Why is the proportion of cash pay patients in psychiatry so much higher

[davidjeans]

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I'm talking 21% of patients in psychiatry are cash-pay only. This compares to fields like primary care and even derm, whose rates have always been <4%.

More cash payments than primary care makes sense, but derm too? What makes psychiatry so special

 

[Bartelby]

I think a few things are key:

1- Insurance pays really poorly for therapy, so if psychiatrists want to do therapy cash makes a lot of sense.
2- Psychiatrists can easily go solo, renting some space and starting a practice. By avoiding insurance you can avoid hiring the billing staff, front desk staff, etc. that many specialties need.
3- People really value what we have to offer, especially when they or a loved one is facing serious struggles with mental illness. The "market rate" of what people are willing to pay is often well above what an insurance company is willing to pay.

There are other reasons, but combining the above three goes a long way to explain the effect.

 

[davidjeans]

those are good points, but I would say that mostly applies for derm too. There are also many more elective treatments they are able to offer that aren't even considered under insurance, whereas psych has few electives. Is the insurance based systems really bad enough to drive patients away from hospital psychiatrists?

 

[Bartelby]

Keep in mind that insurance typically pays well for short E&M focused visits and for procedures. Dermatology is a goldmine of both! So if a dermatologist can see 4-6 patients per hour at about the same per-patient rate as I get for two per hour, an insurance-based practice starts to look a lot more appealing. It also broadens the range of patients who can afford to see you quite a bit. In addition, taking more time (like an hour per patient) as a dermatologist does not make sense, but as a psychiatrist in the right circumstances can be really useful.

The dermatologist also by nature has a pretty high-volume practice meaning they probably need to hire staff for their practice anyway. If I am offering therapy I could have a full day with seven one-hour therapy appointments, but a dermatologist will always need higher volume to sustain either an insurance practice or a cash practice.

 

[TexasPhysician]

Derm sees high volume. Many of their “add-ons” (cosmetics) are cash only. They make much more doing this combo than cash only because of their volume abilities.

DPC primary care is on the rise. They are newly realizing that they can have a more enjoyable practice doing cash pay and the percentages are on the rise.

In my cash pay practice, many patients progress to seeing me 4x/year and my rates aren’t insane. Total expenditure per year to see me as a specialist isn’t that high. Annual costs to see me are less than an average single appendectomy for most.

 

[Sushirolls]

1) Become a practicing doctor
2) Start a private practice
3) Become contracted with UHC / UBH / Optum
4) Experience Pain Infused Insight 30mg IV QD PRN low stress normalcy moments
5) Start dropping insurance companies

 

[Merovinge]

Keep in mind that insurance typically pays well for short E&M focused visits and for procedures. Dermatology is a goldmine of both! So if a dermatologist can see 4-6 patients per hour at about the same per-patient rate as I get for two per hour, an insurance-based practice starts to look a lot more appealing. It also broadens the range of patients who can afford to see you quite a bit. In addition, taking more time (like an hour per patient) as a dermatologist does not make sense, but as a psychiatrist in the right circumstances can be really useful.

The dermatologist also by nature has a pretty high-volume practice meaning they probably need to hire staff for their practice anyway. If I am offering therapy I could have a full day with seven one-hour therapy appointments, but a dermatologist will always need higher volume to sustain either an insurance practice or a cash practice.

6 an hour for derm is slow. 50 patients is a quiet day if procedures are minimal (although they almost never work 5 days/week). I was an MD by the time I had to see derm and they never spent more than 5 minutes in the room with me at any appointment. Seeing their schedule grids almost gave me palpitations as a psychiatrist. If you ever want to see how to effectively run a clinic, do a derm rotation.

 

[comp1]

Basically because the code reimbursement doesn't reflect the work put in relative to derm and primary care.

 

[Stagg737]

those are good points, but I would say that mostly applies for derm too. There are also many more elective treatments they are able to offer that aren't even considered under insurance, whereas psych has few electives. Is the insurance based systems really bad enough to drive patients away from hospital psychiatrists?

This:

Basically because the code reimbursement doesn't reflect the work put in relative to derm and primary care.

Plus the fact that insurances may still have significant restrictions on MH. Coverage does not equal access to care, ie some patients may have insurances that no psychiatrist takes because of crap reimbursement, so it's easier to just pay out of pocket.

Additionally, dermatologists bill for procedures frequently. Biopsy? Cryotherapy? Shave removal? That'll be an additional $1500 today, please and thank you! Why risk patients not paying when insurance/CMS will reimburse readily? Psychiatry isn't going to have those "surprise" charges and the advertised cash rate is what you will pay, which is typically going to be much lower than cash price of derm unless it's a very high end MH practice.

 

[brosa]

As a side note, do you guys see that around you? In residency we have zero contact with cash-pay practices, so I've never seen one or heard about one. Not sure if they are all concentrated in the Bay Area or something like that.

 

[TexasPhysician]

As a side note, do you guys see that around you? In residency we have zero contact with cash-pay practices, so I've never seen one or heard about one. Not sure if they are all concentrated in the Bay Area or something like that.

Every major metro has cash pay physicians. In Texas at one point or another, some family member has seen a cash pay psychiatrist, dermatologist, family doctor, pediatrician, gastroenterologist, allergist, and general surgeon.

