New to Independent Contracting, - UPDATE with questions

[cookymonster]

Background: Inpatient psychiatrist, five years post residency, left full time job last month. Sick of employment, headaches with hospital administration. Looking at part-time IC options but don't want to deal with an agency taking a big cut of the money.

I'm in a great situation financially and also very savvy from years of reading White Coat Investor and saving.

My two main options are:
A: work locally for several HCA hospitals on weekends. Do not yet know the rate but do not think it will be that competitive. Further discussion with regional VP planned in two weeks. Likely marginal tax rate F+S 27% because I do not think I will want to work more than one weekend a month, though I could make a lot more if I elected to take more weekends.
B: work in low-volume unit in rural boonies of Midwest for one week a month. Seems like a higher need, slightly desperate facility. How much I make, pay in taxes depends entirely on how long position remains open. Marginal rate could be up to 42% F+S if I work there 13 weeks in 2020.

Do not yet know which option I would rather work yet, and that's not really what I want to make the focus of the thread. Basically, I am still gathering information, but option A has the advantages of being local and very flexible with more time off (I am very financially stable and have minimal financial pressure, but I do want to be compensated well for my work), while Option B has the disadvantage of being in the middle of nowhere but possibly a low-stress, unicorn work opportunity while it lasts. My questions are more financial/business oriented.

With Option A, there are few if any business expenses since I can't deduct the commute. They may reimburse me for the mileage but I am not expecting it.

Option B is offering a flat daily rate and is also offering to cover travel, lodging. I think it would be a win-win if I got a higher daily rate and paid for my own business expenses. Why? For one, I would almost certainly budget travel expenses more efficiently. I could stay at Motel 6 or Airbnb rather than the Comfort Inn. I can take a Lyft an hour each way to the airport rather than rent a car for a week. Second, I could deduct travel and lodging as a business expense. As above, that could mean up to a 42% tax deduction. Third, I can use the expenses for credit card churning if I want to bother with that. Finally, I could customize traveling so that I could fly in and out to different cities, work just before or after vacations, etc.

Air travel round trip at Option B would likely come to $400 per assignment. Decent hotels in the town run $75 a night, so for an 8-day assignment that would cost about $600. Car rentals for eight days are $375-400. Total = $1400 for seven days worked, aside from the cost of the extra work their administrators have to do. I am assuming this is what THEIR costs would be but for me, the costs would be significantly less for the reasons described above (i.e. a market inefficiency). So to me, it makes sense to propose that I offer to cover all the travel and lodging myself for an extra $200 a day.

I just thought I'd post this to solicit responses from anyone who's worked in locums. Am I thinking about this the right way? How would this be received by a recruiter and their administration? It seems to me like a win-win, but I don't want to come across as gauche or difficult, nor do I want to be penny-wise and pound-foolish.

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[PsyDr]

1) Staying in crappy hotels and using cheap cheap cheap airlines is a recipe for burnout. You still have to eat. And you wouldn’t recommend that a patient sit in a hotel room and eat fast food one week a month.

2) The cheap air flights are likely a bad idea. A decent rule of thumb is that the cheaper the ticket, The more likely you are to get bumped. For vacations that might be okay. For having an uncovered hospital, that’s probably not okay. For running up those miles, it’s a bad idea. It might be a bad idea to have the onus for missing a flight be on you. It might be preferable to have that responsibility on them.


3) if you’re paying 42%, you’re doing it wrong. Using minimal effort you could thrown ~$50k into a sep or 401k and destroy that. Even more if you have a defined contribution plan. Even more if you have a multi tiered LLC formation. Even more if you’re doing the 6000lbs deduction. Get a business Amex platinum.

4) it’s a MARGINAL tax rate.

5) reimbursement for expenses is not a bad way to go.

6) look into the median food deduction form the irs. It’s surprisingly high.

 

[cookymonster]

1) Cheapest airline is Delta, and it is really just Delta and American that appear to fly into there. There are no non-stop flights to the nearest airport, which serves a city of just over 100k people. So honestly not a lot of money to be saved here. As far as lodging, I looked into Airbnb, and the main advantage isn't so much that it's half as expensive as most hotels, but that it's only two blocks from the hospital so I wouldn't have to rent a car. I can't believe it costs $60 a day to rent a compact car. Grocery stores are within walking distance so I wouldn't have to eat fast food or other junk.

