Join a group or private practice straight out of residency?

[surfguy84]

All along Ive been thinking of doing private practice straight away. I figured I'd do cash but also take a big payor or two to get some patients in the door. In my area a standard 99214+90833 would reimburse about 260.

There is a multi specialty group I have been in contact with since early in pgy4. They are a boutiquey, upscale kind of place. They seem like they do good work. They have a good sized waiting list and do all cash. They want to bring me on board. My cash rate with them would be 550 and they would give me 60%, so 330/hr They also do out of network billing. Almost all appointments are virtual, they have good front desk support, handle out of network insurance issues.

I'm wondering if going with the group is worth it for the convenience and the chance to establish myself and learn how to run a practice or if I should just bite the bullet and start my own right away. I'm imagining between billing and credit card fees and other overhead, my hourly at my own insurance based practice would be maybe 50-60 dollars an hour more but with double the work (2 patients per hr if doing insurance vs one) and the stress of running a business.

I suppose I could get my feet wet for a year or two and then leave to start my own as well.

Curious to hear thoughts and/or if you think this group practice should be giving me a bigger cut, or anything else you think I'm not considering. Thanks.

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[clozareal]

I had the same dilemma coming out of training and I imagine we may be in the same area. Straight out of training, it’s probably better to have the support from colleagues and learn how a clinic operates efficiently or not.

With that being said, I did solo PP straight out of training and it was a really big learning curve, but so worth it. I had some personal circumstances where I needed to have more autonomy than a group practice could provide. However, some practices allow you to basically operate like a private practice where they don’t control your schedule or push new intakes on you which would be the best of both worlds.

 

[surfguy84]

I had the same dilemma coming out of training and I imagine we may be in the same area. Straight out of training, it’s probably better to have the support from colleagues and learn how a clinic operates efficiently or not.

With that being said, I did solo PP straight out of training and it was a really big learning curve, but so worth it. I had some personal circumstances where I needed to have more autonomy than a group practice could provide. However, some practices allow you to basically operate like a private practice where they don’t control your schedule or push new intakes on you which would be the best of both worlds.

This group sounds very hands off - I can run my schedule the way I want. There's no push to see more patients, etc. And since it's all cash pay, follow ups are 50 minutes, so no trying to squeeze in extra appointments each hour.

The main thing that gives me pause is the 40% cut. Given there are no billing fees and everything is largely virtual, what exactly am I paying them so much for? They did indicate there would be some potential to increase my cut after a while, but does 60/40 seem fair if that's what the deal is for the foreseeable future?

 

[hamstergang]

The main thing that gives me pause is the 40% cut. Given there are no billing fees and everything is largely virtual, what exactly am I paying them so much for?

Their reputation and large waiting list. You couldn't get that many people willing to pay that amount on your own right now. Also, the good front desk support.

 

[surfguy84]

Their reputation and large waiting list. You couldn't get that many people willing to pay that amount on your own right now. Also, the good front desk support.

Yeah I mean that makes sense. Just didn't know if 40% was standard for this.

 

[trophyhusband]

Yeah I mean that makes sense. Just didn't know if 40% was standard for this.

It's not but how many places are able to charge $550 in their location? Might make it more palatable to look at rates of other docs in the area and compare that to the $330/hr you'll be receiving. If they're charging more in the $400 to $450 range then you can think of it as getting 75-85%. If you can negotiate down the 40% in the future it gets even better.

Now if everyone else is charging $600 and filling it's not a great deal.

 

[Bartelby]

Would they allow part time with their group plus starting your solo practice separately? They might not, but if they do that's worth considering.

 

[Stagg737]

Take the % cut out of it for a moment. You’d be making $450-500K/year at 30 hrs/week doing 50 minute appointments, sounds like a full or close to full panel immediately, have the administrative side fully taken care of, and the opportunity to increase your percent take going forward. Sounds pretty great to me if you like the people you’d be working with.

 

[surfguy84]

Would they allow part time with their group plus starting your solo practice separately? They might not, but if they do that's worth considering.

Definitely something I am considering pushing for.

