Child Psychiatrist in CA - salary of $250,000/year??

[CaliforniaGreen]

My friend, who is in training to become a child psychiatrist, says he will be going into private practice and plans to make $250,000 per year. I told him that sounds a lot higher than the average salary I have heard about for psychiatrists. This is the calculation, roughly, he told me (can't remember all the exacts). Since I know nothing about these costs, still being a medical student, I was surprised - what holes are there in his calculations? He went over the calculation with me:

After he builds up his practice, if he sees 12 patients per day (30 minute appointments), 5 days a week, and at 22 work days in the month, he will have 264 appointments per month, x 12 = 3168 appointments per year.

He plans to charge out of pocket $100/appointment

3168 x 100 = $316,800/year

- $20,000/year malpractice insurance
- $30,000/year if he hires an employee receptionist
- $16,000/year if he rents an office (as opposed to working from home)

= $250,000/year


And if he chooses not to hire someone and work from home, then:


= $296,000/year


WHAT? This can't be right, that is way more than most doctors make.



His wife's work carries benefits for the family, so he says he does not need to purchase benefits himself.

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[Manicsleep]

Your 'friend' is only going to see 12 people at 30mins each? Thats 6 hours a day for 30 hours in a 5 day week.
Its much more likely that he will have 10-12 15 min visits and 4-6 at 25mins and one or two 50 mins. He will probably work a 50-60 hour week with at least some time on the weekends catching up on paperwork.
If he is smart, his 'receptionist' will be part time and also an MA or psych tech.

But to your original question. Yes, that is easily achievable.
I am an adult psychiatrist and I make more than that although I average about 55 hours per week with shared call (75 if you count on the job web surfing and other screwing around). I also have excellent benefits that are not included in that.

You can make 500+ in california as a child psychiatrist if you are willing to live in the right areas and work a flexible schedule that includes call and a few weekend shifts. No, this doesn't include anywhere near the beach.

Plus he will probably eventually own his own building, be a corporation, pay himself a low yearly salary and (legally) hide all that money from Uncle Sam. The real savings of your own business and being your own boss are immense if you do it right. The satisfaction usually correlates with the headaches.

 

[MellowYellowCA]

You can make 500+ in california as a child psychiatrist if you are willing to live in the right areas

where is that?

 

[MellowYellowCA]

Plus he will probably eventually own his own building, be a corporation, pay himself a low yearly salary and (legally) hide all that money from Uncle Sam. The real savings of your own business and being your own boss are immense if you do it right.

legally?!

how does one "do it right"?

 

[Manicsleep]

x

 

[michaelrack]

.

He plans to charge out of pocket $100/appointment

$100 is low for a 30 min appt. The minimum most psychiatrists would charge would be $150.

 

[michaelrack]

There are ways you can be creative with your income. For example, you can have a corporation of which you are an employee and also be its only stockholder. That corporation can pay you whatever salary and invest the rest of the money. Mine invests in a variety of things. In the end I pay very little in taxes and I will be able to retire early with real estate and a few other businesses that will generate revenue for me.

Get a business plan and a good tax attorney.

My understanding is that the government was cracking down on this, especially with S-corps and Professional service corporations. Do you have a C-corp???

 

[CaliforniaGreen]

$100 is low for a 30 min appt. The minimum most psychiatrists would charge would be $150.

is everything else right about his calculation?

how willing are patients to pay $150 out of pocket?

if these calculations are accurate (or even understating), then why is the average psych incomes still around 160K, while the average hours worked around 45 hrs/week?

 

[Manicsleep]

My understanding is that the government was cracking down on this, especially with S-corps and Professional service corporations. Do you have a C-corp???

I do have a (very recently formed) c-corp because I am in a partnership with other people through their corporations and there are limitations on s-corps, not because of IRS. I used to have an s-corp and it worked out fine. An s-corp is possible as long as you give yourself a reasonable salary and don't try to cheat the rules. I was audited about a year ago (i formed an LLC very early on, mostly on my own) and I passed with flying colors.

