Hospital supporting a private practice?

[finalpsychyear]

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The hospital system only has 1 outpatient child psych who works part time and does not accept any new patients.

They are willing to rent space out to me in the facility where the psych doctor already is. There is no employment through them in any way. They said they could help me with marketing if i wanted but i would have to apply for staff privileges.

This seems like all the benefits of a private practice PLUS a hospital willing to support you with patients. Any thoughts or could i be missing something major here that could hurt me?

 

[dl2dp2]

You are not thinking about this correctly. Legal arrangements are shells for underlying financial structure. If they are paying you a straight salary, it's more like being employed. If you get paid on performance only, it's like running a practice. Then it's everything in between. Whether you are officially an employee or having "privilege" at the hospital doesn't matter. Everything else depends on your level of outsourcing--e.g. if you are willing to pay, someone can deal with everything necessary to start a practice (real estate, marketing etc), but it'll invariably be more expensive than if you do it yourself--unless you are confident in being able to rework these hours clinically generating even higher revenue. In general, people aren't out there to "hurt" you, but it's important to see incentives clearly: the hospital always wants to maximize their revenue. It's indifferent to maximizing your income except to the extent that if you are paid too little it increases turnover, which actually paradoxically increases their cost and decreases their profit.

This is why I think every psychiatrist should try at least run a very small private practice. Once you've done that the business aspect of these things become much more transparent.

 

[finalpsychyear]

You are not thinking about this correctly. Legal arrangements are shells for underlying financial structure. If they are paying you a straight salary, it's more like being employed. If you get paid on performance only, it's like running a practice. Then it's everything in between. Whether you are officially an employee or having "privilege" at the hospital doesn't matter. Everything else depends on your level of outsourcing--e.g. if you are willing to pay, someone can deal with everything necessary to start a practice (real estate, marketing etc), but it'll invariably be more expensive than if you do it yourself--unless you are confident in being able to rework these hours clinically generating even higher revenue. In general, people aren't out there to "hurt" you, but it's important to see incentives clearly: the hospital always wants to maximize their revenue. It's indifferent to maximizing your income except to the extent that if you are paid too little it increases turnover, which actually paradoxically increases their cost and decreases their profit.

This is why I think every psychiatrist should try at least run a very small private practice. Once you've done that the business aspect of these things become much more transparent.

Thanks. I have been told it will be 500/month for 1 day a week for rent with utilities. I would do all my own billing. Of course i will have to hire my own part time support staff ($10/hr 15-20 hr/wk) It sounds very minimum expense wise (1500/mo with the staff included). The waiting lists are over 6 mo in this area for insurance psych. I already have experience running a 1 day/wk practice which i am doing currently but this area with the hospital is where i am living now and don't want to keep driving 90 min each way 1x a week to the old practice.

I guess ultimately I was asking if there was an advantage to rent space through a hospital which already needs more psych then to just set up shop down the street. Logic says practice would fill quicker renting from hospital. Not being employed is big as there is no compete issues.

 

[dl2dp2]

Thanks. I have been told it will be 500/month for 1 day a week for rent with utilities. I would do all my own billing. Of course i will have to hire my own part time support staff ($10/hr 15-20 hr/wk) It sounds very minimum expense wise (1500/mo with the staff included). The waiting lists are over 6 mo in this area for insurance psych. I already have experience running a 1 day/wk practice which i am doing currently but this area with the hospital is where i am living now and don't want to keep driving 90 min each way 1x a week to the old practice.

I guess ultimately I was asking if there was an advantage to rent space through a hospital which already needs more psych then to just set up shop down the street. Logic says practice would fill quicker renting from hospital. Not being employed is big as there is no compete issues.

Nothing trips my radar other than the rent for 1 day a week sounds kinda high, but again if you are not signing a contract it really doesn't hurt to test out the waters. It's not possible to accurately estimate if something's solvent without just doing it. It's good to take risks and play.

 

[FlowRate]

Will you be able to charge hospital-level facilities fee or is this cash only? (I'm kinda assuming no, as he's not the hospital itself) Using conservativeish assumptions, if you're seeing 8hrs/day x 4days = 32hrs x $200/hr = ~$6,400 worth of patients a month that equates to 8% facilities overhead and 24% staff overhead for total costs of 32%. Seems a little high but I used a relatively low /hr figure for a cash practice (in my part of the contry, no clue about the rate elsewhere.)

 

[finalpsychyear]

Nothing trips my radar other than the rent for 1 day a week sounds kinda high, but again if you are not signing a contract it really doesn't hurt to test out the waters. It's not possible to accurately estimate if something's solvent without just doing it. It's good to take risks and play.

A rental contract will be signed but no employment contract. It has penalty free opt out at anytime which is usually not the case in most rental agreements but i know very little that is why my sense is everything is being done in good faith. Your right about taking risks but this is very low risk imo.

