! But when you actually try to do it you find that 1. if there's little money in something there's little money to recruit quality people for something, regardless of whether it's "work from home" or not, so you end up recruiting tons of bottom of the barrel people with high staff turnover low patient retainment/revenue capture, and end up losing money. 2. things that are easily done are already done. Squeezing profit margin out of unprofitable payers is not possible and has no value add.

Who would've known being a billionaire is hard?

Things that are harder to get done are next to impossible to get done (regulatory change or institutional adoption, for example), and going into something not knowing what you are doing often result in massive bankruptcies (and in my world losing massive amounts of VC money, etc).
 
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And lastly, I think what you're trying to say in your last point is that there's a relative shortage of psychiatrists compared to other specialties relative to the demand and we get enough business directly from the community that we don't need to sellout to larger entities who would take a cut of the profit (such as surgeons working in hospital owned surgical centers or simply larger practices buying out smaller ones). This is certainly true which is why if I'm ever to expand and increase my profit margins per physician, I suspect I'll have to go multispecialty and begin recruiting all types of doctors/staff in order to expedite expansion which I would be more inclined to shift to that strategy sooner than later as I believe in staying within the realm of psychiatry exclusively for too long would stagnate growth.

There are a few (not many) examples of this. Best known one is Thomas Frist Sr (i.e. grandfather of Bill Frist). Note the family are not psychiatrists and the fortune took GENERATIONS to build, literally. Few surgeons would be willing to work for a psychiatrist owner of a multispecialty practice--for them to sign on they'd want to be equity partners (at best), which will dilute your stake. It's also very geographically dependent: it's next to impossible to start a new for-profit healthcare system in the northeast or california, for a variety of reasons. OTOH there are definitely very niche chains (i.e. buprenorphine clinics. as an example) where large chains emerged out of the northeast. However, people I work with who end up successful in this way had existing experience running systems before they started their own business.

I'll tell you though the most successful PSYCHIATRISTS in the northeast/california did not make their $ this way.

There are other ways to do this, such as actually becoming senior management at an existing large system rather than building a new one from scratch, and once you are on the management team you can start 1. getting high salaries 2. get equity. See: how people like Jaime Daimon and Sheryl Sandberg became billionaires without ever starting a business. Another way to do it is become a physician venture capitalist and just work on the buy-side: good example is how Bain Capital made a ton of money acquiring methadone clinics in the 90s. Interestingly, a decent number of psychiatrists (perhaps out of overall proportion) are in senior management of large systems, and various explanations were offered to me when I discussed this with people.

I think you need a mentor. Find a psychiatrist who own or operate a large multispecialty practice first. You are thinking outloud in a way that makes it very obvious that you don't even know what you don't know.
 
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To echo @sluox 's point, the example of a psychiatrist having done this really successfully is Thomas Detrie, i.e. the guy who basically created UPMC. UPMC is a multi billion dollar system now with 39 hospitals and counting and makes more money from its own insurance premiums than from billing for services. Detrie's protege still runs things.

Even he, however, only was able to launch into this by becoming head of a large psych hospital and then making friends at the medical hospital across the street. This strategy also hinged on aggressively pursuing NIH/NIMH research dollars at a time when these were relatively new finding streams. As a result, the Department of Psychiatry has almost 200 psychiatrists, but this is possible because the Department gets more research funding than just about any other psychiatry department.


So start from the top of a significant institution and pursue non-clinical revenue streams aggressively if you are going to try and make your plan work. Also, see if you can swing it that you do this just as the feds are opening new money spigots for the first time.
 
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Didn’t Obama Care make it illegal for physicians to own hospitals?

Lots of legal nuances and the feds haven't really pursued this enough for unclear regulations to be clarified in courts, so a variety of practices exist.

