I can answer this:
When I was a MS4, I rotated with a private practice Psychiatrist. Therefore, I saw the answer to this question first hand. This rotation opened my eyes to the beauty of psychiatry. There is unbelieveable amounts of autonomy that can come with a private practice psychiatric practice.
Think about it: your overhead is just an office without need for nurses nor nurse's aides or medical assistants. This particular preceptor also did not have a secretary. He also took no insurance, so there was no need for a biller.
He charges $400 for initial consultation and $200 for 1h f/u appts.
Here is one key factor I learned from him: If you keep overhead low; AND you charge the right price . . . then you do not have to kill yourself seeing a ton of patients.
He used to have a secretary. However, when he realized that she was costing him $25k per year . . . He got rid of her. This allowed him to see fewer patients while still making the same income. Since your patient load is low, you can handle all the secretarial tid-bits yourself. Having fewer patients allows you to manage everything yourself while having better work hours and the same income level.
Here are some other tips that I learned from my preceptor about how to build a practice. Mind you, this doc took years to learn these little tricks which he gladly shared with me:
1. Hold community out-reach classes. You can hook up with your local community hospital and hold free classes for the community on such subjects as: Stress Management; How to have a healthy Sex Life; Sleep Hygiene. These classes will be a large source of you patients. [The key is to have a catchy title to your talk; and just have a business card attached to the class notes that you pass out.]
2. Net work with the psychologists in your area. Many Psychiatrists are snobbish and do not get to know the psychologists and MSW's in the area. That is a mistake. These providers are great sources of referrals. My preceptor used to hook up with the psychologists and take them out to really fancy restaurants. This proved a very good return for the time invested. In fact, he had to stop the dinner invites because he was overfilling his practice.
3. Have an Ad in the yellow pages. This Doc got 20 to 40% of his business from the yellow pages. If you can have a catchy ad that promises SAME day Appt (remember: your schedule is light because you are charging the right amount $ per hour. This allows you the luxury to promise same day appts. Pts in distress want their problems solved
today! They are going to come to see you if you can see them the same day. A lot of times, these calls will be a distressed parent wanting to bring their adolescent child in for evaluation. So, all you do is ask the parent to bring the child in for one of the afternoon open slots). Also: Parents are usually the ones willing to pay the cash because it is an issue regarding their child. A parent may not want to pay for treatment for themselves, but when it comes to their child, they are more willing to go ahead and pay out of pocket!
All these things above will allow you to build up a practice within one year. At least, that is what my preceptor says he is able to do. He says that with his experience in this business, he knows that you can drop him into any large city in the US and he would be able to build up a viable practice within one year.
[Here is some other tid-bits:
1. He is not board certified. He never found the need to be board certified. This doesn't seem to hurt his private practice.
2. He goes bare! [ie: he does not carry Malpractice insurance!.] He feels that he is able to screen out the trouble people. [He will refund the $800 or $600 after a few sessions if the pt shows signs of being overly demanding. People are more than happy to get the fees back and leave the practice. For Dr. D, it is a small price to pay to make sure that his practice is free of the overly demanding pts.]
3. He is not a child/adolescent specialist. However, it is well within the scope of practice for a Gen. psych to see that population.
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Here is the math on your income potential:
There are 40 working hours a week. At a rate of $200/hr, if you just saw 20 patients a week, it is $4000 a week. If you worked 50 weeks a year, you'd gross $200,000. With your low overhead, you make a great living with a very nice life style, working just 20 hours with patients. You might do another 10 hours of administrative work between patients . . . but that is a small price to pay for the nicety of not having to pay for a secretary.
You can also write off the office space lease. The key is to have low overhead!!!
cheerios.
Signed: I am not Peiyueng. I am Peiyeng's spouse.
cheerios.
needinformation said:
I am still a resident, so take this info with a grain of salt...
I don't think the people I know who are in private practice had an exact income that they thought they could achieve. It takes a while to build up a good private practice, (for instance, not taking patients that will drag you through mud...) Therefore, most people I know start working a part-time job at first, either moonlighting in emergency rooms, hospitalist...etc. I have heard that it may take 3-5 years to fill a good full-time practice (usually 30 hours or more of face-to-face time.) I imagine if you are willing to take anybody, it won't take as long, but then you will get called and called anc who needs that?!
I think you will pay malpractice first, because you should NOT practice without malpractice insurance. As for social security, taxes, you will need to consult a CPA type person...probably.
As for how much you can charge, that is based on your location, and essentially, the going rate of the area. I think, in major metropolitan places, you can probably charge around $200 for 50 minute psychotherapy. But then, discussing how much you charge is probably against anti-trust laws. Anyway, people also charge more for the first evaluation session. You can charge whatever amount you wish to charge, but whether you get it or not is another issue.
In terms of insurance, it is good to be on the panel for referrals- if you are with Blue Cross, those patients get your name on their list and they call you. However, then you are obligated to accept whatever Blue Cross had determined to be the usual and customary rate. For major metropolitan cities, probably around $150 for 50 min psychotherapy session, a little bit more for both psychotherapy and med. You will make more $ if you do two 20- minute med checks then 50 min psychotherapy: just the way it is structured. If you don't take insurance, it may be diff to get referrals and those people that you do treat will have to get reimbursed themselves, and it is hard to say how much hassle people are willing to put up with. Furthermore, they will have a greater out of pocket cost if they see a non-panelist, but that is dependent on parity vs. non-parity dx. Some people hire billing services to collect $ from insurance companies, as this can be quite complicated if you have a large volume which then will pay for itself...
I think psychiatrists in private practice, in major metropolitan cities, are comfortable. I have heard someone making $350,000 a year...but then, he is ALWAYS working.
Maybe I watch too many suspense/thriller movies, but is this a valid concern? Would a totally solo-practice with no secretary be more likely to be located in a medical office building or other well-traffic'd area...maybe one with a security guard? Am I just too paranoid? 
