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MrWonderful

Hi all. I'm currently an M2 and psychiatry is in my top 2 specialty choices. I've always been very drawn to the idea of having my own practice, be it insurance or cash. I know I am a ways away from needing to worry about these things, but out of sheer curiosity (and probably wanting to motivate myself even more to achieve the practice I eventually want), I am very interested to hear about any business models/setups that you private practice docs use in psychiatry.

I understand the basics of a cash practice, but I'm trying to get a further understanding of the advantages vs disadvantages of cash vs insurance, and the implications these differences have for marketing, EMRs, appointment times, etc. I've already read up on the private practice sticky, so feel free to share as much as you feel comfortable sharing . Thanks!
 
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whopper

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IMHO you can't do a cash only practice for some time unless you're in a seriously under-served area or if you start doing other work and gradually build up the cash practice.
The way I'd do a cash practice in a non-underserved area is accept both insurance and cash-only and over time the cash-only will build up. Prune down the insurance, and raise over the time cash-only.

Advantages-don't have to deal with insurance companies.
Disadvantages: the patient is likely rich and that could present with several frustrations such as patients or their family members calling you wondering if eating all natural hummus will solve their mental health problems and them wanting you to talk about it for over an hour.

Yeah they could be paying you well but this type of practice can get effing annoying.
 

nitemagi

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This post should be part of the sticky on PP. They get posted about once a month on average.

Generally think of it like a small business, because that's what it is. You need to offer a service that fills a niche within the local market, and charge what the market can afford. Many people (including those NOT rich) will pay OOP because they've had it with Kaiser and the crappy service they get from docs that do take insurance. I get a lot of people who have those complaints. So offering more time or personal attention is one way of filling a niche, since others don't. I offer a variety of psychotherapies as well, which other psychiatrists also don't do (and non-physician therapists don't prescribe). I also take a stance of less is more with meds, rather than opting for polypharmacy as the default modality. People tend to like that, and are willing to pay more for someone conscientious in their care.

Now you will still have to deal with insurance (PAs, etc). But it's markedly less.

My benefit is I have very little overhead. Single office, nearly everything paperless (though I take paper notes), no office staff. It's fairly simplified.
 

nitemagi

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Disadvantages: the patient is likely rich and that could present with several frustrations such as patients or their family members calling you wondering if eating all natural hummus will solve their mental health problems and them wanting you to talk about it for over an hour.

Yeah they could be paying you well but this type of practice can get effing annoying.
I have almost no one like this in my entire practice. Sure people will call with questions and some are ridiculous, but it's no more than I had at the VA, county, or academic clinics I've worked at.

Set firm limits, but be respectful and most of the time they respond to that. Lack of response to that is more often indicative of something closer to a personality pathology, which is really independent of income.

That has been my experience, which is an n=1. It would be beneficial to get other data points from other people who actually have a cash practice...
 

TexasPhysician

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Taking insurances allows you to fill fast. If you are good at coding, you can make your practice very efficient. Your staff will be more important though to keep you on a tight schedule. Cash only keeps things simpler, but it takes more time to build. Plan to do your own marketing because insurances won't do it for you as cash only.
 
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Hi all. I'm currently an M2 and psychiatry is in my top 2 specialty choices. I've always been very drawn to the idea of having my own practice, be it insurance or cash. I know I am a ways away from needing to worry about these things, but out of sheer curiosity (and probably wanting to motivate myself even more to achieve the practice I eventually want), I am very interested to hear about any business models/setups that you private practice docs use in psychiatry.

I understand the basics of a cash practice, but I'm trying to get a further understanding of the advantages vs disadvantages of cash vs insurance, and the implications these differences have for marketing, EMRs, appointment times, etc. I've already read up on the private practice sticky, so feel free to share as much as you feel comfortable sharing . Thanks!
Another model would be to come partner with me in about 5 years when I start up my adolescent residential treatment/therapeutic school. I anticipate using a variety of sources of revenue including grants, insurances, and private pay. I am thinking about 5k a month per student we'll start with about 10 kids. I was clinical director of a similar program for a few years and there is a constantly growing market.
 

whopper

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I have almost no one like this in my entire practice.
Good for you. I have.

Another problem I've seen with expensive cash-only and this problem didn't happen to me is that some of these rich people are uber-entitled. E.g. if they don't get unrealistic results they could make life annoying, not just with their annoying phone calls, but if someone commits suicide the family could go after you with high priced lawyers.

The one guy I knew in this mess situation kept trying to make an emotional alliance with the father in case his high risk son who had several previous suicide attempts actually did commit suicide. While this might not sound so bad I felt it was unethical because he was doing it only for the sake of protecting himself from a lawsuit.