 

[splik]

The % is irrelevant. Instead you should be focusing on the $ amount you are getting and whether that is acceptable to you and what other benefits you are getting. $330 to see 1 pt an hour is very good. If you want more, ask for it. There is no harm in doing so if you can justify it. Looking at the costs absorbed is also not the whole picture because when someone employs or contracts a psychiatrist, they have to make a profit. Otherwise there is no point to bringing on people. There is a lot of risk, liability and headache in bringing in people. In addition, there is probably nothing stopping you at some point leaving the practice and setting up your own and your patients following you. Even with a non-solicitation clause, your patients will find you. 60/40 split is on the higher side but it is a mistake to focus on that vs how much you are making and what other benefits you get out of this. For example, the support staff, scheduling, help with prior authorizations, submitting OON claims, supervision/mentorship, support from other psychiatrists, case conferences, coverage, marketing, supply of cash paying patients and not having to handle the billing. In addition, also consider are they paying for your EMR, zoom/videoconferencing, EPCS (if doing controlled rx), giving you any CME, any benefits (e.g. health insurance, 401k)? Health insurance is a big deal if you don't have a spouse/partner with it because the obamacare plans are expensive and crappy. If they don't offer any benefits, this offer may be less attractive but it is still pretty good.

If you had your own solo insurance practice, it would probably take longer to grow your practice (assuming the cash practice has a steady stream of referrals), you would have to wait to get paid (insurances supposed to pay out in about two weeks but in some cases it can be months or even a yr lol), deal with headaches of insurance, deal with more non-payment issues, have to see twice as many patients. Also you'll be seeing lots of new patients to begin with, which means you will be making less per hour than you would through the cash practice. Also you will need to attract more patients and thus may take much longer to fill your practice.

 

[sophia502]

I faced something similar (and also wonder if we are in the same area). I'm a few years out of residency, have decent savings, paid down a big chunk of my loans, and had a partner whose income and insurance benefits I could depend on, so I went the solo PP route. All cash. (Also cobbled together other gigs to have some stable income.) I could not have done this right of residency for financial reasons (and so I was in an employed position the first couple years).

I'm in a VHCOL city, and I can charge a lot and I do. I'm filling, but slowly (but I'm also pregnant and so actually trying to keep it small and have done very little networking--I plan to ramp up much more post maternity leave). I'll say, once I went the solo PP route and started learning what my overhead would look like, taking 40% became a total no-go for me. And learning the business side is both frustrating and rewarding. But also, once my PP fills to where I want it, I will make substantially more than what I would have made with the group PP taking a 40% cut.

So--the upside is you'll fill faster since they are finding patients for you/using their waiting list, you'll have colleagues, you'll get your name out in the community faster, and you'll learn the ropes. (And all the other stuff Splik mentions above.) I think straight out of training it's not at all a bad gig (esp if you've got debt and stuff and you need to tackle). But you'll probably outgrow it. (The all-cash group PP in my area is almost ALL brand-new grads straight out of residency--don't blame them, it's a scary time, but interesting they don't have more experienced doctors on staff.)

The group in the state I'm in did not allow outside PP work, fyi. They saw that as competition.

 

[sloh]

I faced something similar (and also wonder if we are in the same area). I'm a few years out of residency, have decent savings, paid down a big chunk of my loans, and had a partner whose income and insurance benefits I could depend on, so I went the solo PP route. All cash. (Also cobbled together other gigs to have some stable income.) I could not have done this right of residency for financial reasons (and so I was in an employed position the first couple years).

I'm in a VHCOL city, and I can charge a lot and I do. I'm filling, but slowly (but I'm also pregnant and so actually trying to keep it small and have done very little networking--I plan to ramp up much more post maternity leave). I'll say, once I went the solo PP route and started learning what my overhead would look like, taking 40% became a total no-go for me. And learning the business side is both frustrating and rewarding. But also, once my PP fills to where I want it, I will make substantially more than what I would have made with the group PP taking a 40% cut.

So--the upside is you'll fill faster since they are finding patients for you/using their waiting list, you'll have colleagues, you'll get your name out in the community faster, and you'll learn the ropes. (And all the other stuff Splik mentions above.) I think straight out of training it's not at all a bad gig (esp if you've got debt and stuff and you need to tackle). But you'll probably outgrow it. (The all-cash group PP in my area is almost ALL brand-new grads straight out of residency--don't blame them, it's a scary time, but interesting they don't have more experienced doctors on staff.)

The group in the state I'm in did not allow outside PP work, fyi. They saw that as competition.

What is your current income after expenses and and what do you project it will be once you fill where you want it?

 

[When is graduation again?]

On a related note, I'm in the planning stages of creating a private practice, but I am hung up on office selection. Are there any regulations or restrictions on space for psychiatrists? The medical office leases in my area are way bigger than my needs, so I was looking into subletting from therapists/psychologists.

 

[Bartelby]

I think the main consideration is whether the space is ADA compliant. Can someone with mobility issues or a wheelchair access your office? You also need parking, want it to be a comfortable and appealing space, and want waiting room space and a professional vibe. Try to choose a location that will appeal to the patient population you are seeking.