For example, one big issue that I've personally encountered with is telepsychiatry tech firms owned by physicians (i.e. "CMO/medical director") who also practice in the said practice. Some lawyers say it's illegal. Some say it's fine if it's structured in a certain way. Some say you can't own but you can profit share as a separate physician group (i.e. Permanente Group). Some say it's state-dependent. Some say it's a federal law. These are all prominent boutique healthcare firms or divisions within white-shoe firms.

Let's just put it this way: no less than hundreds of thousands, if not millions, of investors money were spent (and continued to be spent) on consulting specialized law firms by a handful of startup founders in this space since the "mental health tech boom" in the 2010s to ensure that if future litigation ensues, the appropriate (lack of) regulations were vetted to an extent that the defendant would be protected by "advice of counsel defense". I.e. if you take a course of action that's vetted and not with an intent of malice that can be documented, you'll be favorably viewed by the court as they administrate an eventual settlement. And at the end of the day that's the best you can do to maximize your business concern--for example, you'd like to give out equity as a startup to physician early employees, but not if that's banned by federal law (or IS IT??)!

And we still yet to have a real profitable mental health tech company.

It's kind of interesting when you go into the guts of the system to see how this works.
 
-take a couple Medicaid patients and see how you like it

-see how hard it is to hire one psychiatrist before you hire 1000
 
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Let's also look at this from the patient angle. Why would a patient want and choose to go this scaled up national sized practice? Different patients of different level of functioning have different needs AND wants, some times those needs/wants are not aligned.

I for one, would not seek out a Big Box mental health if needed. Psychiatry is a private matter and getting a sloppy diagnosis on your chart, presumably an Epic EMR, will persist forever on the 'Problem List.' More personable care can be had in smaller operations that aren't saddled by Big Box Shop bureaucracy.
 
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Lots of comments here.

Someone mentioned suboxone clinics. I think this would be a great, very scalable idea in today’s age. There certainly won’t be issues acquiring patients with the ever increasing opioid issues this country faces. Also, if I choose to bring multiple providers into the practice, the clear advantage of this is that they don’t have to be psychiatrists. So suddenly my recruitment pool increase vastly as any doctor with the proper training courses can prescribe these medications. Suddenly the idea of bringing thousands of doctors into the practice if I specialize my business to this niche demand becomes more feasible. I could eventually sell the practice to VC/PE based off profit margins and make out with a rather sizable lump sum of cash to pursue further ideas on larger scale, perhaps funding pharmaceutical R&D.

Another beautiful component to this idea is that doctors that sign don’t even need to leave their existing practices. They can work for my chain of suboxone clinics part time and see as many patients as they want while a cut of what they bill goes back up to me, the owner, and then they get their cut. If I do it efficiently and simplistically, I feel I won’t even have to pay recruiters eventually word will spread by mouth of what a great side hustle it is amongst the local/regional physician community and expand from there.
 
Suddenly the idea of bringing thousands of doctors into the practice if I specialize my business to this niche demand becomes more feasible.
I don't think you have any idea how feasible any of this is. There's nothing wrong with starting small to learn how all this works before you plan how to be the biggest.
 
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Lots of comments here.

Someone mentioned suboxone clinics. I think this would be a great, very scalable idea in today’s age. There certainly won’t be issues acquiring patients with the ever increasing opioid issues this country faces. Also, if I choose to bring multiple providers into the practice, the clear advantage of this is that they don’t have to be psychiatrists. So suddenly my recruitment pool increase vastly as any doctor with the proper training courses can prescribe these medications. Suddenly the idea of bringing thousands of doctors into the practice if I specialize my business to this niche demand becomes more feasible. I could eventually sell the practice to VC/PE based off profit margins and make out with a rather sizable lump sum of cash to pursue further ideas on larger scale, perhaps funding pharmaceutical R&D.

