What is the outpatient psychiatric hourly rate for outpatient work?

[jbomba]

Definitely happens in DC as well. And to address jbomba, no, it has nothing to do with being Ivy league.

Any reason NOT to just say to hell with it and try to charge those rates out of the gate?

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[clozareal]

I wonder how many of these individuals are charging this rate because they are Ivy (or similar) grads?

As I mentioned above, I will have received sub-specialized training in reproductive psych by the time I finish pgy4 with some really fantastic attendings. Generally speaking, I've got great training at a solid academic institution though definitely not an Ivy level name. I'm pretty sure my patients like me, I'm affable, and if I may say so, I know my stuff and do good work for my patients.

Despite all this, would it be ridiculous to start charging high fees out of the gate; 6-700/hr? I'll be in a very HCOL area with a population who could afford that. Ive always been a good networker and will have a side gig that will allow me to pull patients into my practice. I just don't know if my lack of Ivy background is going to make this a losing proposition. Any thoughts?

Having a brand name school or training program helps but some of it depends on supply of psychiatrists or subspecialists (CAP, addiction, etc.) in the market is, the demand for services, and the ability of that population to pay. What I'm discovering more of is that your rates that you can charge have less to do with any of that and more to do with marketing.

Any reason NOT to just say to hell with it and try to charge those rates out of the gate?

Setting rates is a personal decision. It's whatever suits your values. You'll have to decide between what the patient population can bear (market optimization) vs getting filled quickly vs personal financial comfort vs whatever others are charging. Some people have mentioned on this forum that there is an ethical obligation not to contribute to the rising costs of healthcare with higher rates.

 

[heartsink]

Some people have mentioned on this forum that there is an ethical obligation not to contribute to the rising costs of healthcare with higher rates.

This always struck me as an odd stance to take, considering only about 10% of healthcare costs come from physician take-home pay. A single doctor changing their rates (even up or down several hundred $) is about as impactful on the cost of healthcare as you individually mailing a check to the IRS for $100k to help reduce the national debt. Big for you, pennies for them. The only real motivation one would have to do this is to convince themselves they're a better person than people who don't do it.

 

[clozareal]

This always struck me as an odd stance to take, considering only about 10% of healthcare costs come from physician take-home pay. A single doctor changing their rates (even up or down several hundred $) is about as impactful on the cost of healthcare as you individually mailing a check to the IRS for $100k to help reduce the national debt. Big for you, pennies for them. The only real motivation one would have to do this is to convince themselves they're a better person than people who don't do it.

I agree. I tend to think psychiatrists undervalue themselves more often due to years of being looked down upon as a trainee where they think $200/hr is what they deserve (which equates to $276k salary assuming 30 clinical hours and 46 weeks of work). Many people pay more for a haircut or massage than some psychiatrists make in an hour.

 

[splik]

Any reason NOT to just say to hell with it and try to charge those rates out of the gate?

You don't want to set yourself up for failure or set things that are completely out of line. Your rates should reflect your education, training and experience, the availability of those with your skillset in that area, account for cost of living and practice expenses, and related to the usual and customary rates for your region. For example, if you have several experienced reproductive psychiatrists in your are who are charging $350 or $400/hr and you are charging $700 then why would people be paying you that. you would want to charge similar, possibly slightly less. If on the other hand, there is no one providing those services, then you can charge more. I would recommend you have a look at what people charge in your area, and potentially also consult fairhealth to get a sense of what the UCR for things might be where you are based. You should also feel confident with justifying your rates and the value you provide.

You also need to consider how many hours you want to work, how many hours you are willing to work, and how much time you have to build up your practice. If you have a good cushion financially and are only wanting to work limited hours and not wanting to work for less thant x/hr, then you could do so knowing it may take longer to get to that. If on the other hand you need to be financially viable in a short space of time, then your rates should reflect that. Don't set your rates too low however, as people will assume you are low quality if they are too low (though many low quality people also have high rates). You should also consider if you are wanting to focus on psychotherapy or pharmacotherapy. There are many more people able to pay $300 for a monthly 30 minute visit than there are able/willing to pay $600 for weekly therapy visits. There are lots of non-medical therapists as well who charge less, many of whom specialize in reproductive health.

