Private Practice

[SomeDoc]

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So I was looking up general CPT code fee schedules, and once I crunched the numbers, was surprised that a moderately paced practice could generate a nice income (public forum so no numbers please). There are obvious pros and cons to going solo, but given the earning potential of private practice, I wonder why more psychiatrists aren't going the solo route, and are instead choosing to work for groups/hospitals who skim a good percentage of the profits of what the physician generates.

 

[PistolPete]

Yea I realized this myself also. Coding for 99212+90833 add-on for therapy, or a straight up 99213, with a smaller percentage of 99214 and 99215 can generate quite a nice income. Of course, it's less nice once you factor in no-shows, Medicare not paying for a certain percentage of billings for whatever reason or feeling like they should pay you 99213 rates for 99214 work. Add in having to pay for a secretary/biller, office space, etc, and having to advertise/look for patients by networking, that last bit is probably what drives many psychiatrists to the VA, state hospital, Kaiser, or county clinics. At least that's my guess. Seems like a large chunk of docs are not business oriented, or don't want to be.

 

[SomeDoc]

Yea I realized this myself also. Coding for 99212+90833 add-on for therapy, or a straight up 99213, with a smaller percentage of 99214 and 99215 can generate quite a nice income. Of course, it's less nice once you factor in no-shows, Medicare not paying for a certain percentage of billings for whatever reason or feeling like they should pay you 99213 rates for 99214 work. Add in having to pay for a secretary/biller, office space, etc, and having to advertise/look for patients by networking, that last bit is probably what drives many psychiatrists to the VA, state hospital, Kaiser, or county clinics. At least that's my guess. Seems like a large chunk of docs are not business oriented, or don't want to be.

The thing is, in a profit sharing practice, the psychiatrist still takes a hit with no-shows, difference being that the group still keeps a good percentage of the whatever the revenue is brought in by the psychiatrist. Why someone would want to give away part of their earnings to someone else is beyond me. Really, the psychiatrist is literally paying out of their pocket from earnings potential for issues of convenience- ex managing overhead, administrative issues. To me, these challenges sound like they would be fun to manage, though different strokes...

 

[whopper]

Just my theory. Docs are more savant that entrepreneur. The type of person that goes into business is not turned on by the sciences, just like most people who go to medical school and are more biochem oriented aren't into the behavioral sciences.

Another issue with private practice is the business field changes all the time. You could have a successful practice and then 5 years down the road get blown out of the water due to some type of change in insurance. Several docs just don't want to deal with that.

I did private practice and got out of it despite making less money in academia. Why did I do it? I did not find anyone in the practice my intellectual equal or superior, and several of the other clinicians were so bad it was to the point where I wanted to intellectually slap them around.

As bad as that sounds on my part, if you worked with some of them I think you'd agree. One therapist kept no notes whatsoever. She freaking had a client for about 5 years and had NO NOTES. She'd refer to me patients and I'd ask her why and she'd give me answers like "why not?" (AND NOTHING ELSE). Then the patients would ask me why they were referred to me and I'd have to tell them point-blank I didn't know that just ticked them off.

This was all happening under the same practice, that's why I couldn't just blow this therapist off. I told the management I didn't want her patients EVER but they didn't want a civil war. For that and several other reasons I just decided to leave.

Working in academia surrounded me with people I found to be intellectual superiors that pushed me to be better as a doctor. I found that stimulation far more rewarding.

 

[OldPsychDoc]

...Add in having to pay for a secretary/biller, office space, etc, and having to advertise/look for patients by networking, that last bit is probably what drives many psychiatrists to the VA, state hospital, Kaiser, or county clinics. At least that's my guess. Seems like a large chunk of docs are not business oriented, or don't want to be.

This...

Just my theory. Docs are more savant that entrepreneur. ....

...and this.

And also, it's not always "all about the money" for everyone.

 

[SomeDoc]

Just my theory. Docs are more savant that entrepreneur. The type of person that goes into business is not turned on by the sciences, just like most people who go to medical school and are more biochem oriented aren't into the behavioral sciences.

Another issue with private practice is the business field changes all the time. You could have a successful practice and then 5 years down the road get blown out of the water due to some type of change in insurance. Several docs just don't want to deal with that.

I did private practice and got out of it despite making less money in academia. Why did I do it? I did not find anyone in the practice my intellectual equal or superior, and several of the other clinicians were so bad it was to the point where I wanted to intellectually slap them around.

As bad as that sounds on my part, if you worked with some of them I think you'd agree. One therapist kept no notes whatsoever. She freaking had a client for about 5 years and had NO NOTES. She'd refer to me patients and I'd ask her why and she'd give me answers like "why not?" (AND NOTHING ELSE). Then the patients would ask me why they were referred to me and I'd have to tell them point-blank I didn't know that just ticked them off.

This was all happening under the same practice, that's why I couldn't just blow this therapist off. I told the management I didn't want her patients EVER but they didn't want a civil war. For that and several other reasons I just decided to leave.

Working in academia surrounded me with people I found to be intellectual superiors that pushed me to be better as a doctor. I found that stimulation far more rewarding.