A good (with a second not being a bad idea) tax attorney is your best guide here. Don't try to do this yourself. The rate of audits with tax returns prepared by tax attorneys is very low. None of this is 'too good to be true' stuff. There are serious complications and headaches involved with this.

 

[michaelrack]

is everything else right about his calculation?

NO.

You are overstating the cost of malpractice, and underestimating the cost of office support- receptionist, billing, transcription, etc.


"why is the average psych incomes still around 160K"

Most psychiatrists in private practice make over 180k

Many gov psych jobs pay around 150k - VA, many state hospitals.

Some of the income of employed docs in private practice is going to the employer (the psychiatrist who hired them, in many cases).

 

[michaelrack]

how willing are patients to pay $150 out of pocket?

?

Often the psychiatrist will give the pt a statement to submit to their insurance co, which will often pick up half the cost. Patients who are getting benzo's or stimulants are often more willing to pay the fee than a patient getting just an SSRI.

Some psychiatrists, esp those just starting out, will bill in network with some insurance companies, in which case the patient copay would be similar to a standard doc visit. These psychiatrists, however, will find it difficult to make 250 k per year.

 

[michaelrack]

A good (with a second not being a bad idea) tax attorney is your best guide here. Don't try to do this yourself. The rate of audits with tax returns prepared by tax attorneys is very low. None of this is 'too good to be true' stuff. There are serious complications and headaches involved with this.

thanks for the tips. I already have a health care attny to help me deal with Stark and other legal issues regarding the sleep labs I work with. I guess I am goint to have to get a tax attorney now.

 

[CaliforniaGreen]

In private practice, do you get to pick your patients?

I know there are strict rules on discontinuing with a patient once the patient-doctor relationship has begun, but if you think a patient will be difficult - for example, combative in your office - are you able to refuse working with that patient before you begin seeing him or her?

Are you able to screen for which patients you want to work with and/or which conditions or ages you want to treat?

How far does a patient have to go to allow you to discontinue the relationship? What if a person does not pay, constantly argues with staff, or constantly shows up late to appointments? Are any of those grounds for discontinuing?

 

[Manicsleep]

x

 

[Manicsleep]

x

 

[CaliforniaGreen]

Yes

Yes to which one? Thanks

 

[Manicsleep]

x

 

[Majesty]

You can be picky in private practice but its only really possible in underserved areas. Otherwise you have to work pretty hard.
Its easier as a child psychiatrist but how are you going to screen? By the parents? In my experience the parents are the crazy variable.

 

[CaliforniaGreen]

Thought I'd renew this thread after hearing today from an ER resident that "psychiatrists don't make any money after 4 years of training"

I really don't know why more psychiatrists (in private practice, especially child psych) don't make big money. What keeps people from seeing 15 patients a day, 30 minutes each at $150, seeing them every 3-4 weeks, 260 days a year, if living in more affluent areas and taking out of pocket (with partial insurance reimbursement) ... and making around $500,000 annually? (not including rent and light staff support which may be around $100,000/year)

I assume this would require having a stable patient base of around 200 patients, perhaps this is the main problem? Or is it missed appointments? Around where I am from it's easy to find patients who would pay out of pocket $150 for a 30 min appointment, so that can't be it...?

I know salary isn't everything, but it seems like a major factor in more people not going into psychiatry is this reported average salary of 160K? Seems like making $300K, like a radiologist or surgeon, if you organize yourself properly shouldn't be too difficult, if payment is the thing keeping medical students out of psych?

 

[jettavr6]

Completely depends on what type of setting you are in. Working for a system like Kaiser; 250K for a child psychiatrist is definitely possible with a couple of years experience. At other places, your salary may be 180K, but you have private practice and call opportunity which increases your take home pay...

Lot of flexibility and variability when it comes to pay in Psychiatry. The field is on the uptrend now in terms of compensation. What the future will bring is anyones guess.

 

[Red Beard]

Thought I'd renew this thread after hearing today from an ER resident that "psychiatrists don't make any money after 4 years of training"

And ER docs are looking for the exit sign 4 years into practice

I kid, I kid.

 

[Chimed]

Completely depends on what type of setting you are in. Working for a system like Kaiser; 250K for a child psychiatrist is definitely possible with a couple of years experience. At other places, your salary may be 180K, but you have private practice and call opportunity which increases your take home pay...

Lot of flexibility and variability when it comes to pay in Psychiatry. The field is on the uptrend now in terms of compensation. What the future will bring is anyones guess.

Some of the soon to be child fellows have seen jobs offering up to 300K per year. But these places are usually in areas like North Dakota and other areas that have a really hard time attracting psychiatrists to the area. Making 250K to work at Kaiser (in California?) is pretty good...

 

[CaliforniaGreen]

Any more thoughts on what is keeping more child psychiatrists in private practice from making over 300K, if they wanted to?

 

[carlosc1dbz]

Any more thoughts on what is keeping more child psychiatrists in private practice from making over 300K, if they wanted to?

You know what the big problem is? The fact that everyone thinks it is taboo to speak about compensation. What ends up happening, is that doctors entering the workforce, have no clue what they should be getting paid. That lets hospitals take advantage of them, it lets insurance companies take advantage of them, and the government too.

This is a forum that should educate doctors as well as future doctors about the current issues and trends in the field of psychiatry. Everyone needs to stop withholding the valuable information.

I have a story for you guys, its happened during my 1st year in medical school. My attending was pissed off because one of the senior family medicine residents ready to graduate had signed an offer in New York. He was very excited about graduating, and duing the conversation with the attending he mentioned that he was going to be getting paid 90K a year. What!! said the attending, he was pissed. Yes it was the residents fault, because he could of simply searched what an appropriate salary is from the internet regardless of if its wrong, it would have still said 150k.

The point is, speak up so that things like this dont happen. Yeah I understand that the 90K story is kinda rare, but the information can help others in the field.

 

[fiatslug]

Completely depends on what type of setting you are in. Working for a system like Kaiser; 250K for a child psychiatrist is definitely possible with a couple of years experience. At other places, your salary may be 180K, but you have private practice and call opportunity which increases your take home pay...

Lot of flexibility and variability when it comes to pay in Psychiatry. The field is on the uptrend now in terms of compensation. What the future will bring is anyones guess.

I graduated from CAP fellowship in July, and was offered a position as a child psychiatrist for Kaiser (PNW) with starting salary of $180. IIRC, you got annual raises of ~$10K until topping out at ~$220, but with some kind of complicated bonus system that would ultimately keep your salary ever creeping upward.

I didn't take the job. Got a better salary & equivalent hours working in a partial hosp program for adults. I miss working with kids & families but I like that my job ends when I close my office door--so not the case when working with kids.

Remember that child has a *ton* of uncompensated time. Talking with all the players--parents, stepparents, foster parents, DHS, schools--is a big part of doing a thorough evaluation, and AFAIK, it's essentially uncompensated time (at least in terms of what you can bill insurance for). I do know child psychiatrsits in PP who are making in excess of $300K, but they are working 5 days a week and long days. I can't speak to what parents might be willing to pay out of pocket... In certain areas, like Silicon Valley, I heard of child psychiatrists charging $400 & up/hr, and that if they charged less, they were thought of as being not as good as others

 

[Donkeykiss]

I dont think the original posters business plan is unfeasible, you need the fee for service patients but its going to be a buyers market as docs retire. Charging that amount makes it more likely a person will pay out of pocket and maybe undercut any others in area. but why charge 100 when you can 99 dollars this is still a business and it effects whether a person will pay out of pocket or not

If he spaces his patients and after he knows them hell have an idea of how long each will take he should avoid the employee, its 30k a yr plus benefits taxes etc and seeing an extra pt or 2 a day wont be worth it