Set good boundaries and if you smell that these people will be draining the life out of you get out of it before you're sucked dry.

I had one cash only rich patient whose husband insisted on inserting himself quite inappropriately into every single interview and I told him this was not allowed unless his wife wanted it. His wife, during the only interview where I ever had her alone, told me that she never wanted him in any of the meetings but he was the guy that made the money, and if she didn't allow him in there he would stop paying for her treatment. I told her this was not ethical and she responded something to the effect of "are you going to see me for free?" Me-"no." Her: "well then how the heck am I supposed to get treatment from you then unless I let him in?"

I asked her to consider if it was worth staying with this guy. She told me she couldn't leave him because he gave her a wealthy lifestyle she would never be able to have on her own, and wouldn't even be able to afford healthcare. She had other medical problems and needed to have her medical bills payed.

The entire time he was in the meetings he was inappropriate, demanded I do medication changes that I refused, turned out he was suing her 3 prior psychiatrists, and every few days his lawyer called me up demanding I let her in on everything. Again the patient didn't want any of this, but the husband forced her sign papers that this was okay or he would cut off treatment.

I terminated the patient. It went on too long. The entire treatment was the husband trying to control me and her.

This is a type of problem you get with rich entitled patients that are cash-only. Be careful.
 

splik

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Set good boundaries and if you smell that these people will be draining the life out of you get out of it before you're sucked dry.
ah.. but the problem here is that the lawsuit will come when you try and dump the patient. its like having sex with patients. no one ever gets in trouble because they're having sex with their patients. it's when they stop having sex with their patients that the lawsuits come. once you're in, you're in. there is no escape
 
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nitemagi

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While I am sure there are entitled rich people, I can't tell you how many people of all economics have threatened lawsuits for silly reasons between myself and many colleagues.
This. While logic would dictate that richer ppl should be more narcissistic and difficult to deal with, in my [only] 3.5 years of cash only private practice, I have yet to see any connection. I've treated ppl with obscene amounts of money and I've treated the homeless. There doesn't seem any connection I've found between money and difficulty in treatment.
 
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heyjack70

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While I am sure there are entitled rich people, I can't tell you how many people of all economics have threatened lawsuits for silly reasons between myself and many colleagues.
But if you're broke you need a reasonable case or you will never get an attorney to represent you. If you're rich you can sue people just because you're mad and pay your attorney out of pocket.
 

Shikima

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ah.. but the problem here is that the lawsuit will come when you try and dump the patient. its like having sex with patients. no one ever gets in trouble because they're having sex with their patients. it's when they stop having sex with their patients that the lawsuits come. once you're in, you're in. there is no escape
No pun intended I take it?
 

whopper

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the problem here is that the lawsuit will come when you try and dump the patient.
In the specific case I mentioned I terminated the patient at an opportune moment. I knew at that point the husband would have nothing on me and had I continued I would just increase the risks of him trying to find something giving him more and more material.

While logic would dictate that richer ppl should be more narcissistic and difficult to deal with, in my [only] 3.5 years of cash only private practice, I have yet to see any connection.
It could be that you were extremely lucky and I was extremely unlikely. I have also worked in a private hospital designed to give top level treatment where money was not a barrier for patients and encountered the same problem there too. Things happened like getting called 3 AM by a nurse because a mother was irate that her son the patient wasn't allowed to use organic shampoo from Whole Foods.

Now of course the majority of the patients weren't terrible, in fact some of them were very well educated and it was a joy to treat them but these bad apples I'm talking about I noticed were enough to see as a pattern.
 
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I worked with well-off parents of adolescent for a couple of years. Definitely saw the ones who were used to getting what they wanted. Main difference between them and my current crop of medicaid patients is that they are better at it. They also tend to have better hygeine, higher IQs, social skills, and if they weren't attorneys they had a few on retainer.

One of my fondest memories of that time was when I had to call a pediatrician who was angry at the family therapist because a. He called her kid a narcissist and b. When she challenged the dx, he started defining what a narcissist was as if she didn't already know. When you are working with competent and successful people, you learn pretty quick that you better know what you are talking about and not just throw out jargon.
 
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sluox

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Great replies thus far. Thank you to all
Hi all. I'm currently an M2 and psychiatry is in my top 2 specialty choices. I've always been very drawn to the idea of having my own practice, be it insurance or cash. I know I am a ways away from needing to worry about these things, but out of sheer curiosity (and probably wanting to motivate myself even more to achieve the practice I eventually want), I am very interested to hear about any business models/setups that you private practice docs use in psychiatry.