2) Having the onus of missed flights be on the hospital is a legitimate concern. I can imagine even if it's out of my control, I would shoulder the blame for it. The area has brutal winters, and I could foresee the whole airport closing during a blizzard.

3). I had a total senior moment and forgot to deduct all the 401k employee + profit sharing contributions from AGI. Guessing marginal tax is closer to 24% + 7% = 31% (I was thinking 32 + 10), so good point.

4). Exactly? Marginal tax rate is what you consider when you analyze the true cost of business expenses.

6). $55 a day (can deduct half of this I believe) but this would be a deduction I can take regardless as it is not reimbursed.


#2 is enough of an issue that it might spoil this whole scheme. I just know that the more money that gets wasted on stuff that isn't important to me, the less I get paid. Seeing hospital administration flush money down the toilet is one of the main reasons I got sick of employment.

 

[wolfvgang22]

This is an interesting conversation. I don't have anything to add on the financial aspect, but option B will likely not be laid back. They will probably try to make you do the job of 7 psychiatrists. Location is only part of the reason these jobs go unfilled. Once they get a psychiatrist, they burn them out fast. Short sighted, yes, but that's how it usually is.

 

[TexasPhysician]

The most important calculation ignored is the opportunity cost of travel related time. It adds up and weighs on you.

Estimations:
Packing/prep - 1 hour
Driving to airport/parking/get inside: 1 hour
Recommended to arrive early for flights: 1 hour
Average airline delay: 1 hour
Flight time: 1 hour
Travel to hotel/unpack: 1 hour

Do you like city B? You’ll be away from family/friends and anything forgotten will need to be purchased. Is there a gym there that you are already a member? How much time do you lose with nothing to do or not being able to do what you prefer while on assignment?

I consider all lost time as equivalent to work. If you average in all of the lost time, is job B still paying you more per hour? Usually not in my experience.

 

[Merovinge]

It sounds like you have a lot of flexibility here if you are in such a good place financially as to not need to work at all. If you don't mind the idea of working somewhere else a week/month why not try it out on a limited basis and see your experience dealing with all the travel pain plus being at a place that cannot retain a psychiatrist. If you have FU money, you can always just leave if you don't like it. There's also always telepsych and likely more places in your area for part-time work. You have the upper hand in the negotiation, I would definitely take advantage and use it.

 

[finalpsychyear]

So at this point in your career your only planning to work part time via either 1 week a month away or a few weekends locally just so i understand you correctly?


If you have such flexibilty try both jobs and then dump one after a few months. Other than 401k/sep your not really going to come out ahead with this type of setup if you consider the opportunity loss which texas pointed out.

 

[Sushirolls]

Go for the ultimate independent contractor job. Contract with yourself and open your own private practice.

 

[cookymonster]

Go for the ultimate independent contractor job. Contract with yourself and open your own private practice.

Always detested clinic.

And I do think Texas is probably right. This hospital is in the middle of nowhere and I may be bored out of my mind with no social life for 25% of my life. I was thinking I could fill up the time with reading and going on runs and trips to the gym, but it may not be worth it.I did ask them if there was flexibility in the schedule, as I would rather work 2 weeks every other month (to cut down on travel time), but it sounds like it is pretty set.

For whatever it is worth I had been looking for similar opportunities close to family in a different state, but nothing ever panned out. I am not interested in just jumping from one locums assignment to the next through an agency so was hoping to find a somewhat regular gig, even if it is out of state.

Financially I am doing really well because I've always spent less than $50k a year and have been investing well over half of what I've earned. I just want to work enough to not lose my skills.

 

[Merely]

Always detested clinic.

And I do think Texas is probably right. This hospital is in the middle of nowhere and I may be bored out of my mind with no social life for 25% of my life. I was thinking I could fill up the time with reading and going on runs and trips to the gym, but it may not be worth it.I did ask them if there was flexibility in the schedule, as I would rather work 2 weeks every other month (to cut down on travel time), but it sounds like it is pretty set.

For whatever it is worth I had been looking for similar opportunities close to family in a different state, but nothing ever panned out. I am not interested in just jumping from one locums assignment to the next through an agency so was hoping to find a somewhat regular gig, even if it is out of state.

Financially I am doing really well because I've always spent less than $50k a year and have been investing well over half of what I've earned. I just want to work enough to not lose my skills.

what does really well financially mean to you?

 

[PsyDr]

1) Cheapest airline is Delta, and it is really just Delta and American that appear to fly into there. There are no non-stop flights to the nearest airport, which serves a city of just over 100k people. So honestly not a lot of money to be saved here. As far as lodging, I looked into Airbnb, and the main advantage isn't so much that it's half as expensive as most hotels, but that it's only two blocks from the hospital so I wouldn't have to rent a car. I can't believe it costs $60 a day to rent a compact car. Grocery stores are within walking distance so I wouldn't have to eat fast food or other junk.

2) Having the onus of missed flights be on the hospital is a legitimate concern. I can imagine even if it's out of my control, I would shoulder the blame for it. The area has brutal winters, and I could foresee the whole airport closing during a blizzard.

3). I had a total senior moment and forgot to deduct all the 401k employee + profit sharing contributions from AGI. Guessing marginal tax is closer to 24% + 7% = 31% (I was thinking 32 + 10), so good point.

4). Exactly? Marginal tax rate is what you consider when you analyze the true cost of business expenses.

6). $55 a day (can deduct half of this I believe) but this would be a deduction I can take regardless as it is not reimbursed.


#2 is enough of an issue that it might spoil this whole scheme. I just know that the more money that gets wasted on stuff that isn't important to me, the less I get paid. Seeing hospital administration flush money down the toilet is one of the main reasons I got sick of employment.

A significant part of independent practice is to move revenue into other columns. So the theoretical tax rate isn’t that really important.

Without any complex approaches, you can work that system. Buy a crappy high mpg car that costs less to operate than the standard mileage, and drive. Fly, use miles for yourself. Move your residence to a tax shelter using rv living blogs as a resource.

if you got $1MM, you can consult some wealth a managers for LLC structures. Usually these guys cost $500/hr but they reduce your effective tax rate to ~20-25%. Avoid the hell out of anyone that says offshore unless you’re 8 figures.

personally, I’d caution travel. IME it creates some personal problems including.

 

[FlowRate]

The thing I find incongruent about your post is that you're a. in an excellent financial situation b. don't need to work but c. want to skimp on everything in order to get a cheapo business expenses tax deduction.

Let them treat you like royalty. At least you'll be comfortable while away from home. If you want to stay in a B&B next to hospital, tell them that and I'm sure they'll be happy to pay less for your accommodations. Not sure where you're thinking of working but, without knowing an area, I wouldn't want to commit to walking to work every day/not have immediate car access. I tried ubering around some big but not-coastal cities when I was interviewing for residency and found that it was really inconvenient and expensive in most places. That's assuming there's even ready availability of drivers in the first place. (big part of the inconvenience)

 

[finalpsychyear]

The thing I find incongruent about your post is that you're a. in an excellent financial situation b. don't need to work but c. want to skimp on everything in order to get a cheapo business expenses tax deduction.

Let them treat you like royalty. At least you'll be comfortable while away from home. If you want to stay in a B&B next to hospital, tell them that and I'm sure they'll be happy to pay less for your accommodations. Not sure where you're thinking of working but, without knowing an area, I wouldn't want to commit to walking to work every day/not have immediate car access. I tried ubering around some big but not-coastal cities when I was interviewing for residency and found that it was really inconvenient and expensive in most places. That's assuming there's even ready availability of drivers in the first place. (big part of the inconvenience)

Everyone has their own definition of being in a great situation. "FatFire" status most would agree something like that has it made. I for one when i reach mine in roughly 10 years will still work for pleasure but I wouldn't consider giving up weekends, nights, sleep, or weeks in the middle of nowhere. To each their own.

 

[cookymonster]

Well, I can't stomach the idea of continuing to work full time for toxic hospital administrations, and I'm not seeing a wealth of great options locally. I would rather work weekends than during the week. It is easier to get errands done and do outdoor recreation M-F than Saturday and Sunday. I just wish it didn't entail any call.

Hopefully option A will be somewhat palatable with decent pay. I won't find out until late next week when they want me to meet with the regional vice president.

 

[finalpsychyear]

Well, I can't stomach the idea of continuing to work full time for toxic hospital administrations, and I'm not seeing a wealth of great options locally. I would rather work weekends than during the week. It is easier to get errands done and do outdoor recreation M-F than Saturday and Sunday. I just wish it didn't entail any call.

Hopefully option A will be somewhat palatable with decent pay. I won't find out until late next week when they want me to meet with the regional vice president.

I agree with you on the hospital admin part. There will always be admin involved in any type of employed position even the ones your considering. The only escape is PP or those for profit psych hospitals but they come with their own issues.

PP clinic >>> hospital admin. I think having your own clinic changes whatever you have experienced in outpatient clinics before. The staff you want, the hours and days you want, vacation when you want, and you screen and see the pathology that fits your interests.

Good luck with option A and keep us updated.

 

[cookymonster]

So it's been a couple of months. Here's how this played out:

I met with Option A, which was HCA. They offered me $126 an hour with no benefits. They said they would contact me afterward to negotiate but never did. Good riddance. I don't see how we could ever "meet in the middle."

I tried to pursue Option B. Applied for the IMLC, which finally went through today. When I called them to inform them of this, of course they told me they had hired someone else who is in-state. Fortunately I held my cool over the phone. They may reimburse me the compact fee. I realize it is entirely my fault for not getting this paid upfront. They may contact me in the future if they have a need, but of course I am not holding my breath.

I am basically at square one.

I don't want to own my own practice, don't want to work for $126 an hour, don't want to be employed, and don't want to work full time.

I've been scouring job boards to try to find flexible PRN opportunities, even if they're out of state, but am pretty much coming up empty. Trying to work with hospital systems directly just hasn't worked out at all for me. I've avoided working with an agency at all costs up until now, but push may be coming to shove at this point. I may be stuck doing temporary assignments with a full-time schedule if I go in this direction.

The other option is doing telepsych from home. I've also been resistant to doing outpatient work and seeing patients over a computer screen, but if it keeps me from having to travel and take call I might have to consider it.

So here's where I hope the forum can help me. I know what some of the more reputable locum tenens agencies are, and I will probably start calling them next week. Does anyone have any tips for finding a good telepsych company? I don't really know where to start with that. I saw one site called Iris, but their minimum is 16 hours a week. I struggle to envision myself doing even half of that. I just doubt I'll enjoy it that much, but I just want to start somewhere.

 

[Sushirolls]

You've placed too many restrictions. Something has got to give. What you want, will be quite hard to catch, not impossible, but I suspect other variables in life may bite you before you catch it. Good luck (wo)man.

 

[calvnandhobbs68]

You've placed too many restrictions. Something has got to give. What you want, will be quite hard to catch, not impossible, but I suspect other variables in life may bite you before you catch it. Good luck (wo)man.

I guess I might not be following this so well but what are the many restrictions the poster has in place? From what I’m seeing he/she is willing to work weekdays or weekends locums work and willing to travel out of state as well. Doesn’t seem like that many restrictions to me...

 

[Sushirolls]

-doesn't want to work for a hospital
-doesn't want to open own out patient practice
-striking out with cold calling hospitals to work as independent contractor
-Okay for weekends, but nothing local available
-doesn't want telepsych, and even prospect of 8 hours of telepsych is dreaded
-Previously expressed desire to not bounce around with locums assignments
-But most recently expresses realization Locums is path to work and will lead to bursts of full time work, but again doesn't really want full time work.

I'm struggling to figure out what could work. 1 day a week community mental health?

I don't know, contact an urgent care, and sit around until they tell you they have a depressed/anxious person, then swoop in as a fee for service independent contractor consult? Won't make bank, but will keep skills up as OP as expressed desire to do.

 

[psychapp121]

Bro there are many options for jobs..I’m not sure what your issue is lol..facilities are desperate all over the country paying 200+ in many cases

 

[calvnandhobbs68]

-doesn't want to work for a hospital
-doesn't want to open own out patient practice
-striking out with cold calling hospitals to work as independent contractor
-Okay for weekends, but nothing local available
-doesn't want telepsych, and even prospect of 8 hours of telepsych is dreaded
-Previously expressed desire to not bounce around with locums assignments
-But most recently expresses realization Locums is path to work and will lead to bursts of full time work, but again doesn't really want full time work.

I'm struggling to figure out what could work. 1 day a week community mental health?

I don't know, contact an urgent care, and sit around until they tell you they have a depressed/anxious person, then swoop in as a fee for service independent contractor consult? Won't make bank, but will keep skills up as OP as expressed desire to do.

True true. Yeah struggling to do even 8 hours a week? That’s only 2 hours a day 4 days a week...you could literally just do that over breakfast every morning. OP you sure you actually like psychiatry?

 

[cookymonster]

True true. Yeah struggling to do even 8 hours a week? That’s only 2 hours a day 4 days a week...you could literally just do that over breakfast every morning. OP you sure you actually like psychiatry?

I just think I'd hate telehealth and don't want to commit that much time to it (and it was the 16 hour posted minimum I balked at. I would probably try 8 if it paid well). If I could find part-time local inpatient work that didn't pay me as if I were an APRN and didn't require me to answer to MBA's, I'd be golden. But honestly no I don't love psychiatry. I'd find it tolerable if our health care system and hospital administrators weren't so toxic. May change careers eventually, but that doesn't just happen overnight.

I called a couple of locums agencies this afternoon. I'm considering working weekends in a flyover state, then a low volume inpatient job may open up in another flyover state a few months later. It doesn't sound that great, but not sure what better options there are.

 

[Sushirolls]

Reflect if you may just be burnt out?

The toxic admin is a real cancerous problem spreading thru out health care and difficult to avoid, and depending on your locum company you may have a positive working experience that buffers from some of the hospital admin toxicity, or it may be an accelerant to their fire.

Another option, open your own micro practice, sublease an office some where and you see patients face to face for first evals, and then all future visits are telepsych after that. Build a small local telepsych to your liking. Solves the lower pay rate issue, and your hours, and allows flexibility if you ever decide to move in the future.

 

[cookymonster]

If I am burned out, I think toast can't be made into bread again. I know I was a lot more burned out before. The only thing I've found that has ever helped with burnout is working less. But I don't have enough productive things to do with my life or an alternate career, so I'd rather try to just keep my feet in the water for now.

 

[BiscoDisco]

How are some people talking about 10k a weekend jobs on other threads and others, like op, can't find better than 126/hr?

As a resident with w a family and a lot of debt, this if terrifying.

 

[wolfvgang22]

How are some people talking about 10k a weekend jobs on other threads and others, like op, can't find better than 126/hr?

As a resident with w a family and a lot of debt, this if terrifying.

Don't be terrified. OP just isn't interested in being a psychiatrist and is being very picky. I'm not judging it.

There are good gigs out there as well as bad ones. You'll be fine financially if you don't mind working 40 hours per week.

 

[Mass Effect]

How are some people talking about 10k a weekend jobs on other threads and others, like op, can't find better than 126/hr?

10K a weekend is in-house coverage. Doubt the OP would be interested in that. But if so, try the for-profit psych units. You have to round on 50 patients a day for the weekend, but those jobs are out there.

 

[cookymonster]

At the for-profit psych unit I contacted, even if I saw patients for 48 straight hours, I would have only made about $6k. Seems like a big key to raising profits is lowering labor costs.

Anyway, back to the reason I resurrected this thread - would anyone know a good resource for flexible low-volume telepsych if I wanted to look into that?

 

[psychapp121]

At the for-profit psych unit I contacted, even if I saw patients for 48 straight hours, I would have only made about $6k. Seems like a big key to raising profits is lowering labor costs.

Anyway, back to the reason I resurrected this thread - would anyone know a good resource for flexible low-volume telepsych if I wanted to look into that?

There’s no way you’re seeing patients 48 hours straight and only making 6k..there has to be some time to sleep I would imagine

 

[zolof]

At the for-profit psych unit I contacted, even if I saw patients for 48 straight hours, I would have only made about $6k. Seems like a big key to raising profits is lowering labor costs.

Anyway, back to the reason I resurrected this thread - would anyone know a good resource for flexible low-volume telepsych if I wanted to look into that?

Best way $ wise is your own private pt through telepsych as soneone here suggested. I do this, some them in person then all f.u telepsych very fast whenever I want. Also limited how many I see per month, very few...however if you want to just get paid straight there are multiple companies out there, just email them, it takes a a few weeks sometimes to get credentialed and they usually around 150 or so dep on situation.
I was like you could not do full time private/outpatient practice, now only do inpatient locums sans few private pts per month. . Loving it bc I have a gig that is one to two weeks a month. then two weeks off sometimes more. The only way it worked out is to do it 7/7 or 14/14, but I have Low volume of patients so I leave early.
listen I have worked in 4 diff states as locums and w2 and private practice. THere are a TON of jobs, but as Texas Ph said you have restricted yourself, which is fine. I did that too, but you have to be reasonable, as there is no perfect jobs, just better or more ideal ones. The only way to know is to take them start, and feel them out. You will know immediately if you want tolerate it or not

Or Just find a job around 24hr a week, you will end up working only half of that, I know bc I did that. Usually those paret time locum jobs are slow, lots of no shows, so you can read or even leave early, or sych ER coverage one or two days a week, in remote areas, you may only see 2 oe 3 patients or none.
I get the weekend thing, I do more weekends than not to avoid boring, nonsense, waste of time toxic administrative things. Those things are not only in psych, it happens in all specialties. But you have to find a way to avoid them.

 

[TerraceHouse]

Still in residency here so sort of naive to this but in what ways can admin cause that big of a headache? Is it by dictating clinical decision-making, pushing past the max # of pts agreed upon, pushing for more production? Genuinely would like to learn so thx in advance!

 

[psychapp121]

Still in residency here so sort of naive to this but in what ways can admin cause that big of a headache? Is it by dictating clinical decision-making, pushing past the max # of pts agreed upon, pushing for more production? Genuinely would like to learn so thx in advance!

yes to all of the above

 

[cookymonster]

Still in residency here so sort of naive to this but in what ways can admin cause that big of a headache? Is it by dictating clinical decision-making, pushing past the max # of pts agreed upon, pushing for more production? Genuinely would like to learn so thx in advance!

Increased call requirements, failing to recruit/hire as promised, general baiting and switching, demanding more time in meetings and doing clerical work but not wanting to pay you for it, medical directors getting paid for doing pretty much nothing, middle managers creating hoops for others to jump through to demonstrate their worth/value.
That is pretty much the tip of the iceberg.

 

[cookymonster]

Best way $ wise is your own private pt through telepsych as soneone here suggested. I do this, some them in person then all f.u telepsych very fast whenever I want. Also limited how many I see per month, very few...however if you want to just get paid straight there are multiple companies out there, just email them, it takes a a few weeks sometimes to get credentialed and they usually around 150 or so dep on situation.
I was like you could not do full time private/outpatient practice, now only do inpatient locums sans few private pts per month. . Loving it bc I have a gig that is one to two weeks a month. then two weeks off sometimes more. The only way it worked out is to do it 7/7 or 14/14, but I have Low volume of patients so I leave early.
listen I have worked in 4 diff states as locums and w2 and private practice. THere are a TON of jobs, but as Texas Ph said you have restricted yourself, which is fine. I did that too, but you have to be reasonable, as there is no perfect jobs, just better or more ideal ones. The only way to know is to take them start, and feel them out. You will know immediately if you want tolerate it or not

Or Just find a job around 24hr a week, you will end up working only half of that, I know bc I did that. Usually those paret time locum jobs are slow, lots of no shows, so you can read or even leave early, or sych ER coverage one or two days a week, in remote areas, you may only see 2 oe 3 patients or none.
I get the weekend thing, I do more weekends than not to avoid boring, nonsense, waste of time toxic administrative things. Those things are not only in psych, it happens in all specialties. But you have to find a way to avoid them.

I have had better luck talking with agencies, which I was hoping to avoid. I am surprised that the market is this inefficient and so reliant on middlemen, but it isn't that hard to find assignments that will let me work a block schedule. Now that I have the IMLC LOQ I am wary of applying for more licenses as I fear a job will just be given to a cheap local candidate before another license will go through. My first assignment may be at a state hospital, hopefully that would be a chill gig.