Clinical Psychologists in private practice

[HiderShaaban]

How are you doing financially if you're in private practice full-time? If you take insurance, how much do insurance companies pay? I'm a psyd student and hope to end up in private practice full-time a few years after I get my degree, and wanted to ask any psychologists here in private practice what I should expect for a salary.

Thanks!

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[erg923]

How are you doing financially if you're in private practice full-time? If you take insurance, how much do insurance companies pay? I'm a psyd student and hope to end up in private practice full-time a few years after I get my degree, and wanted to ask any psychologists here in private practice what I should expect for a salary.

Thanks!

I'm not in private practice (at least not in clinical service anymore), but this can be researched easily based on your preferred/expected geographic location. Research commercial plans and LCD medicare policies and rates for your location.

There is no "salary" in private practice, generally. It's usually a production model and depends if you own the business or are a 1099 employee? It also depends on service offerings, how much you work, and what the 3rd party payor mix is? Medicaid pays terrible, medicare less so, commercial insurance more than that but with higher UR/UM and documentation requirements that will eat up your billable hours.

 

[WisNeuro]

How are you doing financially if you're in private practice full-time? If you take insurance, how much do insurance companies pay? I'm a psyd student and hope to end up in private practice full-time a few years after I get my degree, and wanted to ask any psychologists here in private practice what I should expect for a salary.

Thanks!

Depends in the insurance. Some, not much better than medicare. Some are alright. Also, if you take insurance, factor in the cost of hiring office staff to deal with billing. Otherwise, you will waste s LOT of time doing it. And, in PP, time is money. If I ever go PP, it's going to be cash only. Insurance is a suckers game, and it's not looking to get much better. Especially with huge companies like Amazon and Walmart buying insurance companies.

 

[PsyDr]

How are you doing financially if you're in private practice full-time? If you take insurance, how much do insurance companies pay? I'm a psyd student and hope to end up in private practice full-time a few years after I get my degree, and wanted to ask any psychologists here in private practice what I should expect for a salary.

Thanks!

1) How someone does in private practice is HIGHLY dependent upon work ethic, marketing, geographic area, demand, etc.
2) One should learn about efficiency in billable hours. The legal field is a gold mine for this stuff. Hint: you are not going to be anywhere close to 100% billable hours, ever.
3) I would argue that the majority of psychologists are working about half time, although I am very much in the minority here.
4) There is zero salary. Income= how many hours you work times how much the insurance company pays, less expenses which are far more involved than you'd ever imagine, less contributions to operating budget because income varies and you need reserves, less taxes which are paid quarterly and ALWAYS increase, less retirement contributions, etc. Note: if you have a bad month, your expenses don't change.
5) How much start up capital do you have? How much in assets? Credit score? Spouse who can support you for the period of time you're not profitable?


As to your question about how much to expect: Let's say you have nothing when you go into private practice, no assets, but a 700 credit score. You go to the bank, get a commercial loan for about 10k at around 9%. Office rent is 2k and like all commercial loans it requires 3 years contract and a personal guarantee with a NNN of around $200/month, you get a bunch of furniture for only 1k, a crap computer for 500, bad phone line for 100/month, around $700/month in interest, and you have to live/pay rent/eat.

 

[smalltownpsych]

1) How someone does in private practice is HIGHLY dependent upon work ethic, marketing, geographic area, demand, etc.
2) One should learn about efficiency in billable hours. The legal field is a gold mine for this stuff. Hint: you are not going to be anywhere close to 100% billable hours, ever.
3) I would argue that the majority of psychologists are working about half time, although I am very much in the minority here.
4) There is zero salary. Income= how many hours you work times how much the insurance company pays, less expenses which are far more involved than you'd ever imagine, less contributions to operating budget because income varies and you need reserves, less taxes which are paid quarterly and ALWAYS increase, less retirement contributions, etc. Note: if you have a bad month, your expenses don't change.
5) How much start up capital do you have? How much in assets? Credit score? Spouse who can support you for the period of time you're not profitable?