I understand the basics of a cash practice, but I'm trying to get a further understanding of the advantages vs disadvantages of cash vs insurance, and the implications these differences have for marketing, EMRs, appointment times, etc. I've already read up on the private practice sticky, so feel free to share as much as you feel comfortable sharing . Thanks!
A couple of things to think about as a med student interested in this in doing high end cash: 1) to run a successful cash practice in a major market would significantly benefit from the "name" of the training program. Think about working very hard during med school and get into a "name brand" residency. 2) Consider specializing. Child/addiction are easier for this kind of arrangement. 3) You will likely need to live near a major wealthy metro or suburb, with a much higher cost of living. 4) pure cash practice takes 3-5 years to fill, even under the most optimal circumstances, but you can work on the side easily in psychiatry part time. 5) there's no guarantee that you'll be successful and many people try this and fail and fold and start a regular job like everyone else. This key is marketing, client acquisition, referral source management, and various other intangibles.

The flip side: the ceiling salary is kind of unreal for a solo practice. This field *can* net you orthopedic surgeon style salary (i.e. >400k, potentially reaching upper 6 digits) at a fraction of workload. I'd say about maybe 5% of psychiatrists in the country can do this--though in my immediate circle there are quite a few of them. The income can fluctuate a lot depending on the year and is almost always Schedule-C (i.e. hospitals will not pay a salary that high for a psychiatrist ever, unlike for orthopedic surgeons, except at a few specific high end inpatient sites). And there is no incentive for the physician to align with a hospital, because the work is very "boutiquey" and relies mostly on non-insurance reimbursement, and therefore has very little overhead and does not require economy of scale (see nitemagi's experience). And whoopers point about wealthy people being difficult: yes, they can be, but in general wealthy patients are much easier than SMI patients. This style of practice compares very favorably with the best lifestyle medical specialties. It's actually much more similar to other high end professional services targeting individual clients (i.e. financial service, legal service, and of course, certain medical specialties like derm) in terms of work, lifestyle, clients, compensation etc. If you want to make more money than that (i.e. >1 mil), you'd generally have to stop working in medicine and work for institutional rather than individual clients. You can think of this as a sub-sub-specialty within psychiatry and yes it is competitive. The gatekeeper here is not ERAS but "the market".

250-300k is fairly easy around most of the country. You can do this (and people do do this all the time) with a mix of insurance and cash after 1-5 years if you are willing to work reasonably hard (i.e. 40 hrs all said and done with non-billable hours). Running the practice is really not rocket science in this case. I think 350k is doable 100% insurance depending on payer mix and efficiency, etc. There is an issue with groups being acquired by hospitals, but this issue is not very acute in psychiatry because overhead is so low and psychiatrists tend to be fairly independent and don't care about $ or "advancement" that much. So small group/solo will remain very dominant in the community. The cool thing is that you are the driver of your own destiny in this kind of arrangement (i.e. cash vs. insurance, what insurance to take, what's your cancellation policy, what hours to work, how many hours, office site, when to terminate, who to hire vacation schedule etc you have NO boss to tell you ANY of that). The bad thing is you do need to worry about everything, including benefits retirement of you and your employees etc etc etc. so at the end of the day you may not make more money than an employed psychiatrist working for a regular chain hospital (hmm did someone say Kaiser?)

So yeah psychiatry = best kept secret in medicine. I think the biggest thing about psych that people under appreciate is the variety of practice pathway. You can work in community or academic or go fully private, and each with its set of pros and cons. The benefits package given by a hospital is often worth a lot, which is why W2 salaries are much lower. So if that's your thing there are plenty of jobs everywhere you go. On the other hand, it's a really good specialty (perhaps the best one?) for people who don't work well under a boss as an employee.

Having had experience with both, I'd say if I was doing 100% clinical I personally much prefer working on my own than for a hospital. The vacation scheduling thing itself is a deal breaker. Everyone I know who's in PP take whole months off (wtf?). Institutional work has certain things you don't get doing private: i.e. if you have the ambition to transform mental health care for a very large system, or do ground breaking research, or really like teaching etc., this cannot be done as a private practitioner, but that's a separate discussion.
 
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MrWonderful

A couple of things to think about as a med student interested in this in doing high end cash: 1) to run a successful cash practice in a major market would significantly benefit from the "name" of the training program. Think about working very hard during med school and get into a "name brand" residency. 2) Consider specializing. Child/addiction are easier for this kind of arrangement. 3) You will likely need to live near a major wealthy metro or suburb, with a much higher cost of living. 4) pure cash practice takes 3-5 years to fill, even under the most optimal circumstances, but you can work on the side easily in psychiatry part time. 5) there's no guarantee that you'll be successful and many people try this and fail and fold and start a regular job like everyone else. This key is marketing, client acquisition, referral source management, and various other intangibles.

