Expected income in PP

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taylortaylor164

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Hi,
I am looking to start out in private practice and am setting my ideal schedule and fee structure. I am trained in both psychological assessment for ADHD, learning disabilities, and diagnostic evaluations in addition to multiple therapy modalities and would like to provide both of these services. Starting out, I see myself offering 1 assessment per week, around 10 therapy clients per week, and 1 assessment intake and 1 assessment feedback per week. This gives time for writing as well. It looks like a going rate in my area for assessment would be around 2k and hourly therapy as being $150 an hour. Assessment and feedbacks are $200 an hour. I do plan on taking insurance, and I know that changes the numbers since they determine many of the prices. Assuming those numbers, everyone shows, no insurance screwups/changes, and not including practice costs, no benefits, and 48 weeks worked per year, that is $187,200 a year. I know this is an overestimation, especially starting off, but is this possible? Am I completely off base? It seems like salaries I have heard of from PP are lower.
 
Check the LCDs for insurers in your area, in this area, no one is getting close to 2k for ADHD evals from third party payors. If they allow the evals at all, it's usually restricted to a clinical interview and some questioannaires.
 
You should definitely not figure out your projected income levels using assumptions like "everyone shows." You should be figuring using something like a 20% no show rate, like @Sanman said. You also shouldn't be figuring using no assumptions for space, etc. What does space cost in your area? Are you cool with a simple 1 room office with a waiting room shared with the chiropractor and essential oil rubber (idk what they're called) on the same floor or do you want a posh space with your own waiting area? Receptionist? Costs for the testing materials? Who is your out of pocket clientele paying 150 per session? There's a LOT there to be figured out. A hint is that you have projected yourself to be working quarter time and yet making more than 5x the median US household income.

I charge about 2k for my evals. Insurance is hell for adult ADHD/LD, I don't take it. Every decent EHR can make a superbill.

I have an entire talk I give on the business of PP for our grad students. Being a semester away from being done my MBA has helped me a lot on this front. I should probably monetize that and offer it more widely. 🙂
 
MCParent said:
You should definitely not figure out your projected income levels using assumptions like "everyone shows." You should be figuring using something like a 20% no show rate, like @Sanman said. You also shouldn't be figuring using no assumptions for space, etc. What does space cost in your area? Are you cool with a simple 1 room office with a waiting room shared with the chiropractor and essential oil rubber (idk what they're called) on the same floor or do you want a posh space with your own waiting area? Receptionist? Costs for the testing materials? Who is your out of pocket clientele paying 150 per session? There's a LOT there to be figured out. A hint is that you have projected yourself to be working quarter time and yet making more than 5x the median US household income.

I charge about 2k for my evals. Insurance is hell for adult ADHD/LD, I don't take it. Every decent EHR can make a superbill.

I have an entire talk I give on the business of PP for our grad students. Being a semester away from being done my MBA has helped me a lot on this front. I should probably monetize that and offer it more widely. 🙂
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Thanks. I would pay good money for that talk!
 
I'm no expert, but would agree you're going to want to factor in an anticipated no-show rate, which I would say is at least 10%, even if you have a full-time scheduler who can attempt to fill cancelled/no-showed spots on the fly. Probably better to over-estimate than under-estimate this rate. As was suggested, you can also get ballpark ideas for expenses like rent, insurance, office supplies, and testing materials; the good news is that in PP, much if not all of that can be deductible.

If you take insurance, expect that payments will be delayed, some clients won't pay co-pays, and some bills just won't get paid by the insurance companies. I personally would probably hire a billing company/professional just to preserve my sanity unless my insurance cases were few and far-between. I think the cut they take can vary depending on your volume of business. Or as was said above, you can forego insurance (don't forget to explicitly opt-out of Medicare) and just give superbills, if that seems sustainable in your area.

PsyDr usually also comes in with some helpful hints, like getting "depreciating assets" that actually hold their value (e.g., furniture). Having a good CPA and tax attorney is a must, and you'll want to try to anticipate those expenses as well.
 
1) "salary" is not the same as gross revenue. $187k gross is easy. Now go look up what it costs to rent an office, including NNN. And answering service or staff. And internet services. And office furniture. And office equipment. And billing services. And billing software. And your own health insurance. And retirement contributions. And credit card machines. And CPAs. After all of that, you still have to pay the taxes.