If you plan to offer lab services look into CLIA (I recommend not offering onsite lab services, just send people out to a lab).

 

[When is graduation again?]

I think the main consideration is whether the space is ADA compliant. Can someone with mobility issues or a wheelchair access your office? You also need parking, want it to be a comfortable and appealing space, and want waiting room space and a professional vibe. Try to choose a location that will appeal to the patient population you are seeking.

If you plan to offer lab services look into CLIA (I recommend not offering onsite lab services, just send people out to a lab).

Perfect. That's all doable. Thanks for the advice.

 

[sophia502]

What is your current income after expenses and and what do you project it will be once you fill where you want it?

Great question, and writing this out is a good exercise.

For me, filling it would be 20 hours of clinical time a week (I am not close to that right now). But if I did fill, I would gross approx $35k-40k/month (mix of psychotherapy only, med mgmt only, and therapy + meds).

My expenses are low. My VHCOL city where cappuccinos cost $7 actually bottomed out when it came to office/business spaces post-COVID and WFH, so my rent is much less than I expected going into it.

Right now, I rent an office 2 days/week + EMR (intakeq) + psychology today + reimbursify + squarespace + iprescribe = approx $1000/month
And then of course there is malpractice (part-time rate), random license renewals, CME, other crap that pops up, so idk? = average another $8000/yr

So annually (and before taxes, retirement, etc), IF I were working 20 clinical hours/week x 40 weeks/year and being conservative at $35k/month: annual income $350,000
And my annual expenses roughly would be $20,000

I just started the PP a few months ago though, and I'm learning the ropes as I go, so I'm sure many more surprises will come my way in running a business. It's also very shoe-string--I learned how to create a website and did that myself, I got a very affordable EMR. I asked for (and received) discounts from the EMR, from reimbursify; I found a 20% off code for squarespace. Iprescribe was free for me for years, but they started charging last month—I also found a code for 20% off of that.

I have spent no money on marketing except buying coffees for therapists and other colleagues who work in my same niche as a way to introduce myself (and this has paid off in referrals). Also, re the niche (and no, it's not "integrative psych" lol, but actual psych/medicine that not a lot of docs want to do) -- I've found this has been huge in getting my name out to the community.

I've spent no money on furnishing an office, since I'm renting out a space that is very nicely furnished by the therapist who has the master lease. My utilities are wrapped up in my low rent. I use doximity for faxing (free); I used google voice for phone (free, but might change it). I won't make very much this year, so I'm teaching myself the accounting side (lots of great free material out there)--this is hard and if I can't figure it out/don't feel confident, I will get an accountant who works with physicians.

If I could get to 20 clinical hours full in a few years years, I would be thrilled. But it's building slowly, and I'll have a mat leave coming up which will put a hold on growth. I started this in March, and there have definitely been times where I've panicked at how slowly it's growing and thought about taking an employed position again. Or thought about taking insurance, and there is one payor I might consider taking in the future. Managing that anxiety is half the fun! But I have decided to just stay the course, and steadily it is picking up. I should also add, I'm working in a city where I did not train and which has a couple very well-respected psych residencies pumping out good psychiatrists who know each other and already have a referral base. Getting my name out there (and establishing a good reputation) will just take time and effort, which I can't buy. Another big part of my growth plan post mat leave will be joining whatever societies are specific to the area, networking, and also finally being able to start a psychodynamic psychotherapy training program. I’ve also had some casual sit-downs with very experienced PP psychiatrists in my city, and will probably pay for some supervision down the road as well.

And finally, to get to the core of the original question--once I decided to make the leap to solo PP and started seeing the numbers, I realized that in the long-term a 40% cut from a group PP just wasn't worth the advantages to me (and there are many). Of course my overhead will increase-- my city's downtown will rebound again at some point and I expect to see the rent go up; and there are lots of things I’m sure I’m overlooking in this first year. But it’s hard to see how my overhead would ever approach close to 40%. But I also respect that it definitely makes sense for other people. As I noted above, the only reason I can try this out now is because I have some savings, have paid down a ton on my (gigantic) loans and other debts, and my partner is also a physician who is employed--so I get benefits from him and we try to live off mainly his salary. When I was single and right out of training, this path just wasn't feasible for me.

 

[sloh]

Thank you for such a detailed response!

So annually (and before taxes, retirement, etc), IF I were working 20 clinical hours/week x 40 weeks/year and being conservative at $35k/month: annual income $350,000
And my annual expenses roughly would be $20,000

Solid. And you maintain your autonomy.

