We have a private practice in major metro area. We have been trying to hire a C&A psychiatrist coming out of training. It has been extremely difficult with folks wanting a large guaranteed salary with benefits right out of training which we can't afford. We keep assuming it is because of the size of loans many people have or that the interest in private practice is very low. Over time, people would make much more than they would in hospital settings with working less hours and with higher quality of life. It is hard to convince folks to look at the big picture. Our income is significantly higher than any hospital or clinic will ever pay. Any thoughts? Any suggestions?
Private practice hiring
- Thread starter EHAMO
- Start date
My observation is most psychiatrists want to work in the outpatient setting so I'm not sure why you're having trouble.
Some questions which come to mind:
Are the applicants doubting you when you say how much income is realistically possible? Do you show applicants what you make? How long until they would be able to make as much as you...3 months...6 months...do I need to build a cash practice over several years to make that much? Do I have to buy into the practice? Do you have any weird stipulations like doctor paying a percentage of their billing revenue to you? Or is your office overhead really high?
If I'm employed I get paid the month after I start. I would definitely be concerned with the billing delay just starting out...what is the typical lag time between seeing patients and getting paid? Do you expect the new doctor to contribute to overhead costs before they've gotten any money in the bank? Are there moonlighting opportunities like weekend hospital coverage you know about the new doctor could get setup for a financial supplement while getting started out? If so, I would definitely have that information readily available.
- Joined
- Sep 1, 2008
- Messages
- 6,180
- Reaction score
- 5,616
How much are you offering and what dedicated patient times? Hours?
We are strictly outpatient- Monday to Friday; no weekends; 40 hours. We offered base salary of $150K plus performance bonus that on the conservative end would result in around 225K first year. Year 2 with bonus- around 265K; year 3 with bonus around 295K; year 4 with bonus around 315 then eligible for buy-in since our practice has a passive income stream due to employed therapists. Once partner then 500 K or more plus share of passive income.
- Joined
- Jun 6, 2016
- Messages
- 770
- Reaction score
- 906
I suspect many are looking at tuition repayment gigs which seriously increase the gross. Something to consider, in a tight market it is often necessary to offer the high end salary immediately which might serve to attract interest from seasoned psychiatrists also.
- Joined
- Aug 9, 2012
- Messages
- 2,380
- Reaction score
- 4,327
The problem with this is that major metro hospitals around me are offering much more fully guaranteed with sign-on, CME, paying for boards/licensing etc. all of which is very attractive to new grads with huge loans. I would never have hung it all on the line for a small practice with >200k in loans when a huge company can fully guarantee I pay off my loans in the matter of a couple years.
Edit: Significantly more for year 1, I agree with you that if things work out well your year 4 would be better than anything any big organization will offer.
Last edited:
- Joined
- May 20, 2010
- Messages
- 5,299
- Reaction score
- 6,914
Yeah I also suspect most people are looking at that 150k plus bonus “up to 225k” as only the 150 being guaranteed (which it is I’m assuming). As in, if worse comes to worse, they may only get that 150k, which is way worse than the going starting salary.
As others said, will also be hard to compete with larger organizations being able to pay off large loans or public service organizations where you’re able to participate in PSLF. Your best bet is probably to find someone who doesn’t have much in terms of loan burden. You’re right that you’re looking at a pretty sweet deal into Year 4 but most people may not be looking that far ahead when they’re trying to pay into 200-300k loans right now.
Problem is that if I compare that to the hospital employed positions where I live, they are around guaranteed $220k and can get to $315 by covering vacations and doing a handful of ED shifts. And then there is retirement matching, full benefits, CME, etc. So whilst competitive, that offer is hardly a slam dunk.
- Joined
- Sep 1, 2008
- Messages
- 6,180
- Reaction score
- 5,616
I’d recommend everyone passing on $150k base, including gen psych only. A child psych friend took such a job, but the clinic couldn’t fill the hours to reach the bonus. While it wasn’t the psychiatrist’s fault, the year ended with gross $150k due to contract bonus requirements not being achieved. I’ve warned everyone since to avoid such an arrangement.