2) IME, the flow of business is less steady than one would imagine. Those 48 weeks will have wildly different amounts of work. Think about the flow of business in restaurants. They are busy at meal times, with spikes in during some holidays, and dead times in other periods. PP can have a similar flow. That week around Christmas is often dead, even if you're not serving a religious community. The demand for LD evals is usually low in summers and unreal after the first grading period of school. Same goes for a lot of our work. Someone calls and needs services now. Do you take the business and work more? Or do you put them on a wait list and hope that this doesn't affect your future business? What about if your insurance contract requires quicker service? Do you let that contract go, or do you work extra that week?

3) Cash rates are not representative of insurance rates. The going cash rate might be $150/hr, but Insurance A might pay $98, while Insurance B might pay $140. And then there are claims you do not get paid for, and maybe there are services that they don't pay for at all (e.g., you had to work longer than the max # of units allowed for a testing case). Average that cash rate, insurance a rate, insurance b rate, and a zero. It's sub $100/hr average.

4) Revenue has to be managed. Notice all the people selling tests during the pandemic? Things happen. Sometimes your payments can get delayed months, or you can have a low month, or you can have additional expenses. However, your expenses will keep coming. The IRS believes you make more each year, and bills you quarterly. Plus you got an additional social security tax bill.

5) It gets more complicated when you start having money, because then the strategy changes.
 
My rule of thumb is to multiply annual salary by 225% and more like 250% if you want to compare to a federal job (or similar job with great benefits and job security).

For example, current annual salary for a GS-13, Step 1 VA psychologist in the "Rest of the United States", i.e., no locality pay boost beyond the standard 15.95%, is $92,143. (You can usually reach that level once you get licensed.) Therefore, if you wanted to do full-time private practice and earn a similar amount, you would need to generate a gross income of $230,358 (92143•2.5).

Also, plan on earning that gross income working 46 weeks a year if you want to stay equivalent to a good salaried position. If you can do 30 billable hours per week, which means about 50 total work hours per week if you're above average efficient (60 work hours a week for typical efficiency), you'll need to collect $167/hour on average. If you average $125/hour, then you'll need to collect on 40 billable hours (67 to 80 total work hours per week). Finally, note that I used the verb, "collect", i.e., you can't just bill $5000/week, you need to collect (actually get paid) $5000/week.

Why so much more? See the posts above for good explanations. It's common to underestimate the value of paid leave (sick/medical & vacation), good health insurance (including dental & vision), not having to pay self-employment tax, and the amount of time, energy, and cash you need to invest in marketing, administration, etc.

For those of you who have been in private practice, do those numbers seem about right?
 
Adding to the above, if one is doing 100% clinical work (particularly therapy) with the majority being insurance-based, I don't know how feasible it is to match in PP the total compensation offered by hospital systems and other large employers (e.g., VA). Others who work directly in this area can of course correct me. In neuropsych, broadly speaking, individuals in PP earn more and have higher job satisfaction than those in institution settings. They also are more likely to participate in some amount of forensic work, which likely isn't a coincidence.
 
You people are bad at it. PP is MUCH better at wealth generation.

1) At the MOST basic, PP allows one to use a SEP IRA. This instrument allows you to convert ~ 25% of gross into a retirement account. Using this 180k number, because I’m tired and lazy, that’s 45k/yr of personal wealth. That blows away any federal retirement. And it can be inherited.

2) PP allows you to buy appreciating assets. Using the SEP account as leverage, you could borrow a few million, buy an office building, put that building into an llc, and then have your PP rent space from your office llc. A decade later you own a building, which is worth a million plus. Do the same with wall art, office furniture. Buy the desk from a historical figure. It depreciates as an office durable. After you max out depreciation, you sell it to yourself. Why do you think the rich buy private jets? Rent that out for revenue, depreciate the jet until it’s hit maximum , sell it for more than what you’ve depreciated, and you’ve just gotten a free jet and revenue for 5 years.

That’s just the simple stuff.
 