Also, re the niche (and no, it's not "integrative psych" lol, but actual psych/medicine that not a lot of docs want to do) -- I've found this has been huge in getting my name out to the community.

Good.

Of course my overhead will increase-- my city's downtown will rebound again at some point and I expect to see the rent go up; and there are lots of things I’m sure I’m overlooking in this first year. But it’s hard to see how my overhead would ever approach close to 40%. But I also respect that it definitely makes sense for other people. As I noted above, the only reason I can try this out now is because I have some savings, have paid down a ton on my (gigantic) loans and other debts, and my partner is also a physician who is employed--so I get benefits from him and we try to live off mainly his salary. When I was single and right out of training, this path just wasn't feasible for me.

Looks like you're in SF. Definitely helps that your spouse is a physician. Marrying the right person really can put someone's career and lifestyle on a completely different path. Kudos to you!

 

[drechie]

Thank you for such a detailed response!

Solid. And you maintain your autonomy.

Good.

Looks like you're in SF. Definitely helps that your spouse is a physician. Marrying the right person really can put someone's career and lifestyle on a completely different path. Kudos to you!

This may be slightly off topic but what are starting salaries in the Bay Area? I'm an East coaster who fell in love with SF.

 

[clozareal]

This group sounds very hands off - I can run my schedule the way I want. There's no push to see more patients, etc. And since it's all cash pay, follow ups are 50 minutes, so no trying to squeeze in extra appointments each hour.

The main thing that gives me pause is the 40% cut. Given there are no billing fees and everything is largely virtual, what exactly am I paying them so much for? They did indicate there would be some potential to increase my cut after a while, but does 60/40 seem fair if that's what the deal is for the foreseeable future?

40% isn't unreasonable especially starting off. You'll have access to high patient volume if you want, admin staff, probably an office location, and malpractice insurance. Perhaps you can build it into your contract to decrease that amount over time to a 30/70 split over a certain number of years (5 years or so) or ask how many years it would take to become a partner/shareholder if it's a physician-owned and physician-run group practice.

 

[surfguy84]

This may be slightly off topic but what are starting salaries in the Bay Area? I'm an East coaster who fell in love with SF.

Hourly 1099 for inpatient can be 250. Er about the same. Overnight coverage higher.

Corrections work is quite high, >300/hr. Reimbursement is high as well with insurance.

 

[clozareal]

This may be slightly off topic but what are starting salaries in the Bay Area? I'm an East coaster who fell in love with SF.

You can look this up on job websites now as CA employers are now required to post their salary ranges online for every job in CA.

 

[psychemdoc]

Great question, and writing this out is a good exercise.

For me, filling it would be 20 hours of clinical time a week (I am not close to that right now). But if I did fill, I would gross approx $35k-40k/month (mix of psychotherapy only, med mgmt only, and therapy + meds).

My expenses are low. My VHCOL city where cappuccinos cost $7 actually bottomed out when it came to office/business spaces post-COVID and WFH, so my rent is much less than I expected going into it.

Right now, I rent an office 2 days/week + EMR (intakeq) + psychology today + reimbursify + squarespace + iprescribe = approx $1000/month
And then of course there is malpractice (part-time rate), random license renewals, CME, other crap that pops up, so idk? = average another $8000/yr

So annually (and before taxes, retirement, etc), IF I were working 20 clinical hours/week x 40 weeks/year and being conservative at $35k/month: annual income $350,000
And my annual expenses roughly would be $20,000

I just started the PP a few months ago though, and I'm learning the ropes as I go, so I'm sure many more surprises will come my way in running a business. It's also very shoe-string--I learned how to create a website and did that myself, I got a very affordable EMR. I asked for (and received) discounts from the EMR, from reimbursify; I found a 20% off code for squarespace. Iprescribe was free for me for years, but they started charging last month—I also found a code for 20% off of that.

I have spent no money on marketing except buying coffees for therapists and other colleagues who work in my same niche as a way to introduce myself (and this has paid off in referrals). Also, re the niche (and no, it's not "integrative psych" lol, but actual psych/medicine that not a lot of docs want to do) -- I've found this has been huge in getting my name out to the community.

I've spent no money on furnishing an office, since I'm renting out a space that is very nicely furnished by the therapist who has the master lease. My utilities are wrapped up in my low rent. I use doximity for faxing (free); I used google voice for phone (free, but might change it). I won't make very much this year, so I'm teaching myself the accounting side (lots of great free material out there)--this is hard and if I can't figure it out/don't feel confident, I will get an accountant who works with physicians.