As a private practice, we can't guarantee more than that, but at the same time we know that we have a huge referral volume that the bonus should be achieved easily unless the doctor is not competent or can't retain patients. I think the reality is that the size of loans for current graduates is so huge that many feel that they have no choice but to take the highest initial offer with secure employment. I had loans coming out but nothing like today's amounts. There is certainly some risk involved. I am glad I took the risk first day out of training but not everyone is comfortable doing that- which I also get. I also think that salaries in our area are lower than many other parts of the country so the top amounts many employed child psychs make is lower than most other places.
The one thing that many people forget is that after many years of employment, you have no equity in anything as you get older. The benefit of the private practice path is the potential to have a share of an appreciating growing asset.
- Joined
- May 6, 2012
- Messages
- 2,340
- Reaction score
- 2,987
I'm confused. If you expect the doctor to make the bonus, why can't you just offer more on the base and less on the bonus? For the first year at least.
When I consulted with some folks, most people recommended the need for an incentive to work towards versus a full guarantee.
That is something we have considered doing- increasing the guarantee for all 4 years but less upside.
- Joined
- Oct 15, 2017
- Messages
- 728
- Reaction score
- 2,124
A lot of current graduates are also counting on PSLF, and after doing a child fellowship they're halfway to having their loans forgiven (assuming the program stays as it is). If working for your practice won't count towards PSLF, that's a big deal to anyone with really high loan burden.
- Joined
- Jan 5, 2002
- Messages
- 2,909
- Reaction score
- 2,940
^^^ this
You might have to lose money, especially the first few years. In which case the partners would have to kick in some dividend to float this new guy (more likely gal). Plus, think about things like maternity leave, etc. It's very possible you won't make the money back for a period of time. BUT, that said, I think if you hire therapists on demand, even if you need to let this person go you'll build equity. But if what you are saying is true, then you CAN definitely afford 200k+ guaranteed first year. This is literally dropping partner K1 in from 500k to 475k (Assuming you have 2. You might have more?) I'm not gonna cry a river for you being cheap here.
You can structure the increased incentive as a loan for buy-in at the end of year 4 for a partnership track. I know a lot of anesthesia/pain and optho practices do this. Very unusual in psych, because practices very small. Assuming you hire a quality person, the loan will be converted to buy-in forgiveness.
I think there are other ways to make this more attractive for mommy track candidates. If you can calculate the per-hour revenue/dividend, you can probably have a tiered partner track and have part-time partners. You can google this--a lot of legal fields are moving in that direction. 500k a year, especially in a lower cost regions mean very little to women. They can't spend that much money. It's useless. It's not even a student loan issue. It's really a marketing issue: if you are advertising randomly for 150k base nobody will bite--you won't get quality candidates. I'd recommend reaching out directly to fellowships and have a longer discussion with actual high quality potential candidates you like in a fairly detailed way about the ins-and-outs. Typical grads are not really familiar with the business side, and you need to consider this as "mentorship". You have to run the math with the candidate, be like look, we are filling X at X rate with the typical billing rate of whatever for 99213+90833, and the no-show/billing reject rate is whatever, and $X is the excess value for each therapy hour, and expense is Y, so if you fill X slots as a partner you can expect Z. You SHOULD show your corp tax returns. Of course you don't want to just show your panties to any random candidate, hence you want to screen.
In my area, people who run insurance based groups typically hire per hour to start with a very high per hour rate (i.e. typically $250+ per hour), and test the waters with the candidate. Then once it looks more promising they'd discuss bigger commitment. That's also an option for you. It's much easier to get a candidate to fill per hour duties, and in the meanwhile, build up the base to hire more therapists, so if you lose money it won't be a lot and for very long. Facility based per hour jobs can't match this, and you end up getting a really good batch of candidates. Alternatively, some practice basically said that we'll pay you X per visit, but take care all the overhead, and then just let it run for a period of time. They supply the referral source, which is typically the bottleneck. VERY few outright offers a full time job--for exactly the same reason--it's next to impossible to estimate the actual productivity of a particular candidate, and partners don't want to cough up too much dividend to test the waters.
Last edited:
- Joined
- May 20, 2010
- Messages
- 5,299
- Reaction score
- 6,914
lol where did you get the idea that 500k means “very little to women” in low COL areas?
I’m pretty sure women can spend 500k just as easily as men can.