Another beautiful component to this idea is that doctors that sign don’t even need to leave their existing practices. They can work for my chain of suboxone clinics part time and see as many patients as they want while a cut of what they bill goes back up to me, the owner, and then they get their cut. If I do it efficiently and simplistically, I feel I won’t even have to pay recruiters eventually word will spread by mouth of what a great side hustle it is amongst the local/regional physician community and expand from there.
Too late, its already being done. Some one beat you to it.
www.idealoption.com
 
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Not to be the bearer of bad news but the fact that you are grandiose at this point in the process does not equate well for the likely reality of the situation. You should be focused on a single entity set up and surrounding yourself with those attendings who are doing these things well and getting valuable input. I had two classmates talk like they were going to start a corporation. One went bankrupt and the other now works at the VA.

Best of luck.
 
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To Sushirolls,

Just because it’s been done before doesn’t mean it’s impossible to improve up their formula and do it better? The demand is clearly there for more of these businesses.

I know this sounds crazy but I’m sure they told Mark Zuckerberg that it’s already been done before it’s called MySpace so forget about it
 
You got a dream and some drive. Fantastic. Keep adding to this thread on future intervals and detail out for everyone your progress. Turn us into believers.
 
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Someone mentioned suboxone clinics. I think this would be a great, very scalable idea in today’s age. There certainly won’t be issues acquiring patients with the ever increasing opioid issues this country faces. Also, if I choose to bring multiple providers into the practice, the clear advantage of this is that they don’t have to be psychiatrists. So suddenly my recruitment pool increase vastly as any doctor with the proper training courses can prescribe these medications. Suddenly the idea of bringing thousands of doctors into the practice if I specialize my business to this niche demand becomes more feasible. I could eventually sell the practice to VC/PE based off profit margins and make out with a rather sizable lump sum of cash to pursue further ideas on larger scale, perhaps funding pharmaceutical R&D.

There are actually several others aside from idealoption. A couple I have NDA with so I can't tell you details. Suffice it is to say, devils' all in the details. Yes, I know of someone who sold to PE. LOL Sigh this person is now running a foundation to do some research / charitable work. Let's just say, the career trajectory is not PGY4 --> successful business owner.

This space is actually VERY difficult to break in now, because of the competitive landscape. Especially with new SAMHSA advisory on allowing telemedicine dispensing of buprenoprhine, and possibly very soon a legislative solution on the telemedicine in methadone, there will be new entrants, so you'll need to be on the leading edge in the field to make money.

Also, in that person's words: I've worked way too many 100 hour weeks in my 40s and 50s.
 
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Appreciate all the comments guys.

Just out of curiosity sluox, how much did the guy you know who worked the 100+ hour work weeks liquidate the business to PE for roughly? How large was it and how long did it take to create? You said he was a psychiatrist/physician or something else?
 
Just know if you initially panel with a lot of insurance companies, and then eventually drop them or switch to cash, you are going to have a lot of upset patients. Not that it has to be a lifetime decision, but if you ever see a time where you are NOT going to see medicare/medicaid, then I wouldn't even do it initially.
 
Appreciate all the comments guys.

Just out of curiosity sluox, how much did the guy you know who worked the 100+ hour work weeks liquidate the business to PE for roughly? How large was it and how long did it take to create? You said he was a psychiatrist/physician or something else?

This is *definitely* covered under the NDA. It's fairly easy to find it if I tell you any of this. Also It would be smart for you in general in the business world these days to not assume gender.
 
The lack formal business terms seems to indicate a lack of business education. There's dozens of problems with this plan. Many of them are classic ways to lose your shirt (e.g., insufficient capital reserves, no market analysis, expanding too quickly, not using formal HR, thinking that investors from series A-C won't set it up to remove you as CEO to be replaced with someone with actual business experience and education, etc).

And I'm sure your ideas about large businesses would be a surprise to the most famous billionaire psychiatrist.
 
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True, but not everyone can invent OxyContin.

I was referring to Jarecki, who did long only positions on silver while working as an academic psychiatrist. And then bought one of a historical properties in Manhattan... and a private island... and another one. Ever notice the name of the director of the Jinx?
 