Some of the reasons to stay in academics for sure, though I was unpleasantly surprised to hear the ballpark figures some of our attendings were earning. But no one is asking them to stay. Sure, there are subpar clinicians outside of academic circles, but this is certainly not the rule, and there are exceptions... it's just that in these clinicians are much harder to find.

 

[2tall]

In addition to what's stated above, very few residents and fellows train in private practice models. The structure is graduate medical education strongly influences career choices...

 

[whopper]

I'd be willing to go into private practice if I found a team of excellent partners. I was offered to go into a non-academic institution that was run by a former PD, nationally renown, but now the #2 doctor in Cincinnati's largest healthcare system. It wasn't PP but it offered a lot of the same perks: much higher pay, and the guy did form a team of excellent doctors, all attracted to be into his A-Team because we all knew the other doctor was a top-notch clinician. He amassed this team over years of figuring out who was good, who wasn't, and maintaining good connections. He also was giving us much more money than a usual attending salary because he knew we'd produce better numbers.

A reason I didn't take up his offer was because my wife got a professor's position in St. Louis, so now I'm in that city (and starting my first day at SLU tomorrow). Had I stayed in Cincinnati I would've been between a rock and a hard place figuring out to stay in U of Cincinnati (where my forensic mentors reside) vs joining the clinical A-Team.

 

[nitemagi]

I'm in private practice, and keep an academic affiliation on the teaching faculty. I find it to be a fair balance.

There is no practice setup without headaches. Academia has problems, as does the VA, private practice with insurance, Kaiser. There's a balance of freedom and risk with less bureaucracy vs. stability but more bureaucracy and less pay.

Most docs have honestly gone straight through school, have a lot of debt, and just want to do a job. They're simultaneously risk averse, as a good portion of our job is about weighing risks/benefits. Some decide the risks of PP aren't worth the benefits.

Like all of medicine, though, we generalize from our experience, and so that weighing of risks and benefits is often skewed by the limited experiences of residents.

 

[PistolPete]

Nitemagi, what do you think determines whether a certain resident is more or less risk-averse than another, and therefore less- or more-likely to go into PP? I have an interest in going into PP, but it's also been pointed out to me on multiple occasions that I'm fairly risk-averse.

 

[nitemagi]

Nitemagi, what do you think determines whether a certain resident is more or less risk-averse than another, and therefore less- or more-likely to go into PP? I have an interest in going into PP, but it's also been pointed out to me on multiple occasions that I'm fairly risk-averse.

That's a complex question. I could point you towards behavioral economics, but let's just say in this case which do you fear more -- unemployment or long-term commitment?

I'm being a little tongue-in-cheek.

In all seriousness, PP is basically a small business. Some businesses go under. Do you care enough about the benefits of your business, such as higher income, more time with patients (depending on your PP model) and less oversight to risk lack of automatic retirement benefits and vacation time?

We all have emotional associations to specific risks, which we pay a little more attention to.

If you're a psychiatrist who believes in doing psychotherapy, there are few non-PP opportunities for that.

 

[Bartelby]

I am a PGY3 seriously considering PP. I will list my pros/cons below, both to give some insight into my own PP concerns and see what those with more experience have to say about it:

PP Cons:
-Lack of experience with the model: I have been in academia pretty much forever, I know it well (and know I enjoy it). That doesn't hold for PP.
-I have heard insurance is a hassle. If I get paneled on 1-2 insurance plans I don't know how much stress that will add to life. I also don't know if a newly minted attending has the pull to fill a cash practice.
-Isolation. I love working with colleagues and I like to teach. Will PP mean the only people I see at work are patients?
-Income uncertainty. I am totally fine with a $130-200k salary, I'm not shooting for the stars. I can guarantee that by signing on even in academics after graduating, I'm not sure what the market is like for PP in my city and how long / how much effort this salary range might take.
-Possible lack of variety. I'm not sure how you can weave seeing patients in with other opportunities like research, consulting, etc. Five days a week of a full outpatient schedule might end up wearing you down.
-Pager coverage. If I do solo, I have to find a way to get coverage or I'm it 24/7.
-It's probably hard to become a thought leader from PP (v academics).
-Roots. It would be a lot harder to leave and restart a PP than to leave a salaried position for another.
-If the healthcare landscape changes and I want to go back to academics, this is probably tougher than the other way around (leaving academics for PP).
-Losing my awesome access to pretty much every journal out there via the affiliated med school.
-Less exposure to seriously medically ill individuals who would probably need a clinic approach.
-How lean can a practice run? I would like to avoid hiring front desk staff etc, doing my own scheduling and billing, but I'm not sure if this can work. If I have to hire staff, I have to manage staff (and the per hour pay rate would take a real hit to do so).
-Benefits. You cover your own health insurance, retirement, etc etc. This should factor in to your income math.