I’m pretty sure women can spend 500k just as easily as men can.
- Joined
- Mar 15, 2007
- Messages
- 1,822
- Reaction score
- 2,115
As someone who applied for a first attending position not too long ago, I think others are steering you in the right direction here.
Place yourself in the applicant's shoes. You are ~30, you have lived like a student up until now, your net worth is in the deep red, you have just started a family, and even as we speak you are shopping around for mortgage loans (so, doctor, do you have that letter listing your pay yet?). You don't need stratospheric pay, but you know the going rates and want something at or above it. You see a private practice job offering a salary of $150k (below even most academic jobs)... and that private practice promises you the moon and the stars (trust me, you'll make at least $225k the first year, in a few years you can clear half a million). And yet... that practice will not promise you anything except $150k per year. They are *sure* you will get more, but for some reason cannot guarantee it. They, who are reportedly clearing half a million per year each (before passive income!), want you to assume all of the risk if things don't work out the way they promise they will.
On the other hand, the hospital system down the road will promise $250k plus full benefits in black and white, just sign on the dotted line. You can do a few moonlighting shifts and increase that substantially if you want. If you decide to leave for private practice, you can do so whenever you want. They also have lots of great built-in support. $250k is plenty for you (and sounds amazing!), and while of course half a million would be nicer it isn't at all essential. You go with the sure thing and start living life.
With that said, I think that you can deliver what you are talking about to a new partner-track psychiatrist. I would bet that if you wait long enough, you will find someone who is willing to take a little risk and go with you, and it will probably pay of well for them. If you want someone sooner, the easiest way to accomplish that is to assume at least some of the risk yourself - guarantee a minimum bonus.
Place yourself in the applicant's shoes. You are ~30, you have lived like a student up until now, your net worth is in the deep red, you have just started a family, and even as we speak you are shopping around for mortgage loans (so, doctor, do you have that letter listing your pay yet?). You don't need stratospheric pay, but you know the going rates and want something at or above it. You see a private practice job offering a salary of $150k (below even most academic jobs)... and that private practice promises you the moon and the stars (trust me, you'll make at least $225k the first year, in a few years you can clear half a million). And yet... that practice will not promise you anything except $150k per year. They are *sure* you will get more, but for some reason cannot guarantee it. They, who are reportedly clearing half a million per year each (before passive income!), want you to assume all of the risk if things don't work out the way they promise they will.
On the other hand, the hospital system down the road will promise $250k plus full benefits in black and white, just sign on the dotted line. You can do a few moonlighting shifts and increase that substantially if you want. If you decide to leave for private practice, you can do so whenever you want. They also have lots of great built-in support. $250k is plenty for you (and sounds amazing!), and while of course half a million would be nicer it isn't at all essential. You go with the sure thing and start living life.
With that said, I think that you can deliver what you are talking about to a new partner-track psychiatrist. I would bet that if you wait long enough, you will find someone who is willing to take a little risk and go with you, and it will probably pay of well for them. If you want someone sooner, the easiest way to accomplish that is to assume at least some of the risk yourself - guarantee a minimum bonus.
- Joined
- Jan 5, 2002
- Messages
- 2,909
- Reaction score
- 2,940
I'm being a little glib, but the label "woman" here should be broadly interpreted to mean someone who takes on traditionally female gender roles in a household economic scenario, not a strictly biological sex. It would also include, for example, member of a male-male gay couple who has a child but would be interested in a reduced hour job, etc. Incidentally, this is associated with biological sex in this field as a lot in C&A as this field is female predominant in young graduates.
That might be the least useful stereotype I have ever read. Why not just say 'some people might not need 500k for a whole host of reasons'. There is no specific gay man subgroup that cares less about money.
- Joined
- Oct 14, 2016
- Messages
- 1,110
- Reaction score
- 2,969
Your low starting salary plus large teaser salary at the end of 5 years makes you sound like a churn and burn Ponzi scheme. It also sounds like pure greed and BS when partners making $500,000+ claim they can't afford to pay the going rate of $250,000-$275,000 guaranteed (plus sign on, production bonus, loan repayment, relo).
- Joined
- Dec 13, 2017
- Messages
- 43
- Reaction score
- 10
I have a question that may come across as naive but would you hire a PA or NP?