PsyDr said:
2) PP allows you to buy appreciating assets. Using the SEP account as leverage, you could borrow a few million, buy an office building, put that building into an llc, and then have your PP rent space from your office llc. A decade later you own a building, which is worth a million plus. Do the same with wall art, office furniture. Buy the desk from a historical figure. It depreciates as an office durable. After you max out depreciation, you sell it to yourself. Why do you think the rich buy private jets? Rent that out for revenue, depreciate the jet until it’s hit maximum , sell it for more than what you’ve depreciated, and you’ve just gotten a free jet and revenue for 5 years.

That’s just the simple stuff.
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honestly, my former step father operated his business much like this. He was an LCSW and worked for an agency for a while before starting his own practice with some colleagues. They focused on a certain niche, government funded service. Eventually they bought a building and leased office space back to their business. They never owned a jet, although there was a limo for some years.
 
AcronymAllergy said:
Adding to the above, if one is doing 100% clinical work (particularly therapy) with the majority being insurance-based, I don't know how feasible it is to match in PP the total compensation offered by hospital systems and other large employers (e.g., VA). Others who work directly in this area can of course correct me. In neuropsych, broadly speaking, individuals in PP earn more and have higher job satisfaction than those in institution settings. They also are more likely to participate in some amount of forensic work, which likely isn't a coincidence.
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That is only true if you assume you will be a solo practitioner, which is kind of a pointless use of insurance-based psychotherapy as all it provides is volume. My old boss is filthy rich and we accepted everything including medicaid and medicare. However, he was far from a solo practitioner as he had dozens of employees.
 
Sanman said:
That is only true if you assume you will be a solo practitioner, which is kind of a pointless use of insurance-based psychotherapy as all it provides is volume. My old boss is filthy rich and we accepted everything including medicaid and medicare. However, he was far from a solo practitioner as he had dozens of employees.
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Good point. As is what PsyDr added above.
 
Sanman said:
Agreed, but it also requires you to navigate much greater risk than a federal job. If you are in a positon to do so, you have the potential to accumulate much greater wealth.
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The risk is somewhat relative. There's a slight ramp up period, which will vary depending in your specialty. It's quick for neuro, especially if you take insurance. But, after that, your workload is whatever you want it. Throw in legal work, and you can get what you would in government service (including benefits) for 1/3-1/2 the work, hourly speaking. And, if you have a good CPA and lawyer in your rolodex, the risk is still fairly minimal. I think it sounds more daunting than it actually is, which scares a lot of people away. Especially if you have a friend/colleague who has been doing it for a time who can act as a sort of mentor, it's a fairly easy transition.
 
WisNeuro said:
The risk is somewhat relative. There's a slight ramp up period, which will vary depending in your specialty. It's quick for neuro, especially if you take insurance. But, after that, your workload is whatever you want it. Throw in legal work, and you can get what you would in government service (including benefits) for 1/3-1/2 the work, hourly speaking. And, if you have a good CPA and lawyer in your rolodex, the risk is still fairly minimal. I think it sounds more daunting than it actually is, which scares a lot of people away. Especially if you have a friend/colleague who has been doing it for a time who can act as a sort of mentor, it's a fairly easy transition.
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Not the hardest thing in the world, the biggest hurdles, imo, are having the funds available to manage inconsistent income and being able to access affordable health insurance. Beyond that, anyone with a PhD should know how to learn the basics of business and getting paneled with insurance or advertising.
 
PsyDr said:
You people are bad at it. PP is MUCH better at wealth generation.

1) At the MOST basic, PP allows one to use a SEP IRA. This instrument allows you to convert ~ 25% of gross into a retirement account. Using this 180k number, because I’m tired and lazy, that’s 45k/yr of personal wealth. That blows away any federal retirement. And it can be inherited.

2) PP allows you to buy appreciating assets. Using the SEP account as leverage, you could borrow a few million, buy an office building, put that building into an llc, and then have your PP rent space from your office llc. A decade later you own a building, which is worth a million plus. Do the same with wall art, office furniture. Buy the desk from a historical figure. It depreciates as an office durable. After you max out depreciation, you sell it to yourself. Why do you think the rich buy private jets? Rent that out for revenue, depreciate the jet until it’s hit maximum , sell it for more than what you’ve depreciated, and you’ve just gotten a free jet and revenue for 5 years.

That’s just the simple stuff.
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I will say that for point 2, you don't need to be in PP. Been looking for a property that I can purchase for a future practice and keep rented out right now as a lowly federal employee.
 
