My first real job opportunity (private practice)….need some guidance

[FreudianSlippers]

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For those that have been following my posts recently, you have an idea that I’m pretty anxious about being unemployed for the first time in 6 years. I just finished my fellowship and am waiting for my license paperwork to process. I think I may have fallen into a good situation, but it’s hard for me to gauge since I have zero experience with private practices.
Here’s the deal. There is a psychologist in my area who I have heard really good things about from previous supervisors. I've already met with him and he seems extremely genuine and easy to work with. He has been doing his own private practice for 5 years, and is looking to expand and hire another person. He’s located in a wealthy part of a big city, does not take insurance, and charges around $250 per session (he has a full case load). If I were to take this job, he would provide mentorship/supervision/consultation as needed, office space/supplies, and help me build referrals. My starting fee would be 150, and it would be split 60 (me)/ 40. Due to office availability, I would only see about 15 clients per week. I’d probably want a side job as well for the extra dough. I would need to incorporate myself and buy malpractice insurance.

It seems like a good position to begin building up my experience, as I have been wanting to get into private practice for a long time, but part of me is freaked out and just wants to wait for a more stable, 9-5 full time job at an AMC or counseling center. I would love to hear anybody’s thoughts on this or advice.

 

[deleted343839]

A few thoughts. First, perhaps this position appeals to you because you want more mentorship and guidance as you launch into private practice. However, there are more cost effective ways of getting this kind of mentoring. 40% seems like a lot to pay for overhead on top of your malpractice and legal/business costs. Break down what you are really paying for in this scenario and make sure it is worth the money (eg, how much do offices lease for in this market?). Second, $90/hr (is that 1099 income?) is comparable to what many insurance companies reimburse for psychotherapy, so I would look into your market more closely before losing out on what could be a substantial amount of income. Third, since you'd be capped at about 15 hrs/week, what might you do for a second job? You wouldn't be able to compete with your employer, so what would your options really be in this scenario? Finally, if you are interested in an AMC job, it would probably serve you well to network more aggressively and wait it out a bit longer. Apply for jobs if they're out there, even if your licensure is pending. But I can't tell what you really want to do, other than have a job.

 

[Doctor Eliza]

I’d want to do some research into how viable a cash only practice is for a newly minted PhD in your city. Around here, there are very few psychologists who don’t take insurance. The ones who are cash only tend to have 30 years of experience and some sort of special area of expertise. No offense intended, by why see a newbie where you can’t use your insurance when you could go elsewhere and at least use your insurance? I think it might be challenging to get even 15 clients per week cash only.

If you are competitive for an AMC or something of that sort, I think that’s a much better route. Good luck!

 

[FreudianSlippers]

A few thoughts. First, perhaps this position appeals to you because you want more mentorship and guidance as you launch into private practice. However, there are more cost effective ways of getting this kind of mentoring. 40% seems like a lot to pay for overhead on top of your malpractice and legal/business costs. Break down what you are really paying for in this scenario and make sure it is worth the money (eg, how much do offices lease for in this market?). Second, $90/hr (is that 1099 income?) is comparable to what many insurance companies reimburse for psychotherapy, so I would look into your market more closely before losing out on what could be a substantial amount of income. Third, since you'd be capped at about 15 hrs/week, what might you do for a second job? You wouldn't be able to compete with your employer, so what would your options really be in this scenario? Finally, if you are interested in an AMC job, it would probably serve you well to network more aggressively and wait it out a bit longer. Apply for jobs if they're out there, even if your licensure is pending. But I can't tell what you really want to do, other than have a job.

Wow...thank you so much for the thoughtful response MamaPhD, I really appreciate it. This is great food for thought...i'll definitely do more research to make sure what I am paying is really worth it and the pros/cons of insurance. As for a second job, I was thinking about part time at a counseling center or maybe another private practice in another part of town? I'd probably have to read our contract to see if this would be doable. As for your last question...the more I think about it, the more I want to eventually open up my own group practice. I've sort of been seeing this job as a step in that direction.