As to your question about how much to expect: Let's say you have nothing when you go into private practice, no assets, but a 700 credit score. You go to the bank, get a commercial loan for about 10k at around 9%. Office rent is 2k and like all commercial loans it requires 3 years contract and a personal guarantee with a NNN of around $200/month, you get a bunch of furniture for only 1k, a crap computer for 500, bad phone line for 100/month, around $700/month in interest, and you have to live/pay rent/eat.

If you are willing to work hard, then you can make money. I would agree that most psychologists are not working full-time as in they spend a lot of time not generating revenue.
6) How good you are at converting new referrals to more appointments and customer retention verses acquisition and creating solid reputation with referral sources.
I worked in various sales jobs throughout much of my education and I can tell you there are closers and there are those who burn through leads. Same thing happens in this field. If one doesn't have a waiting list, then they need to go find a salaried position where generating revenue doesn't matter. The best way to have a waiting list is to do a good job. People vote with their feet. I do very little marketing and outreach, but my patients keep coming back to their appointments, refer friends and family, and tell the referral source that it is really helping. I am also strict with no-show policy and have an excellent support staff who can fill empty slots from the waiting list. Right now I am booked solid throughout the month of April. I feel comfortable when I am at least a month out so things are going well right now. Over the last four years, it has alternated between almost two months booked and only two weeks during slow times.

 

[HiderShaaban]

How are you doing financially if you're in private practice full-time? If you take insurance, how much do insurance companies pay? I'm a psyd student and hope to end up in private practice full-time a few years after I get my degree, and wanted to ask any psychologists here in private practice what I should expect for a salary.

Thanks!

My understanding is that insurance billing is becoming easier with programs like Therapy Notes, which also helps with scheduling and marketing. Also, if you are in PP, what was your experience when you first started as far as the number of clients? I realize that depends on experience, reputation, and location, but I'm still curious how that pans out.

 

[WisNeuro]

Billing insurance is easy. Actually collecting from insurance, that's the kicker. Seriously, ask anyone who has worked in the field for a few years how many hours office staff have to wrangle with insurance providers.

 

[HiderShaaban]

Billing insurance is easy. Actually collecting from insurance, that's the kicker. Seriously, ask anyone who has worked in the field for a few years how many hours office staff have to wrangle with insurance providers.

Are there insurance companies that are better than others? I know that Aetna is not particularly good in the Philadelphia area where I am. Any way of finding out how much insurance companies pay based on location?

 

[WisNeuro]

Are there insurance companies that are better than others? I know that Aetna is not particularly good in the Philadelphia area where I am. Any way of finding out how much insurance companies pay based on location?

Nope, insurance carriers do not release their reimbursement numbers. And, they negotiate it with each provider/system in many cases.

 

[HiderShaaban]

Nope, insurance carriers do not release their reimbursement numbers. And, they negotiate it with each provider/system in many cases.

At this point then, I guess it might be more desirable to be out of network. But that wouldn't cut down on the possible number of clients and seem unappealing to clients because then they have the burden of dealing with their insurance.

 

[Therapist4Chnge]

Insurance is almost always universally bad. The hoops, the hassle, and the declining rates. When I took commercial insurance I negotiated my own rates and only took the top 2-3 (for what I bill).

Rates are highly variable and are very geographically dependent. Knowing your local market helps. Also, working in a niche area helps so you aren’t competing against all generalists and/or mid-levels.

 

[WisNeuro]

All depends on supply and demand. If I were going to go PP in my area, I wouldn't take insurance. But, most neuro clinics in our metro area are at a 6+ waiting list. So, lots of opportunities to pick up people who can afford to pay and don't want to wait that long. Also, I have a good relationship with several Neurology clinics. Now, for genera psychotherapy services in this area, it's easy to get into places within a couple weeks. So, in those cases, I imagine many people would be looking at options that their insurance would pick up first. It'd take a lot more time to build up a cash only practice for therapy in my area. So, you'd better have a decent amount of capital as you are going to burn through more overhead than cash flow coming in for a while.

 

[Doctor Eliza]

Another option is to work for a group practice, particularly when you are just starting out and learning the ropes. You won't get rich this way, but it can provide a steady stream of referrals, office and billing support, etc. I work in a group practice with a 60-40 split. I like what I do, but the money is a bit of a bummer. I probably would have branched out on my own by this point, but I only want to work PT hrs in PP (I have a second PT contractor job too.)

