Private Practice

[pmr4life]

Dear all,

I am writing in for a friend who wishes to remain anonymous. He is considering a private practice position providing therapy on a cash only basis. He is being offered a base hourly wage and will get 50% of billing/collections; thus, giving 50% back to the practice for overhead, etc... What % is a fair/usual take home in this situation?

Thank you for any advice from the private practioner crowd

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[Doctor Eliza]

Dear all,

I am writing in for a friend who wishes to remain anonymous. He is considering a private practice position providing therapy on a cash only basis. He is being offered a base hourly wage and will get 50% of billing/collections; thus, giving 50% back to the practice for overhead, etc... What % is a fair/usual take home in this situation?

Thank you for any advice from the private practioner crowd

How much will be collected in cash? I have a 50-50 split with insurance, so I end up with about $35/hr and I struggle to make ends meet. If you start with a higher amount the split means something different. Also, adding in the base rate (I don't get that with my arrangement) the split is actually more than 50-50. What percent is it adding in the base rate?

Dr. E

 

[Ollie123]

(Full Disclosure: Not in PP, nor planning to be at any point). I agree with Dr. E that the hourly is a critical piece here. $5/hour + 50% billables is very different from $50/hour + 50% billables. The latter would likely be an awesome deal (and sadly...better than most would do on their own), whereas the former isn't all that great.

Given cash-only can be tough in many areas of the country, it also depends how this person's schedule will look. If this practice doesn't have the referral base to fill this person's schedule or will be sending them "sliding scale" folks paying minimal fees instead of premium rates and the hourly is really all they can bank on - that changes things a great deal too.

Basically...not sure that is enough information for anyone to give a decent answer.

 

[pmr4life]

I apologize for the lack of information. Rate is $10/hr + 50% billables and the practice does not accept insurance. All out of pocket, cash only. The hourly charge rate is about $160/hour

 

[Doctor Eliza]

I apologize for the lack of information. Rate is $10/hr + 50% billables and the practice does not accept insurance. All out of pocket, cash only. The hourly charge rate is about $160/hour

So $90/session? Sounds pretty sweet unless...

1. They regularly offer a sliding scale
2. They can only give you a few clients per week

Dr. E

 

[PHD12]

So $90/session? Sounds pretty sweet unless...

1. They regularly offer a sliding scale
2. They can only give you a few clients per week

Dr. E

Good points. I know some licensed psychologists in a very prominent group practice and they still spent 6 months to 1 year building their caseload because they did not take insurance. After 1 year, most were still not full and these folks are truly experts in their area of specialization. In a saturated market, it is incredibly tough to have a continuous flow of 25-30 patients who are willing to pay $160 per session. Many patients who are paying out of pocket are only willing to stay short-term so you need constant referrals. $90 per session may seem like a lot of money, but can easily turn into 40K per year without benefits.

 

[PsyDr]

20k+ (1200*80)= 110k. Sounds pretty OK for a job where you are working almost half time.


Dr. E, you are being screwed. I think that $35 is unconscionable. But even so, at 40hrs/wk, you should be clearing 70k. The only reason people pay that little is because there is a market for it.

 

[Pragma]

Let's say you see 20 clients per week. The $10 per hour would net you 10K. By my calculations, you'll get 80K on top of that assuming you always collect $80 for each client.

Seems like pretty good money to me, assuming that you will have a consistent caseload. That is the biggest question - how many cash paying, consistent clients can they provide for you. The more you see, the more you make.

The split doesn't seem bad considering how much they are charging - but that practice owner must be banking. I wonder what the secret is to get so many cash paying referrals...

I've seen splits anywhere from 50% to 80% going to the provider.But circumstances vary with regard to who gets the referrals, volume, etc.

 

[Doctor Eliza]

20k+ (1200*80)= 110k. Sounds pretty OK for a job where you are working almost half time.


Dr. E, you are being screwed. I think that $35 is unconscionable. But even so, at 40hrs/wk, you should be clearing 70k. The only reason people pay that little is because there is a market for it.

40 hours per week is do-able. 40 clients per week is much harder to manage mentally and physically for most psychologists, self-included. (Many people forget this when calculating pp pay). The guy whose practice I work in has set the tone for the town and if you are working in someone else's PP, you make peanuts. The only way to do reasonably well here is to do solo practice. I plan to do so in the near future, but personal life is preventing it from being feasible right now. 2014 is going to be "my" year, though.

I repeat myself constantly on this topic to warn people considering grad school that PP isn't necessarily the sweet life. I went to a solid APA program and APA internship. It isn't just the Argosy folks who want to live in California that end up making this kind of money.

Also i talk about it to vent that I'm getting screwed.

Dr. E

 

[Sanman]

40 clients a week even on insurance can be hard to fill. The thing you have to realize is that it becomes really hard to book more than 25-30 clients per week unless you are willing to work Saturday. 4pm-10pm are fairly easily booked, but earlier than that is often hard to book as most people with money have jobs that they need to be at to pay you. Really, 6-10pm are the peak hours. So that is 20 clients easily booked working m-f. Book up the 4 and 5 m slots or the occasional day client and you are at 25-30 clients (remember, you need to eat). So, you will get $10 for all of those. Every practice has a cancellation policy. Mine is 24 hrs. Thus, if they cancel before that, there is no fee for you. ~5 clients/wk will cancel for some reason or another. Another 1-2 may no show and the chances they will pay the session no show fee is 50/50 usually (better if they have a credit card on file). Thus, those 25-30 clients will net you about $250- $300/wk. Add to that 20 clients wk that actually show and pay and you have $1600 + $300= $1900/wk. You may want to work more, but wealthy clients make money and like vacations. Thus, Christmas, new years, a few weeks in the summers, as well as spring break usually mean family vacations. So $1900 * 45 wks = $ 85,500. If you work some of those other weeks figure 50% cancellations, so $1100 for 4 of those weeks = $4400 + $85,500 = $89,900 (or 90k) before taxes Book only 25 clients per week and the total falls to about ~75k. Sounds like a fair income, but there are better positions out there as well. The practice is clearing $65-70k. Overhead for one person is less than that.

This is coming from someone that works part-time in cash only practice.