If I could get to 20 clinical hours full in a few years years, I would be thrilled. But it's building slowly, and I'll have a mat leave coming up which will put a hold on growth. I started this in March, and there have definitely been times where I've panicked at how slowly it's growing and thought about taking an employed position again. Or thought about taking insurance, and there is one payor I might consider taking in the future. Managing that anxiety is half the fun! But I have decided to just stay the course, and steadily it is picking up. I should also add, I'm working in a city where I did not train and which has a couple very well-respected psych residencies pumping out good psychiatrists who know each other and already have a referral base. Getting my name out there (and establishing a good reputation) will just take time and effort, which I can't buy. Another big part of my growth plan post mat leave will be joining whatever societies are specific to the area, networking, and also finally being able to start a psychodynamic psychotherapy training program. I’ve also had some casual sit-downs with very experienced PP psychiatrists in my city, and will probably pay for some supervision down the road as well.

And finally, to get to the core of the original question--once I decided to make the leap to solo PP and started seeing the numbers, I realized that in the long-term a 40% cut from a group PP just wasn't worth the advantages to me (and there are many). Of course my overhead will increase-- my city's downtown will rebound again at some point and I expect to see the rent go up; and there are lots of things I’m sure I’m overlooking in this first year. But it’s hard to see how my overhead would ever approach close to 40%. But I also respect that it definitely makes sense for other people. As I noted above, the only reason I can try this out now is because I have some savings, have paid down a ton on my (gigantic) loans and other debts, and my partner is also a physician who is employed--so I get benefits from him and we try to live off mainly his salary. When I was single and right out of training, this path just wasn't feasible for me.

Thank you for this write up. Very helpful for everyone. You should definitely keep us updated. Can you tell me more about this med/psych niche? Are you dual dual boarded or just really kept up with medicine? Or certain medical comorbid areas?

 

[rjs2131]

Joined a group PP (insurance primarily) straight out of fellowship, no regrets here. I could likely make more on my own, but the support/camaraderie is priceless in the right group (ours has 10 MD's) and there are things I've learned/am learning from older psychiatrists that I wouldn't have gotten on my own. Also, certain groups will allow you to buy into other opportunities (partnership, real estate, etc) which you may not get on your own.

My concept of how much money I "need" has changed substantially since finishing. I didn't realize how much the numbers thrown around were impacting my perception of what I thought I "needed". A few years into PP, I'm realizing time is more valuable than the extra money and am grateful to be able to have control over my schedule and am considering cutting back a bit (i.e. 25 hrs vs 30 hrs).

 

[psychma]

Slightly different situation but similar. I initially went into a group practice for the referrals, steady income, and case collaboration. My husband is a physician so I didn’t have to worry about benefits and he helped with my student loans. When I felt ready, I made the leap into private practice. I’m trained in autism assessments and administer a variety of assessments. To keep up with ethical practice, I collaborate with a PhD. I charge a good fee and my practice is full. I have a 3 month waiting list just to be seen for a free consultation. Slowly, my name has gotten out in the community. My most frequent referrals are psychiatrists. I do not regret starting out in a group practice but am glad I am in private practice now. There is a steep learning curve, but it’s all doable. Personally, I’d do group practice to learn and grow a little more and then take the plunge.

 

[sighchiatry]

All along Ive been thinking of doing private practice straight away. I figured I'd do cash but also take a big payor or two to get some patients in the door. In my area a standard 99214+90833 would reimburse about 260.

There is a multi specialty group I have been in contact with since early in pgy4. They are a boutiquey, upscale kind of place. They seem like they do good work. They have a good sized waiting list and do all cash. They want to bring me on board. My cash rate with them would be 550 and they would give me 60%, so 330/hr They also do out of network billing. Almost all appointments are virtual, they have good front desk support, handle out of network insurance issues.

I'm wondering if going with the group is worth it for the convenience and the chance to establish myself and learn how to run a practice or if I should just bite the bullet and start my own right away. I'm imagining between billing and credit card fees and other overhead, my hourly at my own insurance based practice would be maybe 50-60 dollars an hour more but with double the work (2 patients per hr if doing insurance vs one) and the stress of running a business.

I suppose I could get my feet wet for a year or two and then leave to start my own as well.

Curious to hear thoughts and/or if you think this group practice should be giving me a bigger cut, or anything else you think I'm not considering. Thanks.

I would join the group. Ask for a better cut. But be happy with it regardless, this is a sweet set up.