The flip side: the ceiling salary is kind of unreal for a solo practice. This field *can* net you orthopedic surgeon style salary (i.e. >400k, potentially reaching upper 6 digits) at a fraction of workload. I'd say about maybe 5% of psychiatrists in the country can do this--though in my immediate circle there are quite a few of them. The income can fluctuate a lot depending on the year and is almost always Schedule-C (i.e. hospitals will not pay a salary that high for a psychiatrist ever, unlike for orthopedic surgeons, except at a few specific high end inpatient sites). And there is no incentive for the physician to align with a hospital, because the work is very "boutiquey" and relies mostly on non-insurance reimbursement, and therefore has very little overhead and does not require economy of scale (see nitemagi's experience). And whoopers point about wealthy people being difficult: yes, they can be, but in general wealthy patients are much easier than SMI patients. This style of practice compares very favorably with the best lifestyle medical specialties. It's actually much more similar to other high end professional services targeting individual clients (i.e. financial service, legal service, and of course, certain medical specialties like derm) in terms of work, lifestyle, clients, compensation etc. If you want to make more money than that (i.e. >1 mil), you'd generally have to stop working in medicine and work for institutional rather than individual clients. You can think of this as a sub-sub-specialty within psychiatry and yes it is competitive. The gatekeeper here is not ERAS but "the market".

250-300k is fairly easy around most of the country. You can do this (and people do do this all the time) with a mix of insurance and cash after 1-5 years if you are willing to work reasonably hard (i.e. 40 hrs all said and done with non-billable hours). Running the practice is really not rocket science in this case. I think 350k is doable 100% insurance depending on payer mix and efficiency, etc. There is an issue with groups being acquired by hospitals, but this issue is not very acute in psychiatry because overhead is so low and psychiatrists tend to be fairly independent and don't care about $ or "advancement" that much. So small group/solo will remain very dominant in the community. The cool thing is that you are the driver of your own destiny in this kind of arrangement. The bad thing is you do need to worry about everything, including benefits retirement etc etc etc. so at the end of the day you may not make more money than an employed psychiatrist working for a regular chain hospital (hmm did someone say Kaiser?)

So yeah psychiatry = best kept secret in medicine. I think the biggest thing about psych that people under appreciate is the variety of practice pathway. You can work in community or academic or go fully private, and each with its set of pros and cons. The benefits package given by a hospital is often worth a lot, which is why W2 salaries are much lower. So if that's your thing there are plenty of jobs everywhere you go. On the other hand, it's a really good specialty (perhaps the best one?) for people who don't work well under a boss as an employee.
Wow I love it. Thank you
 

Shikima

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Another idea, partner with a psychologist who can supervise a bunch of young LPC types. Pay them 50k while they generate at least double, you handle the meds, and share burden with the psychologist on the oversight of the midlevels.
I like how you think!
 

whopper

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I did the same concerning the psychologist. I completely agree but make sure it's a good psychologist.
 
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TexasPhysician

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Another idea, partner with a psychologist who can supervise a bunch of young LPC types. Pay them 50k while they generate at least double, you handle the meds, and share burden with the psychologist on the oversight of the midlevels.
But when the psychologist leaves for another gig, you are left with the charts and a referral base you can't handle until you hire another. I guess it depends on how easily u can replace good psychologists.
 
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But when the psychologist leaves for another gig, you are left with the charts and a referral base you can't handle until you hire another. I guess it depends on how easily u can replace good psychologists.
It's almost as hard as replacing a good psychiatrist! That's why you would have to have a pretty solid partnership with similar goals. When I have seen it work, it is a pretty good combination. One group I saw was two psychiatrists and two psychologists. Of course, I think one of the pairs were also marriage partners. :D
 

A Deep Breath

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sluox said:
Everyone I know who's in PP take whole months off (wtf?).
How does this work? Somehow I got it into my head that PP would only allow for brief vacations.
 
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MrWonderful

It's almost as hard as replacing a good psychiatrist! That's why you would have to have a pretty solid partnership with similar goals. When I have seen it work, it is a pretty good combination. One group I saw was two psychiatrists and two psychologists. Of course, I think one of the pairs were also marriage partners. :D
So do the psychologists do the majority of therapy and the psychiatrists do mostly med management?

Slightly related -- and obviously this will be variable -- what is the average salary that both a PhD/PsyD psychologist & an LPC masters level therapist would command within the outpatient setting? The reason I ask is I like the stratification idea with getting a solid infrastructure of therapists/counselors. But it seems the salary of the psychologist is much higher so I'm curious how much revenue they can bring in?
 
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So do the psychologists do the majority of therapy and the psychiatrists do mostly med management?

