How Realistic Is It to Set up a Cash Only Psychiatric Private Practice?

[prominence]

I have seen cash only practices in other specialties. Does this type of psychiatric practice only exist in major cities (i.e. NYC)?

Also, do these practices typically do med checks only, psychotherapy only, or a combination of the two?

Any responses would be welcome. Thanks!

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[prominence]

bump

 

[whopper]

I don't have any experience in this area but I have seen a number of doctors do this. I think if you want to do this you first need a good reputation that'll make patients feel this is justified. The other thing is the area--it has to be a place where there's a population that'll be in tune with paying cash only.

 

[psychfriend]

I don't have any experience in this area but I have seen a number of doctors do this. I think if you want to do this you first need a good reputation that'll make patients feel this is justified. The other thing is the area--it has to be a place where there's a population that'll be in tune with paying cash only.

And good reputations don't grow on trees; you got to earn it aka practice for several years first accepting insurance or building your reputation in academia. Either way, it's not like you can just start out and demand cash only.

 

[whopper]

The APA from what I understand gives free advice to members on creating a private practice.

 

[Kluver Bucy]

Board certification in child and adolescent would help.

 

[robberbaron]

You can ABSOLUTELY start out cash only--however this is dependent on a number of factors. First you have to practice in an area wealthy enough and large enough to allow for a fee for service practice; secondly, you need to have trained at a residency program with a good reputation to draw affluent clients; and third, you have to be willing to sacrifice the opporutnity to see potentially more exciting and varied manfestations of psychiatric illness present in individuals from other socioeconomic classes. Personally I know tons of young psychiatrists on the west coast who started out with part-time inpatient jobs after residency who manged to build up full time cash only practices on the side in as little as 2-3 months.

 

[psychfriend]

You can ABSOLUTELY start out cash only--however this is dependent on a number of factors. First you have to practice in an area wealthy enough and large enough to allow for a fee for service practice; secondly, you need to have trained at a residency program with a good reputation to draw affluent clients; and third, you have to be willing to sacrifice the opporutnity to see potentially more exciting and varied manfestations of psychiatric illness present in individuals from other socioeconomic classes. Personally I know tons of young psychiatrists on the west coast who started out with part-time inpatient jobs after residency who manged to build up full time cash only practices on the side in as little as 2-3 months.

You sound like an infommercial. The reality is that wealthy areas are already saturated with cash based psychiatrists so it's not as easy as you assume it is to establish a cash-only practice there. There is a reason why there are more plastic surgeons than pediatricians in Beverly Hills. There are plenty of well educated and experienced psychiatrists who have cash-only practices in affluent areas. Also, it's unlikely a recent grad can afford to establish a practice in a wealthy area with a lease being 2-3 times what it is in a non-affluent part of a city. Most graduates can't afford to pay 20K-30K per month in a lease. They are also at a disadvantage in regards to advertising. Advertising is extermely expensive. A decent ad in the yellow pages can cost anywhere from 50K-100K depending upon your location. Those google ads and search results are not cheap either. Many physicians will spend 500-1000 a month just on those ads. Furthermore, many of those wealthy patrons look at your experience more than your degree. A psychiatrist just out of residency is going to have a difficult time competing with someone with 15 years of experience. And wealthy patients don't just open the phone book or read their website and see "Harvard" under credentials; they ask their other wealthy associates who they recommend and it likely won't be a guy who graduated from residency last summer. Residency reputation doesn't always determine a psychiatrist's reputation either. It may give a graduate an edge over someone who graduated from a lesser program but what one does from there is dependent on his or her skills and personality. Some of the most successful psychiatrists in our city are FMG's. They developed their reputation in the community over several years. I do know some recent graduates(Yale and Longwood) who are in the process of establishing a cash-only practice. they take mostly insurance at this time while they slowly cut insurance programs and accept cash paying patients. They are not practicing in an affluent part of the city either as they can't afford to. If they only accepted cash-paying patients, they would go broke in as little as 2-3 months.

 

[robberbaron]

You sound like an infommercial. The reality is that wealthy areas are already saturated with cash based psychiatrists so it's not as easy as you assume it is to establish a cash-only practice there. There is a reason why there are more plastic surgeons than pediatricians in Beverly Hills. There are plenty of well educated and experienced psychiatrists who have cash-only practices in affluent areas. Also, it's unlikely a recent grad can afford to establish a practice in a wealthy area with a lease being 2-3 times what it is in a non-affluent part of a city. Most graduates can't afford to pay 20K-30K per month in a lease. They are also at a disadvantage in regards to advertising. Advertising is extermely expensive. A decent ad in the yellow pages can cost anywhere from 50K-100K depending upon your location. Those google ads and search results are not cheap either. Many physicians will spend 500-1000 a month just on those ads. Furthermore, many of those wealthy patrons look at your experience more than your degree. A psychiatrist just out of residency is going to have a difficult time competing with someone with 15 years of experience. And wealthy patients don't just open the phone book or read their website and see "Harvard" under credentials; they ask their other wealthy associates who they recommend and it likely won't be a guy who graduated from residency last summer. Residency reputation doesn't always determine a psychiatrist's reputation either. It may give a graduate an edge over someone who graduated from a lesser program but what one does from there is dependent on his or her skills and personality. Some of the most successful psychiatrists in our city are FMG's. They developed their reputation in the community over several years. I do know some recent graduates(Yale and Longwood) who are in the process of establishing a cash-only practice. they take mostly insurance at this time while they slowly cut insurance programs and accept cash paying patients. They are not practicing in an affluent part of the city either as they can't afford to. If they only accepted cash-paying patients, they would go broke in as little as 2-3 months.