Good luck.

 

[foreverbull]

I'm in PP part-time and pretty new to it. I started out full-time and working on marketing/making contacts with my empty schedule, but switched over to a part-time job to make ends meet.

I think the main thing that people don't realize is how expensive it is to practice privately. Assume you will toss away $800-$1100/month for business costs alone (rent, licenses, professional memberships, general liability AND malpractice insurances, business phone, internet, supplies, software, website/domain, PsychologyToday listing, decor, etc.). That's assuming low monthly office rent (like $400-600). You'd need about 10-12 weekly clients before you start to see a few thousand in take-home pay, which could take a year+ to build up to, depending on several factors. My colleague and I are still building our practice (less than a year in), so we are not anywhere near self-sustainable. We've found that finances are a significant barrier to some folks coming weekly, but we are slowly gaining a reputation mainly via our online presence and local marketing. That said, we we both work other jobs because the business is growing slowly.

If you get a $65K job with benefits and vacation days, to make the same amount of money in private practice, you would have to make in the $85K+ range to offset business costs, health insurance, retirement plan, vacations/sick days, taxes, etc. Folks don't usually realize how expensive those extra benefits are that you now have to come up with on your own. A few cancellations here and there from clients can set you back quite a bit of money, which is something I didn't have to worry about at my other jobs.

Insurance will significantly cut your income down, although the trade-off is your schedule will fill up faster. Most companies reimburse about $70-$90/hr. Take out 35% for taxes, and suddenly that number doesn't look as attractive when you have to deal with billing issues/spend more time chasing reimbursement on top of being paid less than full fee. Some folks do get on panels for awhile and then build a reputation and then get off of panels, so there are different options.

Many factors will play into how quickly your business builds. Demographics (SES), your niche/specialty, local competition, fees/insurance panels, how aggressively you market your services/network, how professional & approachable you appear on your website, etc.

It's a huge undertaking and not to be done lightly.

 

[bcliff]

For neuro folks, any input on working full time (or, nearly full-time) in a salaried, academic/staff psychologist position, and doing IMEs, etc. on the side? I'm always curious how much of a bump there is in pay for people who supplement their salaried positions with this kind of private-pay work -- I've worked with some supervisors who do, what seems like, around 1/week in addition to their full-time positions. I've seen some others in more "flexible" positions do even more (and still more during the summer when not contracted).

 

[Sanman]

Agreed with the others here for the most part. The answer to your question is that the salary is the greater of zero and whatever the managing partner offers you. When you think in terms of overhead and net profit, you are ready to think about solo PP. As an aside, people get all up in arms when experienced people here are so averse to student loans and debt. The above is the reason why.

 

[PSYCHEVAL3]

I’ve been in full time private practice about 10 years. There is lots of variability from practice to practice. Good business skills are critical. While there is no salary in private practice, I essentially decide what I want to make in a given year then determine how much productivity and passive income I need to reach those goals (yearly, quarterly, monthly, weekly, and daily). I probably have 40 payer sources, but you asked about insurance. The average insurance panel I am on pays $125 for an intake (I do 2 an hour) and $ 95 for family therapy, and $100 for a unit of testing. I get the best return on my time when not doing insurance work. For instance, $ 2 k for a competency evaluation may take me 4 hours total. I’m a PhD Psychologist, and last year I made substantially more than the average psychiatrist. However, I’m in a rural area, with nearly no competition, with nearly unlimited business, and have a bit more tempo than most. Blessed.

 

[LPPSYD]

I'm not in private practice (at least not in clinical service anymore), but this can be researched easily based on your preferred/expected geographic location. Research commercial plans and LCD medicare policies and rates for your location.

There is no "salary" in private practice, generally. It's usually a production model and depends if you own the business or are a 1099 employee? It also depends on service offerings, how much you work, and what the 3rd party payor mix is? Medicaid pays terrible, medicare less so, commercial insurance more than that but with higher UR/UM and documentation requirements that will eat up your billable hours.

Oddly enough, in my state (NJ) Medicaid and Medicare are paying a good amount more than commercial insurance, which is one of the many reasons I don't accept any of the latter. I think it really varies.