Slightly related -- and obviously this will be variable -- what is the average salary that both a PhD/PsyD psychologist & an LPC masters level therapist would command within the outpatient setting? The reason I ask is I like the stratification idea with getting a solid infrastructure of therapists/counselors. But it seems the salary of the psychologist is much higher so I'm curious how much revenue they can bring in?
As an individual therapist billing insurances, not much more than a midlevel, although assesements can help push it higher. Providing training and supervision to the new crop of therapists is where the real money would be. With the proliferation of midlevels who are finding it hard to get good psychotherapy training and supervision in the public settings where they are working now and being paid peanuts, I see a real need for this model and potential cash upside.
 

sluox

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How does this work? Somehow I got it into my head that PP would only allow for brief vacations.
You just schedule your patients to skip a month of therapy in the summer. And med management cases you only see once a month any way. Someone can be on phone coverage for you.
 
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sluox

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So do the psychologists do the majority of therapy and the psychiatrists do mostly med management?

Slightly related -- and obviously this will be variable -- what is the average salary that both a PhD/PsyD psychologist & an LPC masters level therapist would command within the outpatient setting? The reason I ask is I like the stratification idea with getting a solid infrastructure of therapists/counselors. But it seems the salary of the psychologist is much higher so I'm curious how much revenue they can bring in?
In theory, you can try to set up a practice like that where you do meds for a bunch of therapists, and take a cut off their revenue. In practice, this is uncommon because psychologists, like psychiatrists, usually prefer a solo/small group situation and are not likely willing to be "purchased" as an employee of an MD-run practice. More commonly, the psychiatrist simply collaborate with external therapists to build up a caseload. Referrals from psychiatrists are usually not a big source of revenue for PhDs and LCSWs, mostly because they are targeting different sectors of the market. Pure cash PhDs/PsyDs are somewhat uncommon, whereas pure cash MD is >50% in private practice.

As an MD, there are several styles of practice you can set up:
1) Institutional (VA, other govt, academic, non-profit): you'll be doing mostly med management, with the occasional therapy. Fixed lower salary (but usually >200k, can be very good depending on location) usually very good benefits. somewhat fixed inflexible schedule but low salary variation, no startup cost (in fact sometimes negative startup cost with signon bonus, moving and loan repayment, etc)

2) Community insurance based small group/solo PP: mostly med management, ++ overhead (biller, secretary, allied providers), high volume, viable throughout the country. Some therapy patients if you want depending on the insurance mix. If busy can be very profitable. no benefits, flexible schedule. lots of quality improvement issues/business operational work, once set up fairly low salary variation, high start-up cost =====> this is not uncommon from what I've heard around APA, etc., especially in the Midwest/low density areas. Some hardworking community psychs can command high salaries doing this. And yes this is where therapy can be farmed out to PhDs and LCSWs within the same practice, but fairly uncommon. What's more common is a single specialty MD group practice that works with a large managed care organization that also coordinates with a PhD group. This is essentially the model for most community PP of other medical specialties (i.e. IM, OB/GYN, peds, etc.). But MCO penetration in psych is much much lower compared to other specialties because of lower overhead.

3) Solo/small group therapy focus, insurance or cash based: viable throughout the country even in less affluent parts of the country. MD who prefers doing a lot of therapy, but is willing to either 1) take a few insurances or 2) charge a lower fee. -- overhead, - volume. Mostly combined med management plus therapy. expected salary is <200k. no benefits. good autonomy and geographical and scheduling flexibility, high salary variation, low start-up cost. This is also fairly common, especially with older psychiatrists, or psychiatrists who want to work part time.

4) Solo/small group high end cash practice: only doable in a few locations, high per session cost (generally >$300), very few patients (usually a full time practice <100 patients, sometimes <50). Majority combined therapy med. Most revenue from therapy. very low overhead, high salary, flexible scheduling, high start-up cost (counting waiting time opportunity cost), but ++ entry barrier, ++ salary variation

5) Others, things like locum, ER work, etc. Some MDs never do anything with continuity.
As you can see, this idea that MDs can't do therapy is mostly a myth perpetuated by institutional players who want to make you take a job doing mostly med management. You have a lot of choice as an MD in terms of what mix of work you can do in PP.
 
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In theory, you can try to set up a practice like that where you do meds for a bunch of therapists, and take a cut off their revenue. In practice, this is uncommon because psychologists, like psychiatrists, usually prefer a solo/small group situation and are not likely willing to be "purchased" as an employee of an MD-run practice. More commonly, the psychiatrist simply collaborate with external therapists to build up a caseload. Referrals from psychiatrists are usually not a big source of revenue for PhDs and LCSWs, mostly because they are targeting different sectors of the market. Pure cash PhDs/PsyDs are somewhat uncommon, whereas pure cash MD is >50% in private practice.
Exactly, that's why I would suggest a partnership model. It isn't done very much, but I could see how it might be mutually beneficial and could lead to improved coordination of care to boot.
 