First, you're not even an MD yet and it's evident that you have very little knowledge about the level of demand for well trained psychiatrists nationwide (particularly in affluent areas). I'm currently a resident and at my hospital there is a 2-3 month waiting period simply to see a psychiatrist for an initial evaluation. The psychiatrists in this particular area are predominantly fee for service and charge about $315/hr, average. Recent grads from my program that have recently set up shop are charging $250-$280/hr, fee for service, because in this area you would be remiss not to charge at that level given the high cost of living. These patients certainly look for quality but just like most people without medical training they look at your medical school and residency programs as the primary indicators of quality. I don't know where you are currently a medical student but your perspective on what is possible in terms of money/practice opportunities in psychiatry is quite limited from what I gather from your post--you need to do some real research and talk to residents at highly competitive programs in major cities.

 

[PsychMD2100]

RobberBaron,

Are you a medical resident or a dental resident? Your descriptor says Dental Student. Just curious.

 

[psychfriend]

Hey all,

Did anyone else hear widely varying accounts of psych starting salaries on the interview trail? At some of the more competitive programs I interviewed at (U.S. News top 10) I was told by PDs and faculty that some of the grads were being offered "absurd" sums of money for private practice in the NE and on the West Coast (i.e.250-300K+). However at strong, though less-renowned programs, I heard about starting salaries that were only around 100K. Are there any current residents or PDs out there that can provide a bit of insight into the role which residency prestige plays in starting compensation?

To any psychiatrists in private practice: could you please shed some light on the business aspects of running a practice? For those of us entering training and in training, I feel it would be helpful to get some idea of what we may encounter when it's time to hang up a shingle. It would be particularly interesting to know about practice arrangements (solo v. group); patient type (medicare/medicaid, private ins. v. fee for service); how you bill and what rates are typical for your area; hiring ancillary staff (receptionists, billers etc); and office space (rent v. buy)


I'm not so sure how much influence residency prestige has over wealthy patients. Down here in West Palm Beach you'd be hard pressed to find a private practitioner charging less than <200/hr. Many of them have websites and apparently received training at standard academic programs i.e. no Harvard, UCSF etc. I think positioning is the biggest factor in drawing the rich i.e. they like local, easily accessible psychiatrists. My point is that there are far more wealthy individuals with emotional problems than there are private practitioners from the "top" programs to care for them; though I can see how coming from a top program might make market entry a bit easier.

You wrote the above posts last April. You claim to know much about the income of psychiatrists yet you asked these very basic question 5 months ago. In the 3rd paragraph, you contradict yourself. You rationalize the idea of a recent graduates establishing a cash-only practice provided they went to a top program. In the third paragraph, you say that anyone who positions themselves in a wealthy area can set up a cash-only practice because there are "far more wealthy individuals with emotional problems than there are private practitioners from the "top" programs to care for them" This leads me to believe you don't know what you are talking about and simply want to believe the notion. Also, your status lists you as a dental student but in all of your posts, you claim to be a medical student who recently matched a top 10 psych residency. I question if you are resident let alone a medical student. I have actually done psych rotations and worked alongside psychiatrists so I'm not getting my information second hand anecdotally from "friends" in the field. I'm also applying for psych so needless to say, I think I know a little more about the field than you do and your information is flawed to say the least. And no, most people aka patients don't evaluate physicians based on their medical school and residency. If you were a physician let alone a medical student, you would realize that. Most patients don't know where their physician attended school let alone residency. I can understand that a patient who is paying fee for service would seek out pedigree but not at the cost of a lack of experience. Affluent areas like SF have several psychiatrists that have experience in addition to high educational qualifications so it's unlikely someone's degree can command a pure fee for service practice in an area like SF or even west Hollywood. I also live in a very affluent area in the west so I'm well aware of the type of pyschiatrists who charge fee for service treatment. Based on your post, I'm assuming you are referring to the San Francisco area and most likely UCSF? Am I correct in assuming that?

The fees that you mentioned do not sound out of the ordinary. The difference, however, is that nearly all psychiatrists wil establish their fees based on a fee for service charge. For example, one of the psychiatrist I rotated with charged $500 for an initial evaluation based on a fee for service charge. However, he still accepted insured patients and those insurance companies didn't reimburse him $500 for that consult. It's very difficult to start a pure cash-based, fee for service type of practice without establsihing your reputation first regardless of where you graduated.

 

[psychfriend]

RobberBaron,

Are you a medical resident or a dental resident? Your descriptor says Dental Student. Just curious.

Oh, he just changed it to medical resident. I think he realized his posts would have less credibility if he claimed to be a dental student. I wonder if he will change it to "attending" next