Sanman said:
I will say that for point 2, you don't need to be in PP. Been looking for a property that I can purchase for a future practice and keep rented out right now as a lowly federal employee.
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You don't have to be in PP for most investments, but PP offers access to additional investment tools. Anyone can be thoughtful and purchase things that maintain value.

Example: You have a $500 budget for wall art for your office. Which is smarter? $500 worth of generic wall art that will be worth nothing when you die OR $500 worth of signed Picasso lithographs?
 
MCParent said:
You should definitely not figure out your projected income levels using assumptions like "everyone shows." You should be figuring using something like a 20% no show rate, like @Sanman said. You also shouldn't be figuring using no assumptions for space, etc. What does space cost in your area? Are you cool with a simple 1 room office with a waiting room shared with the chiropractor and essential oil rubber (idk what they're called) on the same floor or do you want a posh space with your own waiting area? Receptionist? Costs for the testing materials? Who is your out of pocket clientele paying 150 per session? There's a LOT there to be figured out. A hint is that you have projected yourself to be working quarter time and yet making more than 5x the median US household income.

I charge about 2k for my evals. Insurance is hell for adult ADHD/LD, I don't take it. Every decent EHR can make a superbill.

I have an entire talk I give on the business of PP for our grad students. Being a semester away from being done my MBA has helped me a lot on this front. I should probably monetize that and offer it more widely. 🙂
Click to expand...

We would LOVE such a talk for our grad students, we are often asked by grad students for such a thing and none of us have a business background or are/have been in private practice. DEFINITELY monetize that talk and advertise your availability to give it!
 
Glad to see there is convo about PP. Another way to potentially adding income is hiring someone part time? If you're providing clinical supervision offer a smaller percentage and increase that when they are licensed.

With that being said, I don't know the PP world, but someone recently asked me about going rates for part-time work these days. He mentioned what was offered was 50/50 split for clinical work, $300 per month for providing an hour of weekly supervision and profit-sharing which was 10-15% of fee's charged by the supervisee. Is that the going rate these days, is he getting gypped, and should he negotiate? This is a w-2 position.
 
VirginiaIsForLovers said:
Glad to see there is convo about PP. Another way to potentially adding income is hiring someone part time? If you're providing clinical supervision offer a smaller percentage and increase that when they are licensed.

With that being said, I don't know the PP world, but someone recently asked me about going rates for part-time work these days. He mentioned what was offered was 50/50 split for clinical work, $300 per month for providing an hour of weekly supervision and profit-sharing which was 10-15% of fee's charged by the supervisee. Is that the going rate these days, is he getting gypped, and should he negotiate? This is a w-2 position.
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50/50 seems like a poor split to me, but I also don't know what this person is receiving in return. The $300/month for an hour of supervision seems more than fair, and 10-15% profit-sharing does offset the split a bit, but with that only being limited to the supervisee, I don't suspect the offset would be substantial. Others may be able to add more insightful responses than my own.
 
AcronymAllergy said:
50/50 seems like a poor split to me, but I also don't know what this person is receiving in return. The $300/month for an hour of supervision seems more than fair, and 10-15% profit-sharing does offset the split a bit, but with that only being limited to the supervisee, I don't suspect the offset would be substantial. Others may be able to add more insightful responses than my own.
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Thanks for the reply. It seems that 50/50 will include office space, billing, being on their website (marketing), registration, general admin things being handled by the practice. They are seeing from 5-10 clients, and for the time being bringing all these clients from their current practice so doesn't need to utilize any of the marketing or referral base of the new practice. Not utilizing any benefits since they will be getting this from their full-time academic position.
 
1) 50/50 is financially exploitative, and unethical.

a. Example: Let's say I have a practice in two offices, one admin space, and one staff member who does my billing. Overhead is about 35%. When I make $100/hr, $35 of that goes to overhead, and $65 goes in my pocket. Let's say I hire another psychologist. Notice where my overhead increased? No? Because it didn't. I don't need a second administrative assistant, rent hasn't gone up, utilities cannot go up (part of rent), and malpractice is a big nothing. So now the practice is making $200/hr, while overhead remains $35/hr. Because I'm scum, I pay this psychologist $50/hr so he/she is paying ALL of the overhead, and I'm making $115/hr,. Previously I was making $65/hr. Does that sound like I've been fair to that person?

2) @VirginiaIsForLovers Tell your friend to run. If they refuse, have them ask to review of the business plan. It would help your friend see the problems of relying upon supervisee revenue, and why a 50/50 split is unethical. But I'm betting this person doesn't have a real business plan, with market projections. Which is weird, because my local pizza place has one.

Some questions they might want to ask: What is the business plan in regards to capturing and maintaining market share? How is market share preserved when you've trained people that will eventually compete with you, assuming your location prevents non-competes? What are the legalities of charging insurance companies for supervisee services? Since the supervisees are definitionally NOT contractors, what are the tax and employment liabilities for whoever if giving supervision? What are the civil liabilities of supervisee actions, for how long, and for whom? What are the legalities of paying someone on productivity for tax purposes? Who audits the books to ensure fair pay? What are the plans in the case of divorce, death, or bankruptcy?
 
PsyDr said:
You don't have to be in PP for most investments, but PP offers access to additional investment tools. Anyone can be thoughtful and purchase things that maintain value.

Example: You have a $500 budget for wall art for your office. Which is smarter? $500 worth of generic wall art that will be worth nothing when you die OR $500 worth of signed Picasso lithographs?
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No disagreement, I simply want others to see it does not have to be that you must pick one path or the other, you can be an employee and have a business/build wealth.
 
taylortaylor164 said:
Hi,
I am looking to start out in private practice and am setting my ideal schedule and fee structure. I am trained in both psychological assessment for ADHD, learning disabilities, and diagnostic evaluations in addition to multiple therapy modalities and would like to provide both of these services. Starting out, I see myself offering 1 assessment per week, around 10 therapy clients per week, and 1 assessment intake and 1 assessment feedback per week. This gives time for writing as well. It looks like a going rate in my area for assessment would be around 2k and hourly therapy as being $150 an hour. Assessment and feedbacks are $200 an hour. I do plan on taking insurance, and I know that changes the numbers since they determine many of the prices. Assuming those numbers, everyone shows, no insurance screwups/changes, and not including practice costs, no benefits, and 48 weeks worked per year, that is $187,200 a year. I know this is an overestimation, especially starting off, but is this possible? Am I completely off base? It seems like salaries I have heard of from PP are lower.
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You seem to be heavily relying on assessments/assessment feedback to make the bulk of this estimated income, as it makes much more minute per minute compared to seeing clients. This is going to be an uphill battle. Insurance won’t pay you anywhere near the rate you’re listing, and they will fight paying you enough that you might give up taking insurance for assessments. Cash pay is also tricky for assessments, because only wealthier folks can pay $2K out of pocket. Hope you have an “in” with assessment folks sending you referrals and schools in your community because school districts will provide assessments for free (via school psychs), so there won’t be a high need in the community for this service, most likely. Just a few folks here and there paying cash.

Starting out, expect it to take awhile to build your client base up for practice, and even longer for your assessment practice. You may bleed income the first 6-12 months, depending on specialty, whether you’re paneled with insurance right away, etc. given business costs initially to get set up.

If you take insurance for individual sessions, you may see your income halved at worst by insurance panels, at best, around 2/3.

All in all, your numbers will come out to be much lower than your idealistic estimate. That isn’t to say you can’t be successful, but you may need to temper your expectations starting out.

Edit: someone I know who sees some clients and does forensic assessments (I think 1 or 2 per week—similar to the schedule you describe) said they make around $100k/year. That is probably a more reasonable ballpark figure taking no shows and business expenses into account.
 
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foreverbull said:
Edit: someone I know who sees some clients and does forensic assessments (I think 1 or 2 per week—similar to the schedule you describe) said they make around $100k/year. That is probably a more reasonable ballpark figure taking no shows and business expenses into account.
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Like forensic assessments for the state, or IMEs?
 
WisNeuro said:
Like forensic assessments for the state, or IMEs?
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Not sure, actually. All I know is, in their assessment work they may get subpoenaed after conducting them, but they said they haven't had to go to court yet. Does that clarify which it might be?
 
foreverbull said:
Not sure, actually. All I know is, in their assessment work they may get subpoenaed after conducting them, but they said they haven't had to go to court yet. Does that clarify which it might be?
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You get called in for deposition in both commonly. I'm wagering it's state forensic stuff, because if it's IMEs, they're doing something wrong if they're only sitting at around 100k for 1-2/week.
 
WisNeuro said:
You get called in for deposition in both commonly. I'm wagering it's state forensic stuff, because if it's IMEs, they're doing something wrong if they're only sitting at around 100k for 1-2/week.
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It's been awhile since I talked to this psychologist, so the details aren't entirely clear--I just recall them saying that they were averaging 1 assessment and a handful of clients every week and a feedback session or two and made that amount, sometimes 2 a week, but I don't think it was the norm?
 
foreverbull said:
It's been awhile since I talked to this psychologist, so the details aren't entirely clear--I just recall them saying that they were averaging 1 assessment and a handful of clients every week and a feedback session or two and made that amount, sometimes 2 a week, but I don't think it was the norm?
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1 assessment, 1 feedback session, and ~5 psychotherapy clients was $100k annually? Whoa
 
Would you consider a 50/50 split ok if I get paid for billed time and not collections?
 
AbnormalPsych said:
What is your hourly rate and how much time do you anticipate billing for each week?
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They pay per work RVU and I anticipate 2 per hour. They will be times when I make 3 but that wash out with meeting, etc. They pay $35 per wRVU. So an intake would be about $105 for 60-90 mins.
 
I ran into someone yesterday talking about how they (LPC pre-full license) are supervised virtually and that their supervisor is feeding them clients at $100 an hour. The supervisor then takes 40% and then charges for supervision sessions. The supervisor doesn't cover any costs associated with renting space. They treat them as a W2 (which 'saves' employee from paying the employer tax) but the provider was saying "thats basically 20% [hint, it isn't], and I'm not going to argue over just another 20%" That is 20 dollars an hour which can translate to 30-40k a year.
 
Justanothergrad said:
I ran into someone yesterday talking about how they (LPC pre-full license) are supervised virtually and that their supervisor is feeding them clients at $100 an hour. The supervisor then takes 40% and then charges for supervision sessions. The supervisor doesn't cover any costs associated with renting space. They treat them as a W2 (which 'saves' employee from paying the employer tax) but the provider was saying "thats basically 20% [hint, it isn't], and I'm not going to argue over just another 20%" That is 20 dollars an hour which can translate to 30-40k a year.
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I honestly have found most PP psychotherapy "jobs" to be a ripoff meant for early career folks. If you want to do PP, be prepared to go at it yourself.
 
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Sanman said:
I honestly have found most PP psychotherapy "jobs" to be a RIP off meant for early career folks. If you want to do PP, be prepared to go at it yourself.
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I’ve seen similar “opportunities” in group practices and via telehealth corporations that really do seem like a raw deal. I know someone who ended up in a situation in which they were in a “group practice” that didn’t provide an office—just billing and helped the person get paneled on insurance then they skimmed a fair amount off the top which ended up being exploitative for an ECP (imagine a Corp taking a percentage of $80-$95/hr for insurance clients when your full fee would be $150 and you can start to see how little this psychologist probably made after business expenses). This person had a full caseload but wasn’t making much because they only had a few cash-paying clients and mostly insurance referred clients, so they finally left and just practiced on their own.

The tough part is that most ECPs don’t know enough to avoid exploitative setups because they haven’t had the chance to own their own practice yet to understand the total business costs of independent private practice vs. joining a group practice. You have to have experience in the former to be able to accurately calculate income of both to compare—or know someone who does who can share that specific financial information for reference.
 
foreverbull said:
The tough part is that most ECPs don’t know enough to avoid exploitative setups .....
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IMO, the tough part is our field tolerates this disgusting behavior. Anyone offering this should be thrown to whatever is left of the APA's ethics committee.

I've recently seen a contract that a well known psychologist offered to an ECP. This contract had such gems as:

1) 50/50 split
2) "1099" status, but it did not meet any of those legal requirements. aka, fraud.
3) a non-compete whose reach would allow the ECP to exclusively practice in HI, AK, NH, ME, VT, and NH. Maybe PR and USVI.

I don't know how anyone would respect someone who would do that to a vulnerable person.
 
From someone who’s been in full-time private practice for 12 years, there is absolutely good money to be made in PP - even with insurance.

Every decent therapist I know in my area is busier now then they’ve ever been and I have never experienced a time when so many therapists are full and not taking new patients. The psychologists I know are all extremely busy and more and more psychologists in my area are not taking insurance or take limited insurance.

I have never taken insurance since I started PP and I now see approximately 60 patients /week in a mix of 30 and 60-minute appointments. I am so busy I literally have no open appointments for 7 weeks and my new patient appointments are 3 months out. I refer out about 1-5 new patient inquiries daily to other psychologists.

Yes, I know I prescribe and this has made my services more in demand by volume, but there are 3 other psychologists in my suite and all of them have full schedules: 35 - 43 patients/week. Two of them are self-pay only and the other is on 1 insurance panel. I have received several inquiries over the past two years from psychologists and other therapists interested in transitioning to self-pay practices and I now know upwards of 20 psychologists in my metro area who are self-pay only and I’m certain the total number is significantly higher. My metro area is medium COL and middle/upper-middle class income, btw.

For those not wanting or willing to do self-pay, insurance-based practices are booming. Every private practitioner I know who takes insurance is busy and many are not accepting new patients. Insurance does pay less (significantly less sometimes), but the volume is high and most practitioners have to do little to no marketing/advertising - just being on the panels gets them busy nowadays.

I agree a 50/50 split is ludicrous. Better to just go it alone by getting on insurance panels to begin generating business than agree to a disadvantaged or even exploitative practice arrangement.
 
medium rare said:
From someone who’s been in full-time private practice for 12 years, there is absolutely good money to be made in PP - even with insurance.

Every decent therapist I know in my area is busier now then they’ve ever been and I have never experienced a time when so many therapists are full and not taking new patients. The psychologists I know are all extremely busy and more and more psychologists in my area are not taking insurance or take limited insurance.

I have never taken insurance since I started PP and I now see approximately 60 patients /week in a mix of 30 and 60-minute appointments. I am so busy I literally have no open appointments for 7 weeks and my new patient appointments are 3 months out. I refer out about 1-5 new patient inquiries daily to other psychologists.

Yes, I know I prescribe and this has made my services more in demand by volume, but there are 3 other psychologists in my suite and all of them have full schedules: 35 - 43 patients/week. Two of them are self-pay only and the other is on 1 insurance panel. I have received several inquiries over the past two years from psychologists and other therapists interested in transitioning to self-pay practices and I now know upwards of 20 psychologists in my metro area who are self-pay only and I’m certain the total number is significantly higher. My metro area is medium COL and middle/upper-middle class income, btw.

For those not wanting or willing to do self-pay, insurance-based practices are booming. Every private practitioner I know who takes insurance is busy and many are not accepting new patients. Insurance does pay less (significantly less sometimes), but the volume is high and most practitioners have to do little to no marketing/advertising - just being on the panels gets them busy nowadays.

I agree a 50/50 split is ludicrous. Better to just go it alone by getting on insurance panels to begin generating business than agree to a disadvantaged or even exploitative practice arrangement.
Click to expand...

I have a pretty good guess, but what kind of cases are you/the psychologists seeing primarily? What kinds of dx? Feel free to PM if thats too much info for the public board.
 
medium rare said:
From someone who’s been in full-time private practice for 12 years, there is absolutely good money to be made in PP - even with insurance.

Every decent therapist I know in my area is busier now then they’ve ever been and I have never experienced a time when so many therapists are full and not taking new patients. The psychologists I know are all extremely busy and more and more psychologists in my area are not taking insurance or take limited insurance.

I have never taken insurance since I started PP and I now see approximately 60 patients /week in a mix of 30 and 60-minute appointments. I am so busy I literally have no open appointments for 7 weeks and my new patient appointments are 3 months out. I refer out about 1-5 new patient inquiries daily to other psychologists.

Yes, I know I prescribe and this has made my services more in demand by volume, but there are 3 other psychologists in my suite and all of them have full schedules: 35 - 43 patients/week. Two of them are self-pay only and the other is on 1 insurance panel. I have received several inquiries over the past two years from psychologists and other therapists interested in transitioning to self-pay practices and I now know upwards of 20 psychologists in my metro area who are self-pay only and I’m certain the total number is significantly higher. My metro area is medium COL and middle/upper-middle class income, btw.

For those not wanting or willing to do self-pay, insurance-based practices are booming. Every private practitioner I know who takes insurance is busy and many are not accepting new patients. Insurance does pay less (significantly less sometimes), but the volume is high and most practitioners have to do little to no marketing/advertising - just being on the panels gets them busy nowadays.

I agree a 50/50 split is ludicrous. Better to just go it alone by getting on insurance panels to begin generating business than agree to a disadvantaged or even exploitative practice arrangement.
Click to expand...

Do you employ any admin support? My practice is very similar and handling those volumes solo can be tiring.
 
AbnormalPsych said:
I have a pretty good guess, but what kind of cases are you/the psychologists seeing primarily? What kinds of dx? Feel free to PM if thats too much info for the public board.
Click to expand...
I see a broad mix of dx with children, adolescents and adults: ADHD & LD, OCD and trichotillomania, bipolar, depression, DMDD, GAD and Panic Disorder, phobias, ASD, psychosis (mostly substance induced), substance abuse, medication management for eating disorders, LGBTQIA+ issues, some pre-surgery evaluations, some schizoaffective, a few schizophrenic. I don’t see couples and I am too busy to do any testing so I refer that out. I don’t do anything forensic either.

None of the psychologists in my suite do testing. One is more of a generalist with quite a bit of garden variety dx’s and some focus on couples and personality disorders, another specializes in adolescents, young adults and families, and the other has a focus on couples therapy and eating disorders as well as some primarily mood and anxiety patients.
 
RomanticScience said:
Do you employ any admin support? My practice is very similar and handling those volumes solo can be tiring.
Click to expand...
Yes, we have a full-time office manager between the 4 of us. We pay her well and she does everything: phones, screening new patients, scheduling, billing, collecting and bookkeeping, PAs for myself, managing office supplies, paying bills, etc. I could not work without administrative support and find it’s well worth the money. I routinely have between 10-30 voicemail messages/day and it would take me 1-2 hours at the end of the day just to check messages and return calls let alone everything else that needs to be done.
 
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TY for these replies. It would seem that insurance is a major hinderance, which is not all that surprising but is nonetheless frustrating.
 
mdwpsyd said:
My rule of thumb is to multiply annual salary by 225% and more like 250% if you want to compare to a federal job (or similar job with great benefits and job security).

For example, current annual salary for a GS-13, Step 1 VA psychologist in the "Rest of the United States", i.e., no locality pay boost beyond the standard 15.95%, is $92,143. (You can usually reach that level once you get licensed.) Therefore, if you wanted to do full-time private practice and earn a similar amount, you would need to generate a gross income of $230,358 (92143•2.5).

Also, plan on earning that gross income working 46 weeks a year if you want to stay equivalent to a good salaried position. If you can do 30 billable hours per week, which means about 50 total work hours per week if you're above average efficient (60 work hours a week for typical efficiency), you'll need to collect $167/hour on average. If you average $125/hour, then you'll need to collect on 40 billable hours (67 to 80 total work hours per week). Finally, note that I used the verb, "collect", i.e., you can't just bill $5000/week, you need to collect (actually get paid) $5000/week.

Why so much more? See the posts above for good explanations. It's common to underestimate the value of paid leave (sick/medical & vacation), good health insurance (including dental & vision), not having to pay self-employment tax, and the amount of time, energy, and cash you need to invest in marketing, administration, etc.

For those of you who have been in private practice, do those numbers seem about right?
Click to expand...
Could you elaborate on where those numbers are coming from? How are you quantifying those benefit amounts?
 
taylortaylor164 said:
Could you elaborate on where those numbers are coming from? How are you quantifying those benefit amounts?
Click to expand...

Here is an estimate from the VA detailing the value of benefits.


They put the benefits at about 150% of the stated salary. I'd guess the remaining difference from the estimate @mdwpsyd provided is due to overhead (office space, marketing, advertising, billing time, etc.).
 
beginner2011 said:
Here is an estimate from the VA detailing the value of benefits.


They put the benefits at about 150% of the stated salary. I'd guess the remaining difference from the estimate @mdwpsyd provided is due to overhead (office space, marketing, advertising, billing time, etc.).
Click to expand...
Don't forget self-employment taxes. The comparison was to gross profits not net revenue.
 
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