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MrWonderful

So how would one go about accepting both insurance and cash. In other words, if the goal is to develop the cash side, while pruning the insurance, how would one market/incentivize patients to pay OOP for "premium" service? I imagine this is complicated, no?
 
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PistolPete

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ah.. but the problem here is that the lawsuit will come when you try and dump the patient. its like having sex with patients. no one ever gets in trouble because they're having sex with their patients. it's when they stop having sex with their patients that the lawsuits come. once you're in, you're in. there is no escape
Yea, I was wondering about this too. Can you really just terminate a patient for any reason that you like, as long as you go through the proper procedures (give enough referrals, enough meds, etc)??
 

TexasPhysician

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Yea, I was wondering about this too. Can you really just terminate a patient for any reason that you like, as long as you go through the proper procedures (give enough referrals, enough meds, etc)??
In your private practice, sure. If you work for an institution, they will likely want a good reason.
 
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So how would one go about accepting both insurance and cash. In other words, if the goal is to develop the cash side, while pruning the insurance, how would one market/incentivize patients to pay OOP for "premium" service? I imagine this is complicated, no?
Cash only is somewhat of a misnomer. It's about not being on the insurance panels. I imagine you could just start ending or not renewing with one insurance panel at a time and patients can still submit the bills to their insurance for out of network coverage. I'm definitely no expert on this and the market is always changing and the insurance companies and government like to keep it confusing and not working for either patient or provider.
 
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MrWonderful

So when you guys schedule appointments, what is the typical time slot that you are comfortable with for med checks + some degree of therapy?
 
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This post should be part of the sticky on PP. They get posted about once a month on average.

Generally think of it like a small business, because that's what it is. You need to offer a service that fills a niche within the local market, and charge what the market can afford. Many people (including those NOT rich) will pay OOP because they've had it with Kaiser and the crappy service they get from docs that do take insurance. I get a lot of people who have those complaints. So offering more time or personal attention is one way of filling a niche, since others don't. I offer a variety of psychotherapies as well, which other psychiatrists also don't do (and non-physician therapists don't prescribe). I also take a stance of less is more with meds, rather than opting for polypharmacy as the default modality. People tend to like that, and are willing to pay more for someone conscientious in their care.

Now you will still have to deal with insurance (PAs, etc). But it's markedly less.

My benefit is I have very little overhead. Single office, nearly everything paperless (though I take paper notes), no office staff. It's fairly simplified.
I agree.
When you said things are paperless except for your notes, what are you referring to?
 
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MrWonderful

I agree.
When you said things are paperless except for your notes, what are you referring to?
I believe nitemagi meant that everything is paperless however that comes at the cost of having to manually write notes
 

nitemagi

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I agree.
When you said things are paperless except for your notes, what are you referring to?
I hand write notes during session, then later type them up.
 

TikiTorches

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One of my fondest memories of that time was when I had to call a pediatrician who was angry at the family therapist because a. He called her kid a narcissist and b. When she challenged the dx, he started defining what a narcissist was as if she didn't already know. When you are working with competent and successful people, you learn pretty quick that you better know what you are talking about and not just throw out jargon.
I hope therapists wouldn't do that anyway...
 
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TikiTorches

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:clap:
\

Set good boundaries and if you smell that these people will be draining the life out of you get out of it before you're sucked dry.

I had one cash only rich patient whose husband insisted on inserting himself quite inappropriately into every single interview and I told him this was not allowed unless his wife wanted it. His wife, during the only interview where I ever had her alone, told me that she never wanted him in any of the meetings but he was the guy that made the money, and if she didn't allow him in there he would stop paying for her treatment. I told her this was not ethical and she responded something to the effect of "are you going to see me for free?" Me-"no." Her: "well then how the heck am I supposed to get treatment from you then unless I let him in?"

I asked her to consider if it was worth staying with this guy. She told me she couldn't leave him because he gave her a wealthy lifestyle she would never be able to have on her own, and wouldn't even be able to afford healthcare. She had other medical problems and needed to have her medical bills payed.

The entire time he was in the meetings he was inappropriate, demanded I do medication changes that I refused, turned out he was suing her 3 prior psychiatrists, and every few days his lawyer called me up demanding I let her in on everything. Again the patient didn't want any of this, but the husband forced her sign papers that this was okay or he would cut off treatment.

I terminated the patient. It went on too long. The entire treatment was the husband trying to control me and her.

This is a type of problem you get with rich entitled patients that are cash-only. Be careful.
 