PP Pros:
-Scheduling autonomy. I can work four days a week if I want, or do evening hours, part-time when it fits with my life, or leave schedule gaps, whatever. That flexibility probably isn't available in most salaried positions. I can also choose my practice location.
-Time with patients. If I feel psychotherapy is indicated I can do and bill for that, if short med management is indicated I can do that too. I would not have my practice style dictated by an employer.
-The focus is really clinical, allowing a lot of exposure to (and learning about) a range of psychopathology. I think this would be slowed down in an academic environment given the multitude of other responsibilities.
-Fun! I think running a small business adds a layer of complexity that would be engaging and challenging.
-Less direct politics (I'm sure networking is part of a successful business, but I would not for example have to work under a bad boss)
-Income potential: once you start hiring others (LICSWs, psychologists, other psychiatrists) and taking on additional responsibilities as they arise the income ceiling can lift significantly.
-Higher functioning patients (though this can be a con as well)



So basically I imagine a lot of people are thinking through a list of pros/cons similar to mine and end up going for the safer bet. I would love more input though about what PP life can look like, and how those who made the leap did so!

 

[nitemagi]

Bartelby, this is a good list. Since you're a PGY-3, reach out to a handful of different PP psychiatrists in your town, and learn about their business models. Find ones that take insurance, those that do cash, those with others working under them, group practice, solo practice, and even a psychoanalyst. Use them as models of what works and what doesn't. You have 2 years left where you can pick their brain before you have to get your first "real job."

PP is more heterogeneous than one might think. You can stack a med visit clinic and make it like any other, with 15 minute med visits for 8 hours a day. I work 3-4 days a week, with flexibility to expand that. I do hour long sessions primarily, with a predominance of therapy and some for meds. I supervise residents and med students. And I have time for doing my other life pursuits, such as writing.

 

[shan564]

I've seen lots of people say "I've crunched the numbers, and private practice would pay (insert large sum of money) in exchange for (insert modest number of work hours." I'm included in that group.

But it never actually pans out that way. People don't pay, insurance companies don't pay, lots of other factors. Real PP docs always end up pointing out several flaws with that calculation, end then give me a number that's significantly lower than what I'd calculated.

 

[Bartelby]

Good thoughts nitemagi, as the time to decide draws nearer I have started trying to talk with PP physicians and begun to get a little guidance. I think you are right about varied practice models, it is surprising how different each practice is (having seen glimpses into two primarily long-term psychodynamic practices, one CBT and medication subspecialty clinic, and one part time private practice for a well-established area academic). I don't quite know where I would fit into that spectrum but getting more of the gritty details would certainly help clarify!

 

[Doctor Bagel]

I've seen lots of people say "I've crunched the numbers, and private practice would pay (insert large sum of money) in exchange for (insert modest number of work hours." I'm included in that group.

But it never actually pans out that way. People don't pay, insurance companies don't pay, lots of other factors. Real PP docs always end up pointing out several flaws with that calculation, end then give me a number that's significantly lower than what I'd calculated.

Maybe, but from what I've heard in my community, private practice doesn't pay less than working for someone else. And as mentioned above, it's really our only place to do psychotherapy (in most cases).

I feel like I'm in a bind because I'm one of those risk-averse types of people with a lot of debt, but I also think I wouldn't have long term satisfaction doing just medication management, which is all anybody other than me (in my practice) would pay me to do. I skirted the dilemma a little this year by doing a fellowship, but I've got to decide where to dive pretty soon.

On the private practice note, everyone I've talked to in my community about it says they wish they did it sooner and that it was easier to set up than they anticipated. Of course I could also be selectively hearing things because this is what I want to hear.

Speaking of other employment options, I was talking to a VA attending in another field the other day who mentioned that the new person in charge of the VA is coming from the private business world (Proctor & Gamble I think?). This guy's thought is that there will be a much greater push for more documented efficiency from providers. I'm wondering how that will pan out for psychiatrists there.

 

[nitemagi]

A reframe on the whole issue: Can you tolerate a little discomfort/defer gratification for a more fulfilling outcome?

Of course you can, because you've completed med school and residency.

So many psychiatrists transition in PP, doing another job 1-2 days a week to make sure their bills are paid. That can give you the security you need/want, as you test out the PP waters.

 

[Indodo]

I work part time in PP and part time at a CMHC.
I take insurance and for the first year I made significantly less in PP, especially the first 6 months. Eventually however, PP does pay better.

 

[SomeDoc]

I work part time in PP and part time at a CMHC.
I take insurance and for the first year I made significantly less in PP, especially the first 6 months. Eventually however, PP does pay better.

How long did it generally take for you to get to the point of generating a comparably equivalent net income to the community mental health gig?

 

[Indodo]

How long did it generally take for you to get to the point of generating a comparably equivalent net income to the community mental health gig?

I would say about a year although there is month to month variability and I have noted that the winter months tend to be slower. Also, collections tend to lag behind in PP while at a job they pay you at the end of the month.

 

[clusterF]

Here is another problem with PP when you start out. You get all the benzo and stimulant seekers. I tend to do long intakes so that my headache is less later but I get so many 1 time appointments because I wont fill outrageous requests for prescriptions.
The good thing about this is that unlike at certain jobs, I am not beholden to a patient satisfaction survey. No Soup For You!