And yes, regarding Arthur Sackler.. he did not have any formal business training himself and so did many other highly successful people in the modern era within and outside of the realm of medicine which often made me wonder what the utility of an MBA would be if these guys made it so far without formal degrees. I guess being shrewd and having tact and charisma goes a lot farther than a Harvard MBA.

Again, I'm sure there's plenty of reasons that I won't become successful. Anyone can rationalize than, but ultimately no one can necessarily prove it. Perseverance and will seem to go far in this world. I tend to believe in those ideas instead of luck, privilege, or pedigree which others tend to subscribe to.

And regarding the commend that sluox made about assuming gender. I'm not about to get political here, but hasn't everyone used the word guys to refer to a group of people including women? It's just a pronoun that is used by default to describe an individual or individuals. I really doubt most people in the business world or any world would care that I said that. I feel as if they would value efficiency, drive, productivity, and determination above those concepts.
 
And yes, regarding Arthur Sackler.. he did not have any formal business training himself and so did many other highly successful people in the modern era within and outside of the realm of medicine which often made me wonder what the utility of an MBA would be if these guys made it so far without formal degrees. I guess being shrewd and having tact and charisma goes a lot farther than a Harvard MBA.

Again, I'm sure there's plenty of reasons that I won't become successful. Anyone can rationalize than, but ultimately no one can necessarily prove it. Perseverance and will seem to go far in this world. I tend to believe in those ideas instead of luck, privilege, or pedigree which others tend to subscribe to.

And regarding the commend that sluox made about assuming gender. I'm not about to get political here, but hasn't everyone used the word guys to refer to a group of people including women? It's just a pronoun that is used by default to describe an individual or individuals. I really doubt most people in the business world or any world would care that I said that. I feel as if they would value efficiency, drive, productivity, and determination above those concepts.
Appreciate all the comments guys.

Just out of curiosity sluox, how much did the guy you know who worked the 100+ hour work weeks liquidate the business to PE for roughly? How large was it and how long did it take to create? You said he was a psychiatrist/physician or something else?
I don't think it was the guys part...
 
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I don't think it was the guys part...

I mean, yeah, the pronoun the most obvious problem, but OP said "guy", not "guys.". "Guys" is plausibly a gender neutral term of address for a group in American English but the singular is highly gendered.

Female readers who are speakers of American English can consult their intuitions about how strange it feels to think of addressing their girlfriends as "you guys" v. referring to one of them individually as "that guy".
 
In all seriousness, I know there are many more women in business these days, but the majority are still males at that level. That's a simple fact. We can all speculate as to why that is, but in the end of the day I'm just basing my use of the pronoun off of what is most likely in that scenario. If that's offensive to you, then maybe people are a bit too sensitive and easy to be triggered. I applaud any woman physician, etc who would like to start a billion dollar business, go for it
 
I'm very excited for the updates as well Psychdoc4755, I plan to continue to peruse this site for years to come so please keep us updated.
 
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I mean, yeah, the pronoun the most obvious problem, but OP said "guy", not "guys.". "Guys" is plausibly a gender neutral term of address for a group in American English but the singular is highly gendered.

Female readers who are speakers of American English can consult their intuitions about how strange it feels to think of addressing their girlfriends as "you guys" v. referring to one of them individually as "that guy".
Ah, see I was going off the "guys" in the first paragraph when I said that since the "guy" was talking about the same person as the "he" I put in bold.
 
In all seriousness, I know there are many more women in business these days, but the majority are still males at that level. That's a simple fact. We can all speculate as to why that is, but in the end of the day I'm just basing my use of the pronoun off of what is most likely in that scenario. If that's offensive to you, then maybe people are a bit too sensitive and easy to be triggered. I applaud any woman physician, etc who would like to start a billion dollar business, go for it

I don’t think we need to speculate, it’s called sexism and misogyny.

I do love when people come here and post these ridiculous threads though. The same 8 people reply, half of whom are in residency. There is inevitably some comments about grammar or sentence structure. Someone chimes in to say ‘in Texas we do this’. There is some name dropping, and a comment by someone who sees a psychiatrist but isn’t one.