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I hope therapists wouldn't do that anyway...
I have met one or two bad therapists in my day and even a couple of crummy psychiatrists. Seriously though, the current crop of MA level counselors is getting pretty weak with lower and lower standards and training in actual psychotherapy. As psychologists, we are concerned with the for-profit schools that are putting out too many grads with lesser standards, but it is nothing compared to how many counselors are being cranked out and how easynit is for them to get licensed to practice independently.
 

mgdsh

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Plenty of cash or mostly cash practices will accept 1-2 insurances and stay that way.
 

Therapist4Chnge

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1. As a private practice you will succeed/fail on your business and management skills, not your clinical skills. Read books about practice management, maybe attend a workshop through a relevant psych org, etc.

2. In the beginning you'll probably want to take some insurance to build up a caseload, and then you can mix in cash pay patients as you become more known in your community. Being that psychiatry is needed in the vast majority of places, you should be able to negotiate favorable insurance rates, BUT you'll want to limit who you take based not only on reimbursement but also on how many hoops you need to jump through to get paid.

I am only on a handful of insurance panels, as the rest either paid too little and/or wasted too much of my time that the associated frustration of my staff/me was not worth any amount of promised $ from them. Ask around and see which insurance plans to avoid in your community.

3. Hiring employees can be a nice way to build up a passive income stream (i.e. $ being made not directly connected to you working), but it can also be a headache, so you'll want to have a decent handle on your own practice before you introduce more people into it.

4. Make sure to have a solid lawyer, accountant, and hopefully a colleague or two who are also in private practice you can talk to about day to day stuff that invariably pops up in your first few years of practice.

5. You'll need to figure out how you want to navigate filling out paperwork, making phone calls, submit billing, scheduling, etc. It's helpful to track the amount of billable v. unbillable time you spend, as it will inform the value of hiring an admin to assist. That stuff drives me nuts, so I'll always go with an admin, but others prefer to handle things themselves. Lastly, don't be stingy about what you pay a GOOD admin, as they will save you a ton of headaches. I'm not sure the going rate these days (ours are salaried), but if you go that route and find a good match, treat him/her like gold and hope they stick around for the long-term.
 

Osteoth

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A couple of things to think about as a med student interested in this in doing high end cash: 1) to run a successful cash practice in a major market would significantly benefit from the "name" of the training program. Think about working very hard during med school and get into a "name brand" residency. 2) Consider specializing. Child/addiction are easier for this kind of arrangement. 3) You will likely need to live near a major wealthy metro or suburb, with a much higher cost of living. 4) pure cash practice takes 3-5 years to fill, even under the most optimal circumstances, but you can work on the side easily in psychiatry part time. 5) there's no guarantee that you'll be successful and many people try this and fail and fold and start a regular job like everyone else. This key is marketing, client acquisition, referral source management, and various other intangibles.

The flip side: the ceiling salary is kind of unreal for a solo practice. This field *can* net you orthopedic surgeon style salary (i.e. >400k, potentially reaching upper 6 digits) at a fraction of workload. I'd say about maybe 5% of psychiatrists in the country can do this--though in my immediate circle there are quite a few of them. The income can fluctuate a lot depending on the year and is almost always Schedule-C (i.e. hospitals will not pay a salary that high for a psychiatrist ever, unlike for orthopedic surgeons, except at a few specific high end inpatient sites). And there is no incentive for the physician to align with a hospital, because the work is very "boutiquey" and relies mostly on non-insurance reimbursement, and therefore has very little overhead and does not require economy of scale (see nitemagi's experience). And whoopers point about wealthy people being difficult: yes, they can be, but in general wealthy patients are much easier than SMI patients. This style of practice compares very favorably with the best lifestyle medical specialties. It's actually much more similar to other high end professional services targeting individual clients (i.e. financial service, legal service, and of course, certain medical specialties like derm) in terms of work, lifestyle, clients, compensation etc. If you want to make more money than that (i.e. >1 mil), you'd generally have to stop working in medicine and work for institutional rather than individual clients. You can think of this as a sub-sub-specialty within psychiatry and yes it is competitive. The gatekeeper here is not ERAS but "the market".

250-300k is fairly easy around most of the country. You can do this (and people do do this all the time) with a mix of insurance and cash after 1-5 years if you are willing to work reasonably hard (i.e. 40 hrs all said and done with non-billable hours). Running the practice is really not rocket science in this case. I think 350k is doable 100% insurance depending on payer mix and efficiency, etc. There is an issue with groups being acquired by hospitals, but this issue is not very acute in psychiatry because overhead is so low and psychiatrists tend to be fairly independent and don't care about $ or "advancement" that much. So small group/solo will remain very dominant in the community. The cool thing is that you are the driver of your own destiny in this kind of arrangement (i.e. cash vs. insurance, what insurance to take, what's your cancellation policy, what hours to work, how many hours, office site, when to terminate, who to hire vacation schedule etc you have NO boss to tell you ANY of that). The bad thing is you do need to worry about everything, including benefits retirement of you and your employees etc etc etc. so at the end of the day you may not make more money than an employed psychiatrist working for a regular chain hospital (hmm did someone say Kaiser?)