 

[finalpsychyear]

Will you be able to charge hospital-level facilities fee or is this cash only? (I'm kinda assuming no, as he's not the hospital itself) Using conservativeish assumptions, if you're seeing 8hrs/day x 4days = 32hrs x $200/hr = ~$6,400 worth of patients a month that equates to 8% facilities overhead and 24% staff overhead for total costs of 32%. Seems a little high but I used a relatively low /hr figure for a cash practice (in my part of the contry, no clue about the rate elsewhere.)

Just solo PP insurance rates. In my area 99213 is 70 for medicare and private insurance is like 60-65. I will be starting just 1 day a week but more can be added later on. I figure it will take a few months to get going so there will be no income. I am looking at it like planting a seed as this place is 20 min from where i live compared to 90 min from where my office is now 1x a week since i moved a few months ago. I won't be stopping my 90 min office till this office is a winner.

Also, i won't be paying staff 40 hours a week more like 20 hours max (10-15 to start) for 1 day of actual office. So I am getting 8% facilities plus 12.5% (20 hr staff/wk) roughly 20% overhead??

 

[clausewitz2]

Will you be able to charge hospital-level facilities fee or is this cash only? (I'm kinda assuming no, as he's not the hospital itself) Using conservativeish assumptions, if you're seeing 8hrs/day x 4days = 32hrs x $200/hr = ~$6,400 worth of patients a month that equates to 8% facilities overhead and 24% staff overhead for total costs of 32%. Seems a little high but I used a relatively low /hr figure for a cash practice (in my part of the contry, no clue about the rate elsewhere.)

In the interest of promoting greater transparency around rates and pricing, $250 an hour for follow-ups seems to be a pretty standard cash rate in this area. There are a couple of exceptions and there is someone who is charging 1,000 per month for TMS "memberships" which is....yeah. Needless to say the later memberships also involve weekly intranasal ketamine (there are some very permissive compounding pharmacies around here), because of course it does..

 

[whopper]

Sluox said it very succinctly.

And yes the $500 for 1 day a week is very high. I pay $1200 a month for rent and in a posh, rich, and high-end area in St. Louis.

 

[Sushirolls]

$500/month is not high. Look around some areas for 'Executive suites.' These are specifically small single offices in range of 200-700sq/ft that typically have shared common area, meeting rooms, etc. These typically go for like $40-80 sq/ft. Its still cheaper than a full size office, but unless you sublet from someone you will have a harder time getting that competitive square footage rate for a tiny office space.

 

[clausewitz2]

How exactly do we propose to determine if the rent is out of whack with market rates without having any idea where OP is?

 

[whopper]

Yep, good point. If the guy's in the middle of Manhattan then that price ain't bad.

 

[finalpsychyear]

Yep, good point. If the guy's in the middle of Manhattan then that price ain't bad.

In the midwest outside of a major top 12 city by 30 min. Looking around full time rent is going for $1sq/foot so i could in reality get my own 1200 sq. foot office for about a 1100-1200/mo full time which is great but utilities, internet,phone is all separate and add up.

The 500 is for 2 days as i received clarification and 1 day/wk is going to run me about 300 when phone, internet, and utilities are included in the price which is darn good right? Plus, the "hospital" exposure with being on staff should lead to more referrals then if i just popped a shingle down the block i would think. Also, a few pcps docs in the building as well i was told.

 

[finalpsychyear]

$500/month is not high. Look around some areas for 'Executive suites.' These are specifically small single offices in range of 200-700sq/ft that typically have shared common area, meeting rooms, etc. These typically go for like $40-80 sq/ft. Its still cheaper than a full size office, but unless you sublet from someone you will have a harder time getting that competitive square footage rate for a tiny office space.

If i ever choose to relocate in the surrounding area and you are just renting space from the hospital the patients should be able to come along without any issue? My understanding is things get much more complex when your an employee in regards to any type of hospital practice which the hospital owns usually in that case?

 

[splik]

This is the old fashioned model and is works out very well for physicians. Many people forget (or are too young to remember) that before the mid-late 1990s most physicians had a relationship with hospitals like this. Hospital employment of physicians is a relatively recent phenomenon that has eroded physician autonomy and earnings. There are still hospitals like this that don't employ physicians (or have at least some departments which are not employed). Hospitals were just places doctors came to work, and privileges gave the ability for physicians to work at said hospital (including rounding on their patients when they were admitted) without conferring any employment relationship with the hospital. It sounds like this hospital is operating on this model, at least for you. This is a great deal (not commenting on the rent but of course renting at the hospital is going to cost more than it would otherwise), I would certainly take it. As long as you reserve the right to screen your patients appropriately,this creates a great referral source for you. And actually, it works out better for you if facility fees cant be billed (since that money wouldn't go to you anyway) and means your reimbursement rate from insurances should be higher.

Those rates suck though - it's depressing to think there are large parts of the country where commercial insurance pays worse than medicare. For me medicare pays $209/hr for therapy, and insurance more than double that. but I work for an evil empire that is able to negotiate ridiculous rates with insurance companies (though the medicare rate is standard). If I had my own solo pp and accepted medicare, I would get $260/hr.