 

[FreudianSlippers]

I’d want to do some research into how viable a cash only practice is for a newly minted PhD in your city. Around here, there are very few psychologists who don’t take insurance. The ones who are cash only tend to have 30 years of experience and some sort of special area of expertise. No offense intended, by why see a newbie where you can’t use your insurance when you could go elsewhere and at least use your insurance? I think it might be challenging to get even 15 clients per week cash only.

If you are competitive for an AMC or something of that sort, I think that’s a much better route. Good luck!

Thanks Doctor Eliza! I think i'm moderately competitive for an AMC, but the ones in my area are very prestigious and seem incestuous in how they hire (i.e. you need major connections). I think you are right that it might be challenging...which is hopefully why I can procure a part time job that is more stable. I wonder if I could even apply to another group practice..hmmm...

 

[Doctor Eliza]

Just a heads up, that if you join an insurance company’s panel with practice B, you won’t be able to refuse to accept their insurance at practice A.

 

[WisNeuro]

Just a heads up, that if you join an insurance company’s panel with practice B, you won’t be able to refuse to accept their insurance at practice A.

Also, once you opt out of Medicare/aid, isn't there a moratorium period before you can opt back in? This only comes into play if you wanted to join some sort of system for work at a later point. This may be a sticking point for getting some work at a counseling center.

 

[Sanman]

Things to think about...

1. Under the current 15 hr limit, the max you can make is 60k (without benefits, I assume?). Is that enough for you to cover expwnses?
2. Which 15 hours will you get? There are peak hours and off hours. 15 off hours may net few to no clients. Some office locations get a lot of lunch time clients. My experience was evenings were primetime in the suburbs.
3. Cash only practices are slower to build. Are you okay making only 10k or something like that in this job if there are no clients? For a year or two even if you need to build up a reputation and market? How much of a safety net do you have to live on(some people have a lot and others have little).
4. Are there people at the practice that started there and stayed on for years? What are their experiences? They may help you decide whether to invest time in this practice.
5. Do you like customer service work?

These questions are all a way of saying, are in a position to sacrifice in the short term to build a cash practice in the long term? Are you in a financial position to do so?do you want to?

 

[FreudianSlippers]

Things to think about...

1. Under the current 15 hr limit, the max you can make is 60k (without benefits, I assume?). Is that enough for you to cover expwnses?
2. Which 15 hours will you get? There are peak hours and off hours. 15 off hours may net few to no clients. Some office locations get a lot of lunch time clients. My experience was evenings were primetime in the suburbs.
3. Cash only practices are slower to build. Are you okay making only 10k or something like that in this job if there are no clients? For a year or two even if you need to build up a reputation and market? How much of a safety net do you have to live on(some people have a lot and others have little).
4. Are there people at the practice that started there and stayed on for years? What are their experiences? They may help you decide whether to invest time in this practice.
5. Do you like customer service work?

These questions are all a way of saying, are in a position to sacrifice in the short term to build a cash practice in the long term? Are you in a financial position to do so?do you want to?

Great questions Sanman...thank you so much for taking the time to reply. The max $$ for now will be 60k (without benefits)...but I am lucky in that my wife has a stable income with benefits, so I don't have to worry about that at the moment. Eventually the psychologist I work for will have me increase the cost of sessions to $175 and then to $200, but that will depend on how things go at first. Also, if I see a certain amount of clients the 60/40 split changes and I get a higher percent. I'll be working one full day and then one evening and one half-day on the weekend, so hopefully I can capture some of those prime hours. It also leaves me free for that part time job if I can get one.

Your final question really hit the nail on the head, and In thinking about it I do believe that's what I ultimately want. I'm privileged right now to have a dual income and no kids (yet)...so this might be a great opportunity for that. One important piece is that this psychologist is currently in private practice and I will be the first person that works under him, so I can't really talk to others about their experience. But...this person is highly successful and I have heard really good things from past supervisors. I'm trying not to be overly optimistic (and everyone's posts in this thread are incredibly grounding) but I do believe in him. Plus, the contract I would sign would be for 1 year with a couple month trial period, so worst case I eat my losses and move on.