Im all for the home office in this down market and economy, tax breaks unparalled and irs doesnt flag it anymore not to mention no commute and no big deal if an emergency or cancellation, allows u to be flexible for pts

practice software and answering services can easily replace the receptionist and you can even hire a more full service answering service to perform more functions for nominal costs

for gods sake dont look at those surveys, if ur an employee at a hospital obviously outright salary is less and people may be paid as an s corp so those numbers mean nothing

only a sucker doesnt work for themselves not like psych has much overhead worth sharing

and if you dont want a home office at least but a mix use building and let the rent cover the mortgage, office condos are worthless investments and youre gonna be practicing for awhile so why rent

parent/teachers need limits too, chances are the kids off because of the parents own issues and i dont even see why a teacher woulf be involved. besides the fact that yea making a kid since 6-7 hrs a day and learn 90% worthless nonsense would drive anyone crazy

the entire education system is antiquated, counterproductive and a blackhole fof money

im not a child psych but thinking about it and see positives and negatives, not sure what the trainings like but i imagine it should really be a totally different approach then adult. obviously more emotionally draining and rewarding if things work out. but parents/teachers see negative behavior and forget how odd and scary the world looks when youre a kid, not even if theyve been traumatized, and most of it is totally understandable

i bet most of the time you would really need to be treating both the kid and parent at same time, separate sessions mainly maybe some joint to really see major progress

face it most parents if not *******s dont know what they are doing

 

[Donkeykiss]

dont forget with kids u dont have to deal with medicare as well

with eclaims and billing we really shouldnt need someone to do for us as well, can think in terms of paying someone $20 an hour to do it when you net avg of 80-90 an hr, se tax, income tax, etc as well as sometimes an hour of mindless work in front of the tv is no big deal

knowing how youre practice works in all aspects allows you to run it more profitable

dont give amphetamines to kids, no way in hell does that work out in the end, just give the parent .5 mg clonazepam

I dont think the original posters business plan is unfeasible, you need the fee for service patients but its going to be a buyers market as docs retire. Charging that amount makes it more likely a person will pay out of pocket and maybe undercut any others in area. but why charge 100 when you can 99 dollars this is still a business and it effects whether a person will pay out of pocket or not

If he spaces his patients and after he knows them hell have an idea of how long each will take he should avoid the employee, its 30k a yr plus benefits taxes etc and seeing an extra pt or 2 a day wont be worth it

Im all for the home office in this down market and economy, tax breaks unparalled and irs doesnt flag it anymore not to mention no commute and no big deal if an emergency or cancellation, allows u to be flexible for pts

practice software and answering services can easily replace the receptionist and you can even hire a more full service answering service to perform more functions for nominal costs

for gods sake dont look at those surveys, if ur an employee at a hospital obviously outright salary is less and people may be paid as an s corp so those numbers mean nothing

only a sucker doesnt work for themselves not like psych has much overhead worth sharing

and if you dont want a home office at least but a mix use building and let the rent cover the mortgage, office condos are worthless investments and youre gonna be practicing for awhile so why rent

parent/teachers need limits too, chances are the kids off because of the parents own issues and i dont even see why a teacher woulf be involved. besides the fact that yea making a kid since 6-7 hrs a day and learn 90% worthless nonsense would drive anyone crazy

the entire education system is antiquated, counterproductive and a blackhole fof money

im not a child psych but thinking about it and see positives and negatives, not sure what the trainings like but i imagine it should really be a totally different approach then adult. obviously more emotionally draining and rewarding if things work out. but parents/teachers see negative behavior and forget how odd and scary the world looks when youre a kid, not even if theyve been traumatized, and most of it is totally understandable

i bet most of the time you would really need to be treating both the kid and parent at same time, separate sessions mainly maybe some joint to really see major progress

face it most parents if not *******s dont know what they are doing

 

[nitemagi]

Did you just really resurrect a year-old post for no reason then quote yourself in your own post?