I guess what I’m trying to say is, this is a weird place to come for business advice.
 
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I agree SourceOfDenial. We live in a very sexist misogynistic world and there should be more women in business. I look forward to the day when people default to “she” when referring to billionaires and a bunch of men get offended for assuming.
 
I guess what I’m trying to say is, this is a weird place to come for business advice.

The business information offered here is quite good. That is comparing the suggestions offered here to what is done in the real world.

Instead of viewing it as a forum filled with bunch of residents and mishmash of attendings and other miscellaneous people, I would view it as a conversation with people who are obsessed with psychiatry (so much so they spend their free time). And obession is a key for doing great work.

See: The Bus Ticket Theory of Genius

I feel fortunate that a good number of people obsessed with psychiatry also has a firm grasp of business and are willing to share their thoughts.

Where else would you go to get answers or opinions regarding a particular topic (e.g. business) in a specialized field?
 
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The business information offered here is quite good. That is comparing the suggestions offered here to what is done in the real world.

Instead of viewing it as a forum filled with bunch of residents and mishmash of attendings and other miscellaneous people, I would view it as a conversation with people who are obsessed with psychiatry (so much so they spend their free time). And obession is a key for doing great work.

See: The Bus Ticket Theory of Genius

I feel fortunate that a good number of people obsessed with psychiatry also has a firm grasp of business and are willing to share their thoughts.

Where else would you go to get answers or opinions regarding a particular topic (e.g. business) in a specialized field?

It probably says something that I'm currently reading that link and it's almost about to tick over 2.30am in my time zone :p

It's fascinating stuff. Feel that I probably fall into the interested in lots of different things category, and can reflect on a few times where it has worked out well academically and career-wise so far.

For me this forum provides a nice counterpoint - I'm comparing things across different countries and systems, so it's more about looking at various individual elements to see if anything is relevant and potentially applicable to my own situation. When I think about it more, I actually have multiple psych related resources I regularly read and occasionally contribute to.

On the business side of things I have access to a "business for doctors" Facebook group which provides a lot of information relevant to setting up a medical practice, optimising billings, general tax structuring and investing. Not all of it is relevant as it covers the range of specialities, but a lot of general advice and feedback has been illuminating.
 
Not planning to do this but I know a few people who built psychiatry hospitals (I think there might be a gap in the market since all the community psych centres have been decreasing across the board). I know places like Mclean charge 35k for a week of inpatient stay. I can't imagine a harvard trained psychiatrist to be that much value adding and I'm sure someone dedicated and hardworking could do something similar. Could OP maybe start a few small centres with inpatient beds to profit?
 
Not planning to do this but I know a few people who built psychiatry hospitals (I think there might be a gap in the market since all the community psych centres have been decreasing across the board). I know places like Mclean charge 35k for a week of inpatient stay. I can't imagine a harvard trained psychiatrist to be that much value adding and I'm sure someone dedicated and hardworking could do something similar. Could OP maybe start a few small centres with inpatient beds to profit?
Most states have this Scat filled thing called Certificate of Need.
 
Not planning to do this but I know a few people who built psychiatry hospitals (I think there might be a gap in the market since all the community psych centres have been decreasing across the board). I know places like Mclean charge 35k for a week of inpatient stay. I can't imagine a harvard trained psychiatrist to be that much value adding and I'm sure someone dedicated and hardworking could do something similar. Could OP maybe start a few small centres with inpatient beds to profit?

Didnt Obama make this illegal?
 
Didnt Obama make this illegal?
Why on earth would it be illegal? I feel like this would be a net benefit for the community.
I feel like the certificate of need is a political game, there are always improvements to be made and incumbents pushing back.
Also, I live in Australia as well- I've heard of hospitals needing a certificate of need but surely a small 30-40 bed centre wouldn't need such stringent requirements?
 
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