 

[PsyDr]

You can always make more money in a PP than an AMC. The trade off is always guaranteed income vs. income potential. And some weird narcissistic need where you can say "I'm a professor at AMC".

Take an honest self assessment. If you're really willing to hustle, and are willing to tolerate some income fluctuations, I would go with the PP. If it were me, I'd start working on a buy out plan with the older psychologist, gently laying the foundation for that conversation over years. If you're not really self motivated, or have a significant need to have a title, or can't tolerate income fluctuations, go for the AMC. If I chose the AMC, I would consider their practices surrounding maternity/paternity leave, if that is something you are possibly considering in the future.

@Doctor Eliza Your argument about cash pay just doesn't make sense to me. Based on that logic, why would anyone ever use anything other than the free clinic? Why would luxury cars ever be sold when a base model Honda can transport you just as well or better? Why would private schools exist in wealthy areas? People pay for exclusive services, even if they are not better. Sometimes the exclusivity is the point.

 

[Doctor Eliza]

@Doctor Eliza Your argument about cash pay just doesn't make sense to me. Based on that logic, why would anyone ever use anything other than the free clinic? Why would luxury cars ever be sold when a base model Honda can transport you just as well or better? Why would private schools exist in wealthy areas? People pay for exclusive services, even if they are not better. Sometimes the exclusivity is the point.
[/QUOTE]

People pay a lot of money for insurance, and most people like to use their insurance. If people are so well off financially that they can pay cash for services, they are going to want someone who has already shown themselves to be the "cream of the crop" and typically not a newly licensed individual. Makes sense to me.

 

[PsyDr]

@Doctor Eliza

None of that addresses my points.

People pay for box seats at sports games when TV offers a better view. Roche Bobois sells 5 figure sofas that are not better than an Ethan Allen one. The value is in those products being exclusive. But, you know this. See any marketing book about luxury branding. See any high end purse, high heel, etc. It has ZERO to do with performance, and everything to do with perceived exclusivity.

Tell me you'd want your child to sit in Arthur Freeman's waiting room inside a psychiatric nursing home in Chicago.

 

[Doctor Eliza]

Which seems more exclusive to you? A newbie with no caseload or someone who has a packed schedule and 30 years experience? I’m saying it is an uphill battle to make a newbie look exclusive.

 

[Sanman]

In my experience, this argument is academic at best. The cash only demographic at $80, $150, and $250 is likely qualitatively different. We aren't talking luxury goods exclusivity. This would be different if FS would also be charging $250. There are other reasons to pay out of pocket other than perceived exclusivity or quality.

 

[PsyDr]

@Doctor Eliza I think our significant differences in experience in PP are affecting this conversation.

@Sanman Exclusivity is an extremely broad subject. It could include not having your kid's test results known to schools. It could include not having your mental health information disclosed to health insurance, life insurance, disability insurance, licensing boards, attorneys, etc. It could include a desire to have a nicely appointed waiting room. It could include not having to sit next to people you dislike in a waiting room. It could include geographical preferences. There is a huge marketing literature on this subject. Trading Up by Silverstein is a decent and easy read on the subject.

 

[Sanman]

@Doctor Eliza I think our significant differences in experience in PP are affecting this conversation.

@Sanman Exclusivity is an extremely broad subject. It could include not having your kid's test results known to schools. It could include not having your mental health information disclosed to health insurance, life insurance, disability insurance, licensing boards, attorneys, etc. It could include a desire to have a nicely appointed waiting room. It could include not having to sit next to people you dislike in a waiting room. It could include geographical preferences. There is a huge marketing literature on this subject. Trading Up by Silverstein is a decent and easy read on the subject.

I would include the bolded reasons, as well as not being on a waiting list, and having high deductible health insurance where you need to pay out of pocket and have it count towards a deductible and reasons other than exclusivity to pay cash for treatment, IMO. I guess it all comes down to how you define things.

 

[PsyDr]

I would include the bolded reasons, as well as not being on a waiting list, and having high deductible health insurance where you need to pay out of pocket and have it count towards a deductible and reasons other than exclusivity to pay cash for treatment, IMO. I guess it all comes down to how you define things.

I include that concept in exclusivity. But fair enough.

 

[Therapist4Chnge]

The clinicians who seem to do the best have a niche and they can differentiate themselves from everyone else. As a newly licensed person i’d probably recommend going the AMC route for a few years to build your CV and have a bit more stability. There are plenty of downsides, but it sure helps when you transition to private practice to have an AMC on your CV.

I think the split you mentioned isn’t great, but it isn’t horrible. However, I think that rate with the split is untenable. If you are set on PP, you’d be better off negotiating with 2-3 commercial plans and keeping all of the $. Sure you may not have the same level of mentorship, but you can supplement that mentorship w a local consultation group, seminars, MBA-type courses, etc.

I know many midlevels that charge $175-$250 for the intake and $125-$200 for follow up. You should be able to do better than that for your cash rates. You may need to take 2-3 commercial insurance plans to cover your costs (reimbursement will be on the low end of those rates) for the first 1-2+ years, as you build the cash pay portion of your practice.

Never accept the first offer for rates and know your worth. I have always believed in seeing less ppl for a higher rate than trying to win on volume.

I still think you should go with an AMC while you figure out how to build out a cash practice, which will take longer than you think. It also is great for networking.

 

[Sanman]

The clinicians who seem to do the best have a niche and they can differentiate themselves from everyone else. As a newly licensed person i’d probably recommend going the AMC route for a few years to build your CV and have a bit more stability. There are plenty of downsides, but it sure helps when you transition to private practice to have an AMC on your CV.

I think the split you mentioned isn’t great, but it isn’t horrible. However, I think that rate with the split is untenable. If you are set on PP, you’d be better off negotiating with 2-3 commercial plans and keeping all of the $. Sure you may not have the same level of mentorship, but you can supplement that mentorship w a local consultation group, seminars, MBA-type courses, etc.

I know many midlevels that charge $175-$250 for the intake and $125-$200 for follow up. You should be able to do better than that for your cash rates. You may need to take 2-3 commercial insurance plans to cover your costs (reimbursement will be on the low end of those rates) for the first 1-2+ years, as you build the cash pay portion of your practice.

Never accept the first offer for rates and know your worth. I have always believed in seeing less ppl for a higher rate than trying to win on volume.

I still think you should go with an AMC while you figure out how to build out a cash practice, which will take longer than you think. It also is great for networking.

As a mild aside, I never got the appeal of AMC gigs. We have a fairly large AMC in my area and they pay less than the VA for a heavier workload and just as many hoops. For my money, I would find a steady contract gig in an unrelated area of work that can fill the time and money gap while attempting to setup the private practice. That way you can taper up or down based on your needs. However, that is my comfort zone/bias as I did this for post-doc and it worked out alright.

 

[FreudianSlippers]

The clinicians who seem to do the best have a niche and they can differentiate themselves from everyone else. As a newly licensed person i’d probably recommend going the AMC route for a few years to build your CV and have a bit more stability. There are plenty of downsides, but it sure helps when you transition to private practice to have an AMC on your CV.

I think the split you mentioned isn’t great, but it isn’t horrible. However, I think that rate with the split is untenable. If you are set on PP, you’d be better off negotiating with 2-3 commercial plans and keeping all of the $. Sure you may not have the same level of mentorship, but you can supplement that mentorship w a local consultation group, seminars, MBA-type courses, etc.

I know many midlevels that charge $175-$250 for the intake and $125-$200 for follow up. You should be able to do better than that for your cash rates. You may need to take 2-3 commercial insurance plans to cover your costs (reimbursement will be on the low end of those rates) for the first 1-2+ years, as you build the cash pay portion of your practice.

Never accept the first offer for rates and know your worth. I have always believed in seeing less ppl for a higher rate than trying to win on volume.

I still think you should go with an AMC while you figure out how to build out a cash practice, which will take longer than you think. It also is great for networking.

good advice! I also got the started pay wrong, its going to start at 175, and then raise from there. Also, in addition to mentorship etc, the psychologist is full on clients and I think will be able to provide a lot of initial referrals....we'll see whether or not those referrals want to see a newly licensed person 🙂. I do have a niche/specialized interest though in the anxiety disorders area, I have a lot of training in CBT/Exposure for panic disorder, so maybe that could be a selling point. In terms of negotiating, I think I may have to push myself to do that, you're 100% right about not accepting 1st offer for rates. I'll at least ask about possibilities in the future for a greater percentage.

 

[deleted343839]

I still think you should go with an AMC while you figure out how to build out a cash practice, which will take longer than you think. It also is great for networking.

As a mild aside, I never got the appeal of AMC gigs. We have a fairly large AMC in my area and they pay less than the VA for a heavier workload and just as many hoops. For my money, I would find a steady contract gig in an unrelated area of work that can fill the time and money gap while attempting to setup the private practice. That way you can taper up or down based on your needs. However, that is my comfort zone/bias as I did this for post-doc and it worked out alright.

There is a lot of variation. My first position at an AMC had a salary that exceeded the local VA starting salary and had far superior benefits. But perhaps it was an unusual AMC, and an unusual gig. I agree it's a nice way to build a reputation while gaining (often interesting) experience and generating a predictable income. Your mileage may vary. Pro tip: get appointed in a department other than psychiatry.

 

[AcronymAllergy]

There is a lot of variation. My first position at an AMC had a salary that exceeded the local VA starting salary and had far superior benefits. But perhaps it was an unusual AMC, and an unusual gig. I agree it's a nice way to build a reputation while gaining (often interesting) experience and generating a predictable income. Your mileage may vary. Pro tip: get appointed in a department other than psychiatry.

I've not worked in an AMC, but the above is what I've heard from folks who have as to reasons why they went that route (e.g., paid better than other local employers, had better benefits, reputation component, networking, and/or allowed greater variety of practice opportunities such as research buyout). And yes, every psychologist I know who's been in a non-MH department has been happier than those in psychiatry or MH.

 

[Therapist4Chnge]

Definitely avoid Psychiatry Depts whenever possible bc we are mostly viewed as second-class citizens. PM&R, Neurology, Neurosurgery, Oncology, ED, etc. are all much better options. I know Primary Care / IM /Peds are other options, but I know far less about them.

 

[FreudianSlippers]

Well...the one AMC I was seriously considering was through a psychiatry dept, I guess that makes my decision a little easier Though starting pay was around 100k with benefits

 

[AbnormalPsych]

Even though the field is going that direction, all the information I have says avoid pri-care at all costs.

 

[Therapist4Chnge]

Even though the field is going that direction, all the information I have says avoid pri-care at all costs.

Some may like the treatment model, but I think it is problematic. There seems to be a concerted effort to shoehorn clinicians into triage positions, but the limited time and volume of cases will likely make the work very different than traditional therapy; a bandaid at best. I’ve also seen most positions get shifted to mid-levels bc it’s basically mood disorder and substance abuse stuff and it’s far cheaper to the employer.

I’m not sure about AMCs, but hospitals like Kaiser are all about volume. The VA had a model (not sure if it has changed since I did training) of screening during/after primary care visits, but then the veterans get funneled into groups and a much smaller % receive individual care. This allowed for wait times to be a lessened (in response to bad press and pressure from veteran advocacy groups bc of the suicide rates), but group treatment isn’t necessarily the best care for some/many of those veterans.

 

[Sanman]

Some may like the treatment model, but I think it is problematic. There seems to be a concerted effort to shoehorn clinicians into triage positions, but the limited time and volume of cases will likely make the work very different than traditional therapy; a bandaid at best. I’ve also seen most positions get shifted to mid-levels bc it’s basically mood disorder and substance abuse stuff and it’s far cheaper to the employer.

I’m not sure about AMCs, but hospitals like Kaiser are all about volume. The VA had a model (not sure if it has changed since I did training) of screening during/after primary care visits, but then the veterans get funneled into groups and a much smaller % receive individual care. This allowed for wait times to be a lessened (in response to bad press and pressure from veteran advocacy groups bc of the suicide rates), but group treatment isn’t necessarily the best care for some/many of those veterans.

It really hasn't changed much at all. There is more individual tx at my VA, but time limited. The big change is a lot is now shifting to community care with the Mission Act. This is leading to obscene wait times for sustained treatment. I think our VA specialty units are a 2-3 month wait. Community is bordering on 9 months if there is any availability. HBPC is primary care geriatrics in some ways and I refer to myself as a bandaid all the time for the true mental health people (PTSD, SA, moderate to severe mood dx). The only things I treat well are true geriatrics stuff (dementia, loss of independence/life stage issues, caregiver burnout)

 

[foreverbull]

For those that have been following my posts recently, you have an idea that I’m pretty anxious about being unemployed for the first time in 6 years. I just finished my fellowship and am waiting for my license paperwork to process. I think I may have fallen into a good situation, but it’s hard for me to gauge since I have zero experience with private practices.
Here’s the deal. There is a psychologist in my area who I have heard really good things about from previous supervisors. I've already met with him and he seems extremely genuine and easy to work with. He has been doing his own private practice for 5 years, and is looking to expand and hire another person. He’s located in a wealthy part of a big city, does not take insurance, and charges around $250 per session (he has a full case load). If I were to take this job, he would provide mentorship/supervision/consultation as needed, office space/supplies, and help me build referrals. My starting fee would be 150, and it would be split 60 (me)/ 40. Due to office availability, I would only see about 15 clients per week. I’d probably want a side job as well for the extra dough. I would need to incorporate myself and buy malpractice insurance.

It seems like a good position to begin building up my experience, as I have been wanting to get into private practice for a long time, but part of me is freaked out and just wants to wait for a more stable, 9-5 full time job at an AMC or counseling center. I would love to hear anybody’s thoughts on this or advice.

I was offered a similar position in a city metro office for a 50/50 split as a postdoc years ago. Knowing I’d have to build my own client base (with only some help with referrals), despite knowing I wanted to go into private practice, I simply couldn’t afford this option—and turned it down.

If you have the privilege to not be in a precarious financial position and intend to do private practice anyway, it might be worth the financial risk to get mentoring and business connections from a seasoned psychologist who can help you get your feet wet and this would be MUCH easier than starting a business on your own, coming from someone who did just that with zero mentoring.

If you are associated with the psychologist and have backing from the person, you might get some referrals because of the other psychologist’s reputation and get an opportunity to build your own reputation at the same time. It’s risky financially, but the connections you’ll make and the reputation you can start to build could really pay off in the longterm IF private practice is your end goal.

 

[FreudianSlippers]

I was offered a similar position in a city metro office for a 50/50 split as a postdoc years ago. Knowing I’d have to build my own client base (with only some help with referrals), despite knowing I wanted to go into private practice, I simply couldn’t afford this option—and turned it down.

If you have the privilege to not be in a precarious financial position and intend to do private practice anyway, it might be worth the financial risk to get mentoring and business connections from a seasoned psychologist who can help you get your feet wet and this would be MUCH easier than starting a business on your own, coming from someone who did just that with zero mentoring.

If you are associated with the psychologist and have backing from the person, you might get some referrals because of the other psychologist’s reputation and get an opportunity to build your own reputation at the same time. It’s risky financially, but the connections you’ll make and the reputation you can start to build could really pay off in the longterm IF private practice is your end goal.

Thanks for commenting on your experience @foreverbull ! That's extremely helpful to read, and sums up exactly why I do want to take this position right now. It's interesting how I never actually thought in concrete ways about what I want to do with my life after I am licensed. Maybe it was a survival mechanism to not get ahead of myself with the millions of hoops to jump through. But the more I process it now (with the help of this thread) the more I realize that eventually, I want to start my own group practice. I do think this will be a great way to start this ,especially since I am okay financially at the moment.