So yeah psychiatry = best kept secret in medicine. I think the biggest thing about psych that people under appreciate is the variety of practice pathway. You can work in community or academic or go fully private, and each with its set of pros and cons. The benefits package given by a hospital is often worth a lot, which is why W2 salaries are much lower. So if that's your thing there are plenty of jobs everywhere you go. On the other hand, it's a really good specialty (perhaps the best one?) for people who don't work well under a boss as an employee.

Having had experience with both, I'd say if I was doing 100% clinical I personally much prefer working on my own than for a hospital. The vacation scheduling thing itself is a deal breaker. Everyone I know who's in PP take whole months off (wtf?). Institutional work has certain things you don't get doing private: i.e. if you have the ambition to transform mental health care for a very large system, or do ground breaking research, or really like teaching etc., this cannot be done as a private practitioner, but that's a separate discussion.
So from those you know who have successfully established a high-end cash practice, any commonalities you have seen in their practices? Referral base or client acquisition being the obvious significant variables.
 

Jules A

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Another model would be to come partner with me in about 5 years when I start up my adolescent residential treatment/therapeutic school. I anticipate using a variety of sources of revenue including grants, insurances, and private pay. I am thinking about 5k a month per student we'll start with about 10 kids. I was clinical director of a similar program for a few years and there is a constantly growing market.
Sorry OP for the hijack but smalltownpsych are you still pursuing this project? RTC adolescents are my all time favorite but unfortunately the trend I'm noticing, possibly because deinstitutionalization was so successful for the adult population snort, is that most RTCs are closing. They cite poor outcomes with this treatment modality although I'm unclear just how many success stories anyone could expect from a population very often presenting with inutero exposure and years of abuse, neglect and trauma. It seems to me the powers that be have decided these children are better managed in their dysfunctional, unsafe homes until they commit a significant crime then off to juvenile jail for a month or two with no requirement to participate in or complete any type of program with no after care set up upon release. :(
 
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sluox

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So from those you know who have successfully established a high-end cash practice, any commonalities you have seen in their practices? Referral base or client acquisition being the obvious significant variables.
My post two years ago is a fairly comprehensive review--little has changed, except bending in the favor of MDs. "In the best circumstances", it takes a lot less than 3-5 years to fill cash practices now. I may sound like a weird traditionalist, but IMHO the easiest way (as you say "the common variable") to get a high-end cash practice is to do a high end name brand residency, which means treat this pathway as basically the same as derm (best grades, best scores, best sub-I letters, best research), and if you can't do a name brand residency, do a name brand fellowship (those are super non-competitive). The cat is out of the bag, everyone at top (and for that matter, non-top) residencies in wealthy areas want to do at least some cash practice, and academic faculty practices started to do this not taking insurance thing (smh). So, if you just go to one of those places where nobody takes insurance (including faculty), you'll just learn by osmosis. And this is in an environment of Kaiser paying 300k mailing ads for jobs at bad locations only write down numbers if > 350k. Nevertheless, there are still plenty of people working at state facilities for 180k for a variety of reasons. SDN comments are essentially useless outside of very gross generalities.

Also, I'm not the first one to say these things, but be VERY careful with picking jobs based on perceived ceiling salary/lifestyle. This can change very quickly (see rads, gas) because of big pictures issues (i.e. if the insurance starts to pay a higher premium for facilities driven "integrated care" services, like in the HMO acquisition spree in the 90s for PMD). Sure psych is great right now, but this can ALL change. Please make sure you actually like psych and diversify what you might be happy with other than high end cash. High end cash is not something everyone even from top residencies can do and you are for sure taking a risk if you go into psych thinking you're gonna do high end cash. Please don't be stupid.
 
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Shikima

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A side discussion for my knowledge; how are psychiatrists collaborating with NPs able to make 100-150k/NP extra cash for them on top of overhead? What does this practice model look like? Are physicians signing their notes too to ensure they're getting 100% of the reimbursement rate?
 

sluox

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What does this sentence mean? Thanks...
Sorry typing fast. Kaiser is paying 300k for 1.0 FTE. Recruiters don't put down numbers on their mailing ads for jobs UNLESS it's at least 350k. This means anything less than 350k is usually perceived as a minus in a job posting.
 
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