 

[calvnandhobbs68]

Every major metro has cash pay physicians. In Texas at one point or another, some family member has seen a cash pay psychiatrist, dermatologist, family doctor, pediatrician, gastroenterologist, allergist, and general surgeon.

Pure cash only seems to be much more common around southern large metros or costal cities. Basically where people can afford it. Texas has quite a few large metros.

Midwest it seems to be much more common for people to take at least 1-2 of the major insurance plans even around the larger metros unless you're talking like Chicago.

 

[sloh]

Derm has the double whammy of fast visits and fast procedures which both get reimbursed by insurers. No point for most of them to go cash-pay. In fact, going cash-pay may attract the more needy and entitled crowd.

 

[futureapppsy2]

There also been, at least historically, a stigma piece in psych that pushed some patients towards cash pay.

 

[clausewitz2]

There also been, at least historically, a stigma piece in psych that pushed some patients towards cash pay.

A significant plurality of my cash pay patients in the past have been healthcare professionals of various kind petrified about a mental health diagnosis appearing in their medical record, as it will if they have it covered by insurance.

 

[davidjeans]

To summarize:

-Largest contributing factor is poor insurance payouts with low overhead pushes psychiatrists towards private cash practices
-Demand in larger cities comes with more affluent patients with ability to pay
-MH stigma pushes patients towards confidentiality gained with self-pay

This bodes very well for someone interested in psychiatry and living in a coastal area. Thanks everyone for the thoughtful responses! 🙂)

 

[HemeOncHopeful19]

A significant plurality of my cash pay patients in the past have been healthcare professionals of various kind petrified about a mental health diagnosis appearing in their medical record, as it will if they have it covered by insurance.

Do you not keep a medical record for your cash practice? I think this part is overrated.

The real reason Psych has more cash pay is because it can be extremely low overhead compared to almost any other specialty - no in office meds, sutures/scalpels, etc.

I used to see a cash pay doc and they were cheaper to see annually than paying a single month of my insurance premium. In order to take insurance their overhead would shoot up and they would need to charge more even for cash pay patients just to pay the extra staff needed to take insurance.

 

[Merovinge]

A significant plurality of my cash pay patients in the past have been healthcare professionals of various kind petrified about a mental health diagnosis appearing in their medical record, as it will if they have it covered by insurance.

I tell all my doctor friends/colleagues to see a cash pay psychiatrist and ideally one 30+ minutes away from where you work. It's absurd I have to tell them this, but the reality of the situation is the reality of the situation.

 

[Merovinge]

To summarize:

-Largest contributing factor is poor insurance payouts with low overhead pushes psychiatrists towards private cash practices
-Demand in larger cities comes with more affluent patients with ability to pay
-MH stigma pushes patients towards confidentiality gained with self-pay

This bodes very well for someone interested in psychiatry and living in a coastal area. Thanks everyone for the thoughtful responses! 🙂)

There are plenty of options available for cash practices outside of the coastal areas. Any place that has a metro pop in the 7 figures is assuredly supporting some cash psychiatrists. Some cities are naturally going to have a little more or less demand than others (e.g. blue areas > demand than red areas), but you do not have to live on a coast to practice cash psychiatry.

 

[Candidate2017]

If you have two nickels to rub together, going to a cash pay clinic will increase, but not guarantee, the chances of getting someone who: doesn't run 50 minutes late, speaks English, actively listens/thinks, doesn't stare at a computer, doesn't show you the door after 10 minutes, doesn't tell you to talk to the therapist (i.e., social worker) when you utter anything unrelated to meds, well-trained in therapy, and is... a real physician.

Also, have you been to a run of the mill psychiatric clinic? Wait 10 minutes for the surly secretary to check you in, find a seat not covered in mystery fluid, decide whether to take a seat next to the person muttering to themselves or the person with face tattoos, and hold your breath for the next 40 minutes if you don't like the smell of cigarettes, weed, and meth.

 

[Sushirolls]

*scratch the meth smell. Insert Body Odor unwashed for days funk.

 

[comp1]

Yeah, meth, in my experience tends to be associated with more of a BO smell than anything else in specific.

 

[Mapplicant]

6 an hour for derm is slow. 50 patients is a quiet day if procedures are minimal (although they almost never work 5 days/week). I was an MD by the time I had to see derm and they never spent more than 5 minutes in the room with me at any appointment. Seeing their schedule grids almost gave me palpitations as a psychiatrist. If you ever want to see how to effectively run a clinic, do a derm rotation.

Can confirm. I had to see derm for the first time the other day. The doc was in the room with me for probably 4 minutes max. Granted I didn't have any thing that needed any procedures or treatments but it was in and out and super efficient from waiting room to back out to my car.

 

[clausewitz2]

Can confirm. I had to see derm for the first time the other day. The doc was in the room with me for probably 4 minutes max. Granted I didn't have any thing that needed any procedures or treatments but it was in and out and super efficient from waiting room to back out to my car.

The last time I saw a dermatologist I ended up talking to them for about 10 minutes, but six of those minutes were basically a curbside of "another patient here right now is suicidal, what should we do?"

 

[HemeOncHopeful19]

The last time I saw a dermatologist I ended up talking to them for about 10 minutes, but six of those minutes were basically a curbside of "another patient here right now is suicidal, what should we do?"

Sounds like you did the majority of the encounter and should get the RVUs