Why are the salaries so low on SDN?

[psychfriend]

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I'm suprised to read about all the low salaries on SDN because I just did a rotation with a psychiatrist in private practice in a major metropolitan city (not NY, LA, SF or Boston). He is an FMG who graduated from an average program. He was very candid about his earnings and basically said Psych should be a part of ROAD. He earns well over 300K per year. His practice is NOT cash based. He works 40 hours a week. His practice grosses about 230 dollars per hour. He averages about 3-4 patients per hour. His practice charges $350 per hour for 1st time visits or evals. They get reimbursed as much as $300 per hour and as little as $100 depending upon the patient's insurance. They get reimbursed about $50-$60 per revisit which lasts about 15 minutes on average. Their expenses are around 30% due to having little staff, equipment and a small lease. He also does some brain mapping which many insurances reimburse for as well. I confirmed all of this with his office manager. Interestingly, he also mentioned that several of his colleagues earn more than him. I was shocked because on SDN and this forum, they make it sound like all psychiatrists earn 200K or less. He mentioned that psych is a great field because half of all psychiatrists are retiring in the next 10 years and the demand will increase considerably

Please explain the above discrepancy? I can assure you that he wasn't exactly slaving away as he takes many Friday afternoons off and has no call. He doesn't work weekends either unless he elects to do an occassional Saturday to accomodate his patients.

 

[PsychMD2100]

I've noticed the same trend. The psychiatrists that I know do better than the ones who post here on SDN. I think it's a couple of things.

For starters, this is the STUDENT Doctor Network, which tends to draw younger, less established psychiatrists.

Since money remains taboo, some posters may be underreporting their incomes. There's still guilt associated with making money as a physician. This may be a part of it.

As long as you're not practicing in NY, LA, SF, Boston, then you can realistically expect to make over $200K starting out. I've known of established psychiatrists charging up to $500 per hour and collecting 2/3 of that amount.

 

[Anasazi23]

Most of the salaries posted here are for salaried positions within hospitals. You'll rarely see a salary over 200k for these, in my experience. The upside is that it's normally 8/9-5 with some call, no billing, no rent, no staffing costs, no phone cost, no malpractice cost, no health insurance cost...in other words, virtually zero overhead. If you take a 300k salary and figure all the overhead, you'll make substantially less.

Private practice is an entirely different matter. Though one can still make that much and much more in a fruitful practice.

 

[psychfriend]

I've noticed the same trend. The psychiatrists that I know do better than the ones who post here on SDN. I think it's a couple of things.

For starters, this is the STUDENT Doctor Network, which tends to draw younger, less established psychiatrists.

Since money remains taboo, some posters may be underreporting their incomes. There's still guilt associated with making money as a physician. This may be a part of it.

As long as you're not practicing in NY, LA, SF, Boston, then you can realistically expect to make over $200K starting out. I've known of established psychiatrists charging up to $500 per hour and collecting 2/3 of that amount.

Great post and I would agree. Are the established psychiatrists you were referring to charging insurance companies $500 per hour?

 

[psychfriend]

Most of the salaries posted here are for salaried positions within hospitals. You'll rarely see a salary over 200k for these, in my experience. The upside is that it's normally 8/9-5 with some call, no billing, no rent, no staffing costs, no phone cost, no malpractice cost, no health insurance cost...in other words, virtually zero overhead. If you take a 300k salary and figure all the overhead, you'll make substantially less.

Private practice is an entirely different matter. Though one can still make that much and much more in a fruitful practice.

That makes sense if they are referring to hospital related positions but hospital related jobs are lower in every field of medicne not just psychiatry. I know cardiology attendings who are earning 280K when they could easily double and potentially triple that salary working in private practice. They do it for the prestige, challenging cases and lifestyle the hospital provides. Also, salary refers to income after expenses have been removed. Revenue refers to gross earnings. The aforementioned private practice psychiatrist grossed a little over 500K (460K for office related work and another 40K from speaking, traveling engagements). He earned close to 350K so his salary was 350K not 350K minus overhead.

Also, many of the private practice psychiatrists started out in hospital related positions to generate their clientele and reputation. So they might have earned around 200K for the first 3 years of their career out of residency but they earned considerably more than that when they entered private practice.

The reason I posted this is that nearly every salary related thread in the Psychiatry forum basically implies you are capped at 200K as a psychiatrist unless you become a celebrity in NY who charges 500 cash per hour, which is hardly true.

 

[Panama Red]

To the original messenger, what medical school do you go to?

 

[Anasazi23]

The aforementioned private practice psychiatrist grossed a little over 500K (460K for office related work and another 40K from speaking, traveling engagements). He earned close to 350K so his salary was 350K not 350K minus overhead.

Well, I think that can be interpreted as good news. What you're hearing is not out of the ordinary.

Also, many of the private practice psychiatrists started out in hospital related positions to generate their clientele and reputation. So they might have earned around 200K for the first 3 years of their career out of residency but they earned considerably more than that when they entered private practice.

Right. Many early-career psychiatrists start out in salaried positions to have steady income that's usually well over 100k, and at the same time, build their practices on the side.

The reason I posted this is that nearly every salary related thread in the Psychiatry forum basically implies you are capped at 200K as a psychiatrist unless you become a celebrity in NY who charges 500 cash per hour, which is hardly true.

Trust me....I know plenty of psychiatrists making well over 200k. Many making twice that. There have been a few threads describing these types of practices, which include such things as boutique, faculty practice, private consultors, and regular private practice psychs.

There's plenty of money to be made in psych....

 

[PsychMD2100]

psychfriend,

The guys I know are mostly a mixture. They have their "paying" patients who demand extra access but also compensate them accordingly. Their bread and butter tends to be well-to-do patients who have great insurance plans that compensate well. Some insurance plans will authorize blocks of visits without the need for pre-authorization. The best insurance plans will then re-authorize blocks of visits with minimal interference or questions being asked. A small subset will pay all or nearly all of what the psychiatrist asks.

Then, as mentioned in other posts, they'll often having teaching positions as clinical faculty. This way, they keep their skills current and fulfill the service side of the profession.

 

[psychfriend]

psychfriend,

The guys I know are mostly a mixture. They have their "paying" patients who demand extra access but also compensate them accordingly. Their bread and butter tends to be well-to-do patients who have great insurance plans that compensate well. Some insurance plans will authorize blocks of visits without the need for pre-authorization. The best insurance plans will then re-authorize blocks of visits with minimal interference or questions being asked. A small subset will pay all or nearly all of what the psychiatrist asks.

Then, as mentioned in other posts, they'll often having teaching positions as clinical faculty. This way, they keep their skills current and fulfill the service side of the profession.

I'm a newbie to all this so for me it was amazing to note how many insurance plans are in existant and how so many of them do actually compensate fairly well. There are some insurance plans that don't reimburse well and he didn't accept those. He has more than enough patients that he wasn't forced to accepting lower reimbursing plans. In fact, I don't see how any competent psychiatrist with common sense and decent social skills would have to accept these plans since the demand is fairly high. But most of his patients were on "average" insurance programs. Most of his clients were lower middle class to middle class. He wasn't catering to a wealthy patient population and he was still doing extremely well.

 

[outofhere]

Again, keep in mind that the private psychiatrist doesn't get paid holiday, vacation, sick time, whereas the salaried hospitalist gets all that, and a retirement plan. So, a simple way to estimate benefits is that benefits are usually worth another 1/3 of one's salary. Therefore, a guy who receives benefits and a salary of $150,000 is making about the same amount of money as a guy who makes $200,000 without benefits.
I don't know about outpt, because I haven't done that, but an inpt practice where you bill insurance as you go, I know one can easily make $240,000 working about 30 hrs a week in the metropolitan area that I am in.

 

[psychfriend]

Again, keep in mind that the private psychiatrist doesn't get paid holiday, vacation, sick time, whereas the salaried hospitalist gets all that, and a retirement plan. So, a simple way to estimate benefits is that benefits are usually worth another 1/3 of one's salary. Therefore, a guy who receives benefits and a salary of $150,000 is making about the same amount of money as a guy who makes $200,000 without benefits.
I don't know about outpt, because I haven't done that, but an inpt practice where you bill insurance as you go, I know one can easily make $240,000 working about 30 hrs a week in the metropolitan area that I am in.

The gross revenue and earnings stated above includes missed working days due to vacation, sick days etc. In the example above, the private psychiatrist grossed over 500K including holidays, vacation and sick time. Hypothetically, if he worked those holidays and took no vacation or sick leave, he would have grossed a lot more than 500K. So you can't subtract 1/3 of one's salary. In your example, the person who makes 200K includes his salary with missed days due to holiday, vacation and sick leave. And benefits hardly eats up a 1/3 of one's salary. Retirement plans are based on how much money you choose to set aside for retirement based on your earnings. It also includes 401K plans that companies match.

The reason most people don't jump into private practice after residency is because of the risk involved. It's like running any other business and you have start up costs. You have to lease or buy an office. You have to hire staff. You have to pay for advertising to create a patient base. If you talk to any person starting any business, he or she will tell you that you will be lucky to cut even or go slightly in the red in your first year and sometimes second year. For most physicians, this is unacceptable because they have so many expenses to pay. Most have a school loan that exceeds 150K and many are counted on to be the primary earners in their family regardless if their spouse works. This is why many residents will work for a hospital for several years before jumping into private practice. They will use that job to save money and build a clientele as well as potentially meet other physicians they can start a practice together with thus lowering their startup costs. However, once a psychiatrist has established a successfull private practice, the income is significantly more than that of any hospital related position and I don't think you will find many on this forum that would disagree with that notion. It's just that it takes a long time to reach that point.

 

[outofhere]

The gross revenue and earnings stated above includes missed working days due to vacation, sick days etc. In the example above, the private psychiatrist grossed over 500K including holidays, vacation and sick time. Hypothetically, if he worked those holidays and took no vacation or sick leave, he would have grossed a lot more than 500K. So you can't subtract 1/3 of one's salary. In your example, the person who makes 200K includes his salary with missed days due to holiday, vacation and sick leave. And benefits hardly eats up a 1/3 of one's salary. Retirement plans are based on how much money you choose to set aside for retirement based on your earnings. It also includes 401K plans that companies match.

The reason most people don't jump into private practice after residency is because of the risk involved. It's like running any other business and you have start up costs. You have to lease or buy an office. You have to hire staff. You have to pay for advertising to create a patient base. If you talk to any person starting any business, he or she will tell you that you will be lucky to cut even or go slightly in the red in your first year and sometimes second year. For most physicians, this is unacceptable because they have so many expenses to pay. Most have a school loan that exceeds 150K and many are counted on to be the primary earners in their family regardless if their spouse works. This is why many residents will work for a hospital for several years before jumping into private practice. They will use that job to save money and build a clientele as well as potentially meet other physicians they can start a practice together with thus lowering their startup costs. However, once a psychiatrist has established a successfull private practice, the income is significantly more than that of any hospital related position and I don't think you will find many on this forum that would disagree with that notion. It's just that it takes a long time to reach that point.

I agree with a lot of what you said about private practice and being in the red for a while. However, remember that when you're in private practice, you're responsible for your retirement. In comparison to a Kaiser physician, once you become a partner, you have both a pension plan, AND a 401 K, moreover, when you retire, you and your spouse will get health insurance FOR LIFE, that is in addition to free health insurance for your entire family while you're working. This can be worth a lot of money, given how social security, and medicare will probably not be around when we retire. And given how Americans have problems saving for retirement, this may end up worth more than 1/3 of one's gross income.

 

[sga430]

I am assuming this thread is about general adult psychiatrists. how about the other fields???😕

 

[chocomorsel]

This is very exciting news for someone like me interested in psych. I am doing my AI right now, just finished my personal statement, and still questioning whether or not I'm making the right decision. In fact I have an appt to talk to one of the Anesthesia faculty tomorrow about critical care, since I loved it when I did it. Just that I don't know if I like general anesthesia that much to do it for three years.

Anyways, thanks OP, for that good news. I keep getting tired of people telling me that I won't make much money in psych. But I see a great need for it currently and coming from a family where we have a couple of psych cases, I can really see and appreciate the work of psychiatrists.

My ideal situation would be to open up a practice but still do some inpatient work as well, like C/L. So I'm kinda leaning towards that. The docs in Austin had that going and seemed to be doing well.

Anyway, I'm glad that I will be making good money and will not have to say no to insured lower/middle class patients in order to do that. I mean, most of our patients are typically not gonna be rich and depressed housewives as television portrays. Woohoo!!!!!

Good luck to all the future psychiatrists out there. 😍😍

 

[i61164]

Trust me....I know plenty of psychiatrists making well over 200k. Many making twice that. There have been a few threads describing these types of practices, which include such things as boutique...

Does boutique = cash only?

On other threads that I have read, people have said that it is extremely difficult to set up this type of practice and that the patients expect a Harvard degree (and the patients are really annoying).

 

[psychfriend]

Does boutique = cash only?

On other threads that I have read, people have said that it is extremely difficult to set up this type of practice and that the patients expect a Harvard degree (and the patients are really annoying).

The psychiatrist I followed had some cash patients. I asked him about cash practices and he said it's extremely difficult to set up. He said that it's rare that a psychiatrists does 100% cash only. Most will have a mixture of cash patients and patients on high insurance plans. I think it's something you can slowly introduce into your practice. After you become full and you stop accepting new patients, you can start to schedule only cash patients. That's a strategy

I personally wouldn't want to do a cash patient practice. Sure, the money would be nice but you would lose a significant amount of control and peace of mind knowing you would have to be a personal slave of a wealthy person who demands your services at any time. That's just not worth it in my opinion. You can earn a very good income without having to see these patients.

 

[Anasazi23]

Most of the psychs that I see that have these so-called boutique practices do take both cash and high-end insurance.

Believe me...none of them are slaves to rich people's whims. Quite the opposite. A psychiatrist that is allowing themselves full access to their patients at any time has serious boundary issues and are doing them a disservice.

The concept of high quality care conducted in a structured, consistent setting does not dictate all-hours access. The latter seems to be more the territory of social workers and psychologists, in my experience.

My parents' family doc down in Florida said that he tried the whole "5k/year for unlimited access" thing, but that it was too burdomsome and aggravating to be worth it in the long run. I assume it would be the same for a psychiatrist. However, I can't really say I know any psychiatrist that allows their patients 24hr access. Again, very much the opposite. I have seen patients page or call the cell phone of a doc that was obtained through an answering service, to which the doc responded..."This can be discussed at your next appointment," and promptly but politely ends the call. If it truly sounded like an emergency, they recommend to call 911 or may even do it themselves...but that was the extent of it.