F0nzie's Cash Private Practice - The Updates

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F0nzie

F0nzie

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I am starting this thread because every so often a medical student or a resident will ask "how realistic is it to start a cash practice?". Throughout residency almost every colleague resident I have known has been talking it up like it's the best thing since sliced bread but very few truly know what it's about or actually follow through with it. I hear lots of scheming but NO ACTION. I do not have the answer to this thread... yet. But I am determined. My current answer is maybe, but I don't have a freaking clue. I will do my best to stay objective, not exaggerate, and post both the good and the bad as it comes my way.

SO LET'S DO THIS!!! I just graduated residency last month. I have been interested in private practice ever since I was an intern. I had dreams of autonomy, freedom from insurance companies, and delivering the best possible care to my patients.

I started by learning some fundamentals in marketing by doing a lot of research online. I also learned some basic html and web development concepts. These tools which everyone has available to them is as easy as going online and doing a search and taking the time to learn. With this information I was able to schedule a handful of patients 1 month before residency ended in a completely different city with zero contacts.

Now I have been in business for 19 days. I just caught up on all of my accounting tonight. Tracking my income and expenses: 2k income and 8k in expenses. I spent several thousand in office furniture. I have already paid for 1 year in rent, internet, fax, malpractice, etc. I'll be happy to break even during the first year just to get a feel for this practice model.

The patients so far have been quite respectful and courteous. A few seem a bit needy, but that's where having extra time available to address those concerns is very helpful. I am very satisfied with the patient interactions so far. The patients seem to be getting what they want out of treatment.

I will admit, the networking has been quite stressful, along with everything else-- particularly setting up the office and troubleshooting the printer and the EMR. Competing for such a small market share has been scary. Most of my cases sent my way have been complex med management and NO THERAPY :(. The competition seems fierce with psychiatrists and therapists already established in the cash market and in their own circles trying to fend off insurance based practices and large healthcare organizations. I feel like a small fish swimming in a sea of sharks! :eek:

More to come...
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Web development is one aspect of marketing that I still do not entirely understand or how it can be helpful for a psychiatric practice. We'll see what happens.
 
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Thanks for this, I look forward to reading about your venture.
 
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I am not recommending that anybody go directly into a cash practice after residency without any supplemental income sources unless you are born into wealth. As you can see, the income I have made so far after considering taxes and benefits is less than a residency check. I've known several med students that had their parents buy them a house or a condo for med school-- if this is you, maybe.

However you decide to start up your pp whether building your reputation from the ground up, getting yourself established in the community through an employed position, or getting on insurance panels, the latter 2 being the more accepted ways, it's probably a good idea to have another job on the side.

The problem with working 2 jobs lies in the organizations that have non-compete clauses (basically a contract that restricts you from working for yourself or others). Many cmhcs do not have this clause. Jails give you a break as well (but then you can't answer your cell phone if a pp patient calls). So you can work part-time in cmhc or jail and part-time cash pp. Unfortunately, you may miss the opportunity to provide services to middle class Americans in an employed setting due to the clauses out there.
 
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Thanks for opening up and sharing your experiences along the way. For whatever reason I'd always thought you were in the northeast somewhere.
 
Have you seen much of a difference between the adult vs peds side of things in terms of growth rate of the practice?
 
Frazier said:
Nice. I like the website. :thumbup:
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Thanks! I had 3 prototype websites during residency that I played around with to learn the ins and outs of webdesign. Web development is rapidly changing with all the different platforms out on the market. It can be daunting but it gets easier with tim. If you're into computers and stuff it can actually be pretty fun. :) Here's a neat tutorial site to teach you how to write your own code if you're interested in getting started http://www.codecademy.com/.
 
digitlnoize said:
Have you seen much of a difference between the adult vs peds side of things in terms of growth rate of the practice?
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If you look at the national statistics, child psychiatrists are dramatically lower in supply compared to adult psychiatrists (sorry I don't have any statistics right now). Our networking and marketing campaigns have been primarily geared toward child & adolescent psychiatry as you can see by the young girl with the balloons on the front page of our website. So it's a bit perplexing to me that we have received 20-30 referrals with adults to children representing a 3:1 ratio. I have a feeling that this is going to shift as we become established.

We've been told by several other professionals that our business model would fail. 1 person said there is 1 child psychiatrist in the area that sees "all of the cash child patients". I know that cannot possibly be true but it is a bit intimidating. We are currently working with several families who are seeing their children get better. Hopefully good clinical outcomes and patient/family satisfaction will help us to get word of mouth going in our community.
 
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Really cool stuff, thanks for sharing! I (and I expect many others) look forward to following along and hearing what works and what doesn't entering into the private practice world.
 
By the way Digital, although we have not received as many referrals for child evaluations, parents whom we have spoken to over the phone in our screenings have been more willing to file an out-of-network claim with their insurance carriers. The adults who need evals for themselves have been much more hesitant.

It's a good idea to have some colleagues in larger practices that accept insurance to refer these patients and families to so they do not feel defeated in their search and can weigh their options. I have actually gotten referrals back from them! :)
 
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A MD and a DO working together both professionally and personally? That's so refreshing given the recent break down of talks between the AOA and ACGME over the merger.

I'll be following this thread with bated breath. I too have dreams of doing this down the road but am too scared of the financial uncertainty.
 
OldPsychDoc said:
We're more alike than we are different.
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Tell that to the guys in charge. I think most of the residents and students now would like the merger to happen but the old guard want to maintain their power/soviegnity.
 
How many hours of work are you two getting right now?
 
The website looks really professional - nicely done. Looking forward to seeing how it goes and definitely wish you the best of luck!
 
Congrats on the practice. I'm finally devoting actual time to growing mine. Been on the backburner for a while. A key is getting good referral sources, I've found (PCP's, other therapists, even other psychiatrists).
 
BS81 said:
How many hours of work are you two getting right now?
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1-2 hours per week each. I am considering reducing the rates of our 1 hour psychotherapy sessions so that we do not have such a high turn over associated with med management. The going rate for psychologists in this area is $150/hour so I am thinking maybe right around $200. For now, I have been referring out all my patients to therapists that have expressed interest in collaborating with us.
 
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nitemagi said:
Congrats on the practice. I'm finally devoting actual time to growing mine. Been on the backburner for a while. A key is getting good referral sources, I've found (PCP's, other therapists, even other psychiatrists).
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Definitely agree with this. One thing I have learned is that PCPs that own their own business are much more willing to collaborate. Don't waste your breath trying to develop a relationship with a PCP in a large healthcare organization. Out here we have the mighty Mayo Clinic that employs almost all of the internists and PCPs and develops their own referrals for the greatest market share-- they will eat practices like ours for breakfast.
 
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Earlier this month after hours...

lphq.jpg


200 sqft office with an internet connection
 
Best of luck to both you on your practice!

I see that you offer Suboxone which I have really mixed feelings about, from the perspective of a cash only enterprise. I only know of one doc in Philly that runs that particular scenario, and it seems fraught with problems. He is a slime ball and a miserable excuse for a physician so my view is flawed, but here's what I see: patients often cant afford the monthly $200 fee so they miss a month, and without a consistent protocol the doc ends up as a drug dealer. Rather than using him as a way to get off opiates they go to him to make their habit more affordable, ie to decrease their tolerance. I'm curious what you and others think, and of course I do not mean to offend you. You seem like a stand up doc, I am just uneducated on your model
 
What has been your experience with taking credit cards? I recently terminated my credit card service due to high fees (which were approximately equal to the 2-3 payments I received each month through credit card payments). My practice model is a lot different from yours (and other psychiatrists), so credit card payments may be working out better for you.
 
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JamesPhilly said:
Best of luck to both you on your practice!

I see that you offer Suboxone which I have really mixed feelings about, from the perspective of a cash only enterprise. I only know of one doc in Philly that runs that particular scenario, and it seems fraught with problems. He is a slime ball and a miserable excuse for a physician so my view is flawed, but here's what I see: patients often cant afford the monthly $200 fee so they miss a month, and without a consistent protocol the doc ends up as a drug dealer. Rather than using him as a way to get off opiates they go to him to make their habit more affordable, ie to decrease their tolerance. I'm curious what you and others think, and of course I do not mean to offend you. You seem like a stand up doc, I am just uneducated on your model
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Though this particular doctor may be a slimeball, and his patients may indeed be using his services for some non-therapeutic purpose, they are not "decreasing their tolerance" by taking Suboxone, is this medication binds rather strongly to the mu opioid receptor. What they may be doing is selling Suboxone on the street, which mostly is being used by other addicts, not to get high, but to treat their withdrawal when they want to reduce their use without seeing some "slimeball" doctor and paying his fees when they know very well what they need and where they can get it. There is very little actual harm caused by Suboxone diversion, since nobody is stupid enough to use it to try to get high (there are cheaper ways to do that). Mostly, it is harm reduction, which some doctors and trainees find morally ambiguous and therefore uncomfortable.
 
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strangeglove said:
...Mostly, it is harm reduction, which some doctors and trainees find morally ambiguous and therefore uncomfortable.
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Good explanation. I would also add I have heard of people using suboxone themselves, for example, through the workweek to hold off withdrawals and then injecting heroin on the weekend or things like that. Again, would probably fall into morally grey harm reduction (but would break the treatment contract for sure).
 
michaelrack said:
What has been your experience with taking credit cards? I recently terminated my credit card service due to high fees (which were approximately equal to the 2-3 payments I received each month through credit card payments). My practice model is a lot different from yours (and other psychiatrists), so credit card payments may be working out better for you.
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I go through papal virtual terminal which charges a $30/month fee and 3.1% +$0.30 per transaction. The fees are high and they will definitely add up. This is my first go at this so it's still experimental. We do not have front staff that do billing so we did not want the hassle of dealing with payment issues ie. counting cash, patient forgets to bring cash, remembering who paid what, keeping money in the desk drawers, getting bounced checks, driving the checks to the bank. We also keep credit card information on file for missed appointments. Basically our policy is credit cards only (kind of like reserving a flight or a hotel) and getting them comfortable with this method of payment from the get go. It makes follow up appointments a lot smoother because I can process the payment on the day of the appointment and quickly print out a superbill before the session ends.

Nitemagi, Strangelove how do you guys do your billing?
 
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Dr Strangelove (great movie btw), thanks for your reply

There are 2 things that I'd like to say. Your comment that "Suboxone diversion isn't harmful" I believe is wrong. It's not enough to prescribe a drug with the hope that's its not going to cause harm. There are many safe drugs we could give pts that would give them absolutely no benefits, and charge them $200 a pop for the privilege. But thats not how medicine should work. This anomalous 'slimeball' dr I speak of knows that this a la carte Suboxone 'therapy' isn't going to work, that he enables these opiate abusers in some shape or form for the ultimate goal of profiting from other peoples' miserere. By claiming to treat a disease but having no intention of doing so he earns the title dr slimeball, md

And I have heard from pts who have gone through 2-3 weeks of Suboxone treatment that they regress to a more opiate naive state, and hence end up spending less on heroin or whatnot. But again, it's beside the point what the pts do with it, the point is its being used illicitly and that allowing a month on/month off will not benefit the pt
 
F0nzie said:
I go through papal virtual terminal which charges a $30/month fee and 3.1% +$0.30 per transaction. The fees are high and they will definitely add up. This is my first go at this so it's still experimental. We do not have front staff that do billing so we did not want the hassle of dealing with payment issues ie. counting cash, patient forgets to bring cash, remembering who paid what, keeping money in the desk drawers, getting bounced checks, driving the checks to the bank. We also keep credit card information on file for missed appointments. Basically our policy is credit cards only (kind of like reserving a flight or a hotel) and getting them comfortable with this method of payment from the get go. It makes follow up appointments a lot smoother because I can process the payment on the day of the appointment and quickly print out a superbill before the session ends.

Nitemagi, Strangelove how do you guys do your billing?
Click to expand...

I use Square for credit card billing. No monthly fee, and I believe you pay 2.79% on each transaction. Slightly higher fee when you have to type the card number instead of swiping. Patient has to sign each transaction, so it doesn't work for "automatic" charging, or as a way to keep a card "on file" in case of non-payment fees (which may help you get money from the occasional problem patient who tries to stiff you, but is problematic for therapeutic alliance with everyone else, IMO). It is convenient for patients to accept credit cards, but I would also make sure that patients are not going into debt to pay your fees, as many if our patients struggle with doing things like this in their lives and we do not want to be part of the problem. If someone can't afford your fee, you should not be treating them. By the way, I ask every patient during the evaluation how much money they make, what they pay in rent/mortgage and how much debt they have. I do this because finances are an important part of psychosocial functioning, but also to know how much treatment may be a burden on them (assuming significant out of pocket costs).
 
Square is a pretty neat payment system. Impressive all you need is a phone or an ipad to process the transaction. I agree with you-- when it comes to billing we really need to consider how it affects the therapeutic alliance. Alliance is key. The research couldn't be any clearer.
 
Also, Fonzie, I wonder why you are so rigid about credit card only. While I agree that this may save some time, I would also wonder if you are deferring some negative countertransference around money and collecting of fees as a "dirty" thing that stirs up uncomfortable emotions related to power, control and need. Some people deal with this using monthly statements and checks sent by mail. I just collect at the end of every session and it takes 30 seconds and is no big deal. Also, patients appreciate flexibility and your attempts to "simplify" and potentially minimize thoughts and feelings related to money using stored credit cards may actually make your patients more aware of money issues, ie Why does this doctor have such a thing with how I pay? Just some food for thought.
 
strangeglove said:
Mostly, it is harm reduction, which some doctors and trainees find morally ambiguous and therefore uncomfortable.
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Bartelby said:
Again, would probably fall into morally grey harm reduction
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I'm not sure where folks are forming the idea that harm reduction is "morally ambiguous" or a "morally grey" area (the uncomfortable part, I get).

Harm reduction is just that. Harm reduction. There's nothing morally questionable or ethically grey about helping a patient reduce use of a toxic substance. It's not the ideal, but if a patient is not going to abstain, reducing use beats not reducing use. I think the discomfort with harm reduction comes from medical training, which focuses on the ideal solution, sometimes at the expense of the potentially attainable.
 
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notdeadyet said:
I'm not sure where folks are forming the idea that harm reduction is "morally ambiguous" or a "morally grey" area (the uncomfortable part, I get).

Harm reduction is just that. Harm reduction. There's nothing morally questionable or ethically grey about helping a patient reduce use of a toxic substance. It's not the ideal, but if a patient is not going to abstain, reducing use beats not reducing use. I think the discomfort with harm reduction comes from medical training, which focuses on the ideal solution, sometimes at the expense of the potentially attainable.
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Agree completely. That was my point.
 
notdeadyet said:
Ah, thanks. I just don't understand where they get "morally ambiguous" from.
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It is derived from implicit moral notions that a) all non-analgesic opioid use is inherently anti-social and b) a doctor's job is to help individuals conform to social norms, and not to help deviate from them, combined with c) the scientific fact that addicts generally do better on Suboxone. Add it all up and you get moral ambiguity.
 
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Has it been easier for your wife to recruit private pay patients as a child psychiatrist or has she been encountering the same fierce competition that you have?
 
Wow, great work! Especially since this is an idea I've thought about doing sometime in the future though is that future months or years down the road....I don't know.
 
Congrats on starting your practice. I'll be starting M1 soon and I have always been interested in psych and neuro. I've thought about a combined residency but after reading these forums have learned that they are becoming ancient and less attractive. I'm also interested in research in both fields, so I will see down the road if I change my mind about psych/neuro. I like the design of your website. As another SDNer mentioned, why are you so strict on the payment method? Is this something you may change in the future when you get more settled in? Like mentioned, you don't want to contribute to financial issues and cause more psychosocial issues.
 
Great thread, thanks for sharing this with us!

Fonzie, can you elaborate more on your statements regarding the market:

"Competing for such a small market share has been scary...The competition seems fierce with psychiatrists and therapists already established in the cash market and in their own circles trying to fend off insurance based practices and large healthcare organizations. I feel like a small fish swimming in a sea of sharks!"

This is the part about doing psychiatry that makes me nervous. I'd feel more flexible with FM/Psych. I hear on the one hand that psychiatrists are in short supply, especially good ones. I am also told that jobs are plentiful. Still, as you seem to say, there seems to be a limited market after all. Even in the rural area, where I'd like to practice, for example, I discovered there was a monopoly of sorts going on which led a few newer Drs. to leave town.

I'd like to think that if you are that rare good psychiatrist in town, they will come.

Lots of good luck to you both!
 
About half of my patients choose to pay by CC. Checks are nice for others. I've only had 1 person pay by cash, ever.

I looked into square, but heard some annoying reports such as that they hold your payment for x number of days, and until it reaches a certain amount. My monthly fee is minimal through my bank.
 
DandelionMed said:
Has it been easier for your wife to recruit private pay patients as a child psychiatrist or has she been encountering the same fierce competition that you have?
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I don't have enough numbers to work with to get a good feel for which is more competitive. As I mentioned earlier we've received 3 adult inquiries for every 1 child. We are trying to shift it by networking with more pediatricians and therapists that specifically offer child therapy. Maybe in a year I can give you a better answer.

Many insurance providers will pay up to 80% of our fees. Parents are more willing to file the out-of-network claim which is a significant factor.
 
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aspiringdoc09 said:
As another SDNer mentioned, why are you so strict on the payment method?
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Good question!

To be completely honest. I hardly know what I am doing. I have never been in business in my entire life which makes it kinda scary. There have been several people who wanted to pay by check and we were OK with it. If somebody offered to pay in cash I would probably be OK with it too (although I might feel weird getting handed a wad of cash). I am strongly considering changing my policy to "cash, check, or CC" based on the responses I have received so far.
 
BlueLotus said:
Great thread, thanks for sharing this with us!

Fonzie, can you elaborate more on your statements regarding the market:

"Competing for such a small market share has been scary...The competition seems fierce with psychiatrists and therapists already established in the cash market and in their own circles trying to fend off insurance based practices and large healthcare organizations. I feel like a small fish swimming in a sea of sharks!"
Click to expand...

This is probably my fear of failure coming out here. Honestly I feel very fortunate to have my own patients. You have no idea how ecstatic we were when we got our first patient! Hard to put into words but it feels very special.

It is a trend in medicine for "big insurance", "big hospital" to gobble up everything in their path. A lot of hospitals are buying out private practices and the pp physician is on the decline. Which is why smaller practices need to stick together to survive and it may be harder to break into these circles when you're the new guy in town.
 
F0nzie said:
Here is the website I designed and launched 6 months before residency ended. My wife basically told me how she wanted the site to look and I did the technical work. I have since made a few modifications and we try to keep the blog updated: www.drshier.com.

Web development is one aspect of marketing that I still do not entirely understand or how it can be helpful for a psychiatric practice. We'll see what happens.
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My initial thoughts here after perusing the website are that Anna is the prettier of the two available doctors.....

Good Luck!! :)
 
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