 

[jbomba]

You don't want to set yourself up for failure or set things that are completely out of line. Your rates should reflect your education, training and experience, the availability of those with your skillset in that area, account for cost of living and practice expenses, and related to the usual and customary rates for your region. For example, if you have several experienced reproductive psychiatrists in your are who are charging $350 or $400/hr and you are charging $700 then why would people be paying you that. you would want to charge similar, possibly slightly less. If on the other hand, there is no one providing those services, then you can charge more. I would recommend you have a look at what people charge in your area, and potentially also consult fairhealth to get a sense of what the UCR for things might be where you are based. You should also feel confident with justifying your rates and the value you provide.

You also need to consider how many hours you want to work, how many hours you are willing to work, and how much time you have to build up your practice. If you have a good cushion financially and are only wanting to work limited hours and not wanting to work for less thant x/hr, then you could do so knowing it may take longer to get to that. If on the other hand you need to be financially viable in a short space of time, then your rates should reflect that. Don't set your rates too low however, as people will assume you are low quality if they are too low (though many low quality people also have high rates). You should also consider if you are wanting to focus on psychotherapy or pharmacotherapy. There are many more people able to pay $300 for a monthly 30 minute visit than there are able/willing to pay $600 for weekly therapy visits. There are lots of non-medical therapists as well who charge less, many of whom specialize in reproductive health.

What a helpful website! I never knew fair health existed.

Am I interpreting this correctly?
Out of network/uninsured price of 90833: $197
Out of network/uninsured price of 99214: $226

In this particular market, one could charge $425 for a 30 minute follow up med/therapy appt?

Also I hear you on basing my fees on what competition in the area is charging. But if theres a small handful of repro psychiatrists and they are all booked up, wouldn't that indicate my rates should be higher than what they are charging and that the market could likely support a higher rate?

 

[Stagg737]

What a helpful website! I never knew fair health existed.

Am I interpreting this correctly?
Out of network/uninsured price of 90833: $197
Out of network/uninsured price of 99214: $226

In this particular market, one could charge $425 for a 30 minute follow up med/therapy appt?

Also I hear you on basing my fees on what competition in the area is charging. But if theres a small handful of repro psychiatrists and they are all booked up, wouldn't that indicate my rates should be higher than what they are charging and that the market could likely support a higher rate?

Depends on demand. Is the demand high enough that people are willing to pay a premium to be seen RIGHT NOW or are they willing to wait 6+ months to pay half the price? If all of the local repro clinics are booked and not accepting any new patients, you can probably get away with charging a little more with the understanding that you'll not only see new patients but will see them ASAP. It's not only about what you're worth, it's about knowing what the supply/demand curves look like in a given locale.

 

[jbomba]

Depends on demand. Is the demand high enough that people are willing to pay a premium to be seen RIGHT NOW or are they willing to wait 6+ months to pay half the price? If all of the local repro clinics are booked and not accepting any new patients, you can probably get away with charging a little more with the understanding that you'll not only see new patients but will see them ASAP. It's not only about what you're worth, it's about knowing what the supply/demand curves look like in a given locale.

Tbh this business side of things gets me excited lol. I had a small business in a career before med school so looking forward to combining both passions now.

 

[clozareal]

What a helpful website! I never knew fair health existed.

Am I interpreting this correctly?
Out of network/uninsured price of 90833: $197
Out of network/uninsured price of 99214: $226

In this particular market, one could charge $425 for a 30 minute follow up med/therapy appt?

You can charge that if you want and insurance reimbursement might cover for most if not all of that actually depending on what their allowable max for those CPT codes are. In my experience, the insurances have reimbursed the patient about that much for those CPT codes. However, I find insurance reimbursement to be fickle and not guaranteed so they'll have to be comfortable paying that amount and thinking they'll get $0 back.

Also I hear you on basing my fees on what competition in the area is charging. But if theres a small handful of repro psychiatrists and they are all booked up, wouldn't that indicate my rates should be higher than what they are charging and that the market could likely support a higher rate?

This is one way to think about it but don't forget that those repro psychiatrists have already established a reputation in the community to command those rates.

 

[splik]

What a helpful website! I never knew fair health existed.

Am I interpreting this correctly?
Out of network/uninsured price of 90833: $197
Out of network/uninsured price of 99214: $226

In this particular market, one could charge $425 for a 30 minute follow up med/therapy appt?

Also I hear you on basing my fees on what competition in the area is charging. But if theres a small handful of repro psychiatrists and they are all booked up, wouldn't that indicate my rates should be higher than what they are charging and that the market could likely support a higher rate?

So there are some caveats. One is the 9921x amounts they have are not specialty specific, and in general they would be lower for psych than other specialities. The second is the amounts on there are the 80th %ile, not the 50th and is based on big box shops no solo private practices which are completely excluded if they are private pay. The third, is you need to remove the facility fees if they are included in those values (since you don't have facility fees just pro fees). So these amounts are much higher than average. That said, several insurance companies such as United Healthcare, use Fairhealth's 70th %ile for the maximum allowed amount (i.e. they will reimburse 40-80% of that to the pt) so that's why it is useful.

So just make sure to look at the data properly. $425 for a 30 minute follow up would put you in the 90th or 95th percentile for psychiatrists in pp.

 

[jbomba]

So there are some caveats. One is the 9921x amounts they have are not specialty specific, and in general they would be lower for psych than other specialities. The second is the amounts on there are the 80th %ile, not the 50th and is based on big box shops no solo private practices which are completely excluded if they are private pay. The third, is you need to remove the facility fees if they are included in those values (since you don't have facility fees just pro fees). So these amounts are much higher than average. That said, several insurance companies such as United Healthcare, use Fairhealth's 70th %ile for the maximum allowed amount (i.e. they will reimburse 40-80% of that to the pt) so that's why it is useful.

So just make sure to look at the data properly. $425 for a 30 minute follow up would put you in the 90th or 95th percentile for psychiatrists in pp.

Thanks for the information. I did separate out from the facility fee so these are just pro fees. The metro I'm looking in appears to be higher than a half dozen other or so I was looking at for comparison...so perhaps compensation is just higher here (it's on the west coast).

As far as being lower for psych I did compare my current area to rates Ive heard recent grads are getting in pp. Seems to be pretty close, within 15 dollars or so. So hopefully the better payors are closer to what's quoted on this site.

 

[BiscoDisco]

Just for funsies I looked up the reimbursements in NYC and SF.


Out of network NYC was 730 for 214 + add on. In network was 370.
Out of network SF was 740 for the same. In network was 580!!

Insane.

 

[Zyprexa100]

I wish I know someone that can negotiate rates with insurance.

 

[BiscoDisco]

I wish I know someone that can negotiate rates with insurance.

Aren't there companies they will get you paneled and negotiate for you in return for a cut?

 

[forchinet121]

So there are some caveats. One is the 9921x amounts they have are not specialty specific, and in general they would be lower for psych than other specialities. The second is the amounts on there are the 80th %ile, not the 50th and is based on big box shops no solo private practices which are completely excluded if they are private pay. The third, is you need to remove the facility fees if they are included in those values (since you don't have facility fees just pro fees). So these amounts are much higher than average. That said, several insurance companies such as United Healthcare, use Fairhealth's 70th %ile for the maximum allowed amount (i.e. they will reimburse 40-80% of that to the pt) so that's why it is useful.

So just make sure to look at the data properly. $425 for a 30 minute follow up would put you in the 90th or 95th percentile for psychiatrists in pp.

425 for a 30 minute visit would put you only in the 95th percentile? So 5 percent are grossing more than 850 per hour?

 

[painballer27]

425 for a 30 minute visit would put you only in the 95th percentile? So 5 percent are grossing more than 850 per hour?

Everyone should be. That is adequate compensation for this line of work.

 

[splik]

425 for a 30 minute visit would put you only in the 95th percentile? So 5 percent are grossing more than 850 per hour?

Something like that. I can tell you my hospital get reimbursed more than $600 for a 99214+90833 and they bill a little less than 2 of the other healthcare systems in the area.

 

[forchinet121]

Something like that. I can tell you my hospital get reimbursed more than $600 for a 99214+90833 and they bill a little less than 2 of the other healthcare systems in the area.

Yeah but that’s hospitals not individual solo docs right? So it’s not really relevant unless I’m mistaken about something..you’re not gonna open a clinic and get those rates only a huge hospital can

 

[BiscoDisco]

Yeah but that’s hospitals not individual solo docs right? So it’s not really relevant unless I’m mistaken about something..you’re not gonna open a clinic and get those rates only a huge hospital can

I'm looking at rates in my area. 99214+90833 is ~$260. In reality, the couple of new grads I know are getting 215-220 for the same. At larger clinic with one psychiatrist, a couple NPs and and several therapists they are getting $240 for the same. So none of these entities are significantly far off what Fair Health indicates.

For another data point, a rate in a city in SoCal on Fair Health indicates ~340 for 214+833. I've been talking to a large multi-site clinic out there to potentially work after graduation. They sent me their fee schedule and they are making $295 per follow up with their biggest payor.

So it seems based on the information I've received, fair health has been ~15% higher than what providers (new grads and established clinics) are getting in practice. I'd be very curious how this extrapolates to San Francisco where Fair Health indicates $580 per follow up or 1160 per hour with two follow ups. I find it very hard to believe two follow ups in SF are generating $900/hr, but I can't imagine the actual rate to be 50-60% or more off the Fair Health quoted rate... so still a phenomenal rate!

 

[painballer27]

So psychiatrists taking insurance are making between 700 and 1000 dollars per hour. Thats pretty awesome

 

[Zyprexa100]

Aren't there companies they will get you paneled and negotiate for you in return for a cut?

Not to my knowledge. They only do credentialing.

 

[BiscoDisco]

Not to my knowledge. They only do credentialing.

Could have sworn I've heard people on this board talk about it and how these companies at times can get you better rates than you can get yourself. Other times not so much, soand often based on geography. I wish someone remembered what this was.

 

[dl2dp2]

So psychiatrists taking insurance are making between 700 and 1000 dollars per hour. Thats pretty awesome

Not really. You are confusing gross with net. I would take that number and chop it by 30%. And this is the NET productivity generated in an inefficient institutional setting that takes insurance.

But yes, in network reimbursements are going up, and especially if you don't care where you live you can get a base salary of 350k+ fairly easily these days. 400k+ can be done. This implies that the gross is 600k+. I think the median productivity of a psychiatrist in an institutional setting is close to 1M.

 

[BiscoDisco]

Not really. You are confusing gross with net. I would take that number and chop it by 30%. And this is the NET productivity generated in an inefficient institutional setting that takes insurance.

But yes, in network reimbursements are going up, and especially if you don't care where you live you can get a base salary of 350k+ fairly easily these days. 400k+ can be done. This implies that the gross is 600k+. I think the median productivity of a psychiatrist in an institutional setting is close to 1M.

I always wonder about this when people throw out gross vs net take home. Oftentimes a flat percent is given as a reasonable amount to subtract to predict net pay.

Certainly some percentage are fixed like using a biller and their take. But when you calculate rent and other overhead expenses, the majority do not scale with your revenue. 30% overhead on $300k is significantly less than overhead on $800k. I have a hard time seeing an extra 150K overhead with that increased revenue figure.

 

[dl2dp2]

I always wonder about this when people throw out gross vs net take home. Oftentimes a flat percent is given as a reasonable amount to subtract to predict net pay.

Certainly some percentage are fixed like using a biller and their take. But when you calculate rent and other overhead expenses, the majority do not scale with your revenue. 30% overhead on $300k is significantly less than overhead on $800k. I have a hard time seeing an extra 150K overhead with that increased revenue figure.

Oh, I agree 100%. But this is not how institutions work. As I've said many times, in my own practice, effective overhead is VERY low. But, this kind of point will be lost on non-profit admin, because, that extra 150k gets taken away to pay for "other administrative overheads" ("strategic initiatives", admin salary, DEI training, paid leave of others, etc) that sort of thing.

In a for-profit organization, it's pretty straightforward--that 150k gets paid out as the owner's dividend amongst partners.

When you have a small practice, you can try to calculate exactly the overhead incurred by each partner and compensate through a purely production-based model. However, when you work for a large system, nobody will do this math for you, and they will just give a random number ("30%") as a "standard practice". You take it or leave it. If they can't find someone they'll incrementally increase salary until they do and admits a lower profit margin.

As I said MANY MANY MANY times before, when you are hired by a facility, salary is STRICTLY determined by market demand (and some other unrelated items, like budget allowance). Productivity incentives are window dressings that create the illusion that the more you work the more you make. Many high-level admins don't even know how much certain clinical divisions actually generate, and as someone who's privy to the books, I can tell you that the numbers can *shock* you. Think about it, if you run a division and your boss gives you 2M to staff a team, and in reality the division gross 10M a year, would he ever tell you? How much would he have to pay you to keep you? LMAO.

 

[BiscoDisco]

Oh, I agree 100%. But this is not how institutions work. As I've said many times, in my own practice, effective overhead is VERY low. But, this kind of point will be lost on non-profit admin, because, that extra 150k gets taken away to pay for "other administrative overheads" ("strategic initiatives", admin salary, DEI training, paid leave of others, etc) that sort of thing.

In a for-profit organization, it's pretty straightforward--that 150k gets paid out as the owner's dividend amongst partners.

When you have a small practice, you can try to calculate exactly the overhead incurred by each partner and compensate through a purely production-based model. However, when you work for a large system, nobody will do this math for you, and they will just give a random number ("30%") as a "standard practice". You take it or leave it. If they can't find someone they'll incrementally increase salary until they do and admits a lower profit margin.

As I said MANY MANY MANY times before, when you are hired by a facility, salary is STRICTLY determined by market demand (and some other unrelated items, like budget allowance). Productivity incentives are window dressings that create the illusion that the more you work the more you make. Many high-level admins don't even know how much certain clinical divisions actually generate, and as someone who's privy to the books, I can tell you that the numbers can *shock* you. Think about it, if you run a division and your boss gives you 2M to staff a team, and in reality the division gross 10M a year, would he ever tell you? How much would he have to pay you to keep you? LMAO.

Yeah fair points. As someone who is purely looking at starting private practice with potential to maybe add on a mid level or two and a couple therapists as I grow, my mind is always on the overhead in this type of setting. Truthfully I know very little about how things work in bigger organizations.

But as far as private practice goes, with the move to tele, I'm envisioning something like 15% overhead (including billing cut) on 500k. With appropriate corporate deductions, I'm also seeing a scenario where this type of set up will be tough to beat in any shape or form by ever going to work for an institution.

 

[TexasPhysician]

Yeah fair points. As someone who is purely looking at starting private practice with potential to maybe add on a mid level or two and a couple therapists as I grow, my mind is always on the overhead in this type of setting. Truthfully I know very little about how things work in bigger organizations.

But as far as private practice goes, with the move to tele, I'm envisioning something like 15% overhead (including billing cut) on 500k. With appropriate corporate deductions, I'm also seeing a scenario where this type of set up will be tough to beat in any shape or form by ever going to work for an institution.

Avg billing company will take 5% = $25k
1 staff member minimum = $40k+
Yearly rent in my area to house 1 physician and 1 staff = $36k+

That’s 20%+ overhead and we just got started. It adds up.

 

[painballer27]

Out of network NYC was 730 for 214 + add on. In network was 370.

So 99214 + 90833 reimbursing 350 lets say. 12 pts a day (reasonable), 4.5 days a week, 47 weeks a year = 888,300. Less 30% overhead = $621,810 NET.

Bring on 2 GOOD NPs seeing the same volume, pay them each 160k (generous) and that increases your Net income by $1,019,620 assuming overhead remains a fixed percentage which it most likely will not. This leaves the psychiatrist with $1,641,430 per annum while taking 5 weeks of vacation and half days off on friday. I think this would be good and reasonable remuneration.

What do you guys think?

 

[TexasPhysician]

So 99214 + 90833 reimbursing 350 lets say. 12 pts a day (reasonable), 4.5 days a week, 47 weeks a year = 888,300. Less 30% overhead = $621,810 NET.

Bring on 2 GOOD NPs seeing the same volume, pay them each 160k (generous) and that increases your Net income by $1,019,620 assuming overhead remains a fixed percentage which it most likely will not. This leaves the psychiatrist with $1,641,430 per annum while taking 5 weeks of vacation and half days off on friday.

What do you guys think?

I’m not familiar with NYC rates or cost of living adjustments right now. $350 per 99214 + 90833 is not happening in my state in private practice for any insurance. Not close.

 

[painballer27]

I’m not familiar with NYC rates or cost of living adjustments right now. $350 per 99214 + 90833 is not happening in my state in private practice for any insurance. Not close.

What does your best insurance pay?

 

[TexasPhysician]

What does your best insurance pay?

$230 but average would be <$200. Talking to some other private clinics within 150 miles, my rates are quite good.

 

[BiscoDisco]

Avg billing company will take 5% = $25k
1 staff member minimum = $40k+
Yearly rent in my area to house 1 physician and 1 staff = $36k+

That’s 20%+ overhead and we just got started. It adds up.

With a tele hybrid model, I don't see why you couldn't rent an office one to two days a week. Not sure where you're practicing, but at least in big cities with a plethora of therapy office space you're getting a hundred bucks a day... So call it 800 bucks a month or $9,600 a year. Also not sure how much you're paying staff, but 25 bucks an hour at 30 hours a week is 35k a year. So a bit under 15% at 500K revenue. Increase that revenue by a couple hundred k and you're approaching 10-12%

 

[painballer27]

$230 but average would be <$200. Talking to some other private clinics within 150 miles, my rates are quite good.

Oh. Well I ran the numbers again using $190 for 214 with add on and if you had a set up like the one I described above you would be making around 750K per annum, which is fairly healthy I think.

 

[Atreides]

I find it very hard to believe two follow ups in SF are generating $900/hr, but I can't imagine the actual rate to be 50-60% or more off the Fair Health quoted rate... so still a phenomenal rate!

I figured out how to see what patients were being billed on Epic. Where I did fellowship (in the Bay Area), they were indeed getting paid over $500/hour for a 99214 + 90833 encounter. It came out to a little under $1200/hour on average.

 

[painballer27]

I figured out how to see what patients were being billed on Epic. Where I did fellowship (in the Bay Area), they were indeed getting paid over $500/hour for a 99214 + 90833 encounter. It came out to a little under $1200/hour on average.

Wow! What a rate! You could make 7 figs easily with those kinds of rates. Wow!

 

[TexasPhysician]

With a tele hybrid model, I don't see why you couldn't rent an office one to two days a week. Not sure where you're practicing, but at least in big cities with a plethora of therapy office space you're getting a hundred bucks a day... So call it 800 bucks a month or $9,600 a year. Also not sure how much you're paying staff, but 25 bucks an hour at 30 hours a week is 35k a year. So a bit under 15% at 500K revenue. Increase that revenue by a couple hundred k and you're approaching 10-12%

I won’t speak for all markets, but maybe this is possible if you don’t plan to scale and have 5-10 years for slow growth. Most patients do not want to start virtual. If they did, there are dozens of large companies pushing for that ad space. You’ll have more expensive patient acquisition costs. I’ve consulted for psychiatrists trying to do this after trying it their way without getting phone calls.

If you try to minimize ad costs and improve growth, you’ll be in the office most days for the first few years. With Ryan Haight returning soon, evals will need 1x in person for controlled meds anyway.

Finding a good reliable staff for $35k/year isn’t easy. Expect to churn and train staff on a fairly regular basis. I pay more than that in a low cost of living area and I’ve brought on 3 staff in the last 6 months. Starbucks near me pays $20/hr, offers health plans, and provides free college tuition. I probably have an extra staff member than I need, but someone is routinely sick or their child is sick or vacation or whatever. 1 staff means you’ll do the training every new hire. When someone walks out, you’ll spend 1-2 weeks doing everything yourself until you can find someone else. Expect hours of time lost to get them up on the EMR, phone system, PA’s, etc.

If virtual, how will you ensure they are greeting staff properly, returning messages, actually working, etc? It’s all time on your end.

Training patients to schedule online or at time of appointment, transitioning them to tele, having patients ok with delays in message responses/lack of real time staff answering phones, etc takes time. You’ll lose patients over this.

Now in 5-10 years in a solo practice you can probably get the right patient mix, a fairly decent staff, and few new evals to generate these numbers.

 

[TexasPhysician]

Oh. Well I ran the numbers again using $190 for 214 with add on and if you had a set up like the one I described above you would be making around 750K per annum, which is fairly healthy I think.

$750k/year including 2 NP’s? Don’t forget that unless you are physically in the office, NP reimbursement is less than MD. It’ll take years to generate enough follow-ups to fill this schedule.

 

[painballer27]

$750k/year including 2 NP’s? Don’t forget that unless you are physically in the office, NP reimbursement is less than MD. It’ll take years to generate enough follow-ups to fill this schedule.

Yeah 750K with the NPs work included, paying them each 160K. I did not know you had to be physically in the office supervising to get the same reimbursement but I think it would still work.. If I wasn't seeing patients I could just be there looking at real estate investments or watching Netflix while they work. Yeah I imagine this would take a while to build up

 

[calvnandhobbs68]

I won’t speak for all markets, but maybe this is possible if you don’t plan to scale and have 5-10 years for slow growth. Most patients do not want to start virtual. If they did, there are dozens of large companies pushing for that ad space. You’ll have more expensive patient acquisition costs. I’ve consulted for psychiatrists trying to do this after trying it their way without getting phone calls.

If you try to minimize ad costs and improve growth, you’ll be in the office most days for the first few years. With Ryan Haight returning soon, evals will need 1x in person for controlled meds anyway.

Finding a good reliable staff for $35k/year isn’t easy. Expect to churn and train staff on a fairly regular basis. I pay more than that in a low cost of living area and I’ve brought on 3 staff in the last 6 months. Starbucks near me pays $20/hr, offers health plans, and provides free college tuition. I probably have an extra staff member than I need, but someone is routinely sick or their child is sick or vacation or whatever. 1 staff means you’ll do the training every new hire. When someone walks out, you’ll spend 1-2 weeks doing everything yourself until you can find someone else. Expect hours of time lost to get them up on the EMR, phone system, PA’s, etc.

If virtual, how will you ensure they are greeting staff properly, returning messages, actually working, etc? It’s all time on your end.

Training patients to schedule online or at time of appointment, transitioning them to tele, having patients ok with delays in message responses/lack of real time staff answering phones, etc takes time. You’ll lose patients over this.

Now in 5-10 years in a solo practice you can probably get the right patient mix, a fairly decent staff, and few new evals to generate these numbers.

Yeah I think, as usual, people pull some numbers and get dollar signs in their eyes without realizing all the work that goes into hiring and retaining office staff.

Absolutely, it's not exactly easy to find reliable (will show up to work every day), trustworthy (will not go gossiping about psychiatric patient's lives/sharing protected health information), decently educated (enough to figure out how to run copays/deductibles, answer phones appropriately, organize/coordinate a front office space), nice (so they don't piss off patients), patient (so they don't get pissed off when patients inevitably yell at them) office staff.

Larger offices are constantly dealing with staff attrition and turnover, which is why they tend to try NOT to run as lean as possible so the whole place doesn't get thrown to shambles organizationally when someone quits on the spot one day. This has happened to the office I'm in this year...front desk person emailed saying "not coming back ever, peace". Everything didn't fall apart because there's redundancy but just shows what could hit you when you show up to work one day. Imagine having an office manager/secretary tuesday and then wednesday with a full day of patients you show up to a voicemail that he/she quit....yeah.

If you don't have any redundancy, plan on dealing with all the stuff noted above.

 

[Atreides]

Wow! What a rate! You could make 7 figs easily with those kinds of rates. Wow!

LOL, the doctors aren't getting that much, that's what the hospital gets. The psychiatrists are making a little under 300k I believe.

In private practice, the rates I've been offered are closer to $150 for a 99214 + 90833. I was able to negotiate one insurance up to $250 for a 99214 + 90833. Signed the contract but haven't heard back from them since, hopefully it's still moving forward.

 

[dl2dp2]

So 99214 + 90833 reimbursing 350 lets say. 12 pts a day (reasonable), 4.5 days a week, 47 weeks a year = 888,300. Less 30% overhead = $621,810 NET.

Bring on 2 GOOD NPs seeing the same volume, pay them each 160k (generous) and that increases your Net income by $1,019,620 assuming overhead remains a fixed percentage which it most likely will not. This leaves the psychiatrist with $1,641,430 per annum while taking 5 weeks of vacation and half days off on friday. I think this would be good and reasonable remuneration.

What do you guys think?

I know the economics of this very well—know multiple practice owners. No it doesn’t work this way. When you have 2 full time NPs and full clinical schedule you will need at least 1 day a week to do admin. Probably more. Billing rate of $700 per hour does not mean collected revenue of $700. Typically there’s a chop there. And there’s a ramp up of a few years so it’s not a fresh grad situation. $700 per hour billing rate is also I think unrealistic for most non-hospital based practices. $400 more typical.

Interestingly, it seems that there’s a scaling barrier limit, and even very successful psychiatrists can’t scale up that quickly. I think it has to do with how many intakes one could realistically take in a week. Typically if you are fairly driven I’m seeing PP psychiatrists getting to this level around mid 40s. You would start hitting ~ 800k EBITA with no owner salary draw into late 40 early 50 and crack 1M in your mid 50.

Again, this is not common and takes a lot of work. If it’s so easy everyone would do it. Very few psychiatrists retire with a practice group of more than a handful of employees. There’s a huge attrition rate and hard to hire. Valuation of these practices are also not very high typically 0.5-1X top line. So you spend your life build a practice which in the end is worth like 2 years of salary.

None of this is trivial to do, which is why you see a salary distribution median around 280k.

 

[BiscoDisco]

I won’t speak for all markets, but maybe this is possible if you don’t plan to scale and have 5-10 years for slow growth. Most patients do not want to start virtual. If they did, there are dozens of large companies pushing for that ad space. You’ll have more expensive patient acquisition costs. I’ve consulted for psychiatrists trying to do this after trying it their way without getting phone calls.

If you try to minimize ad costs and improve growth, you’ll be in the office most days for the first few years. With Ryan Haight returning soon, evals will need 1x in person for controlled meds anyway.

Finding a good reliable staff for $35k/year isn’t easy. Expect to churn and train staff on a fairly regular basis. I pay more than that in a low cost of living area and I’ve brought on 3 staff in the last 6 months. Starbucks near me pays $20/hr, offers health plans, and provides free college tuition. I probably have an extra staff member than I need, but someone is routinely sick or their child is sick or vacation or whatever. 1 staff means you’ll do the training every new hire. When someone walks out, you’ll spend 1-2 weeks doing everything yourself until you can find someone else. Expect hours of time lost to get them up on the EMR, phone system, PA’s, etc.

If virtual, how will you ensure they are greeting staff properly, returning messages, actually working, etc? It’s all time on your end.

Training patients to schedule online or at time of appointment, transitioning them to tele, having patients ok with delays in message responses/lack of real time staff answering phones, etc takes time. You’ll lose patients over this.

Now in 5-10 years in a solo practice you can probably get the right patient mix, a fairly decent staff, and few new evals to generate these numbers.

Perhaps I'm too optimistic, I'm not sure. I also don't mean to suggest I know more about this than you as I know you do this and I'm just finishing up residency. I will say, I worked in tech for several years before med school, eventually formed a start up and did that whole thing. I think I probably look at private practice set up through a different lens. Maybe I'm way off base but I'm hoping the combination of a niche sub specialty market and plan for a high quality referral base I'll actively work on building from day 0 will significantly cut back on that timetable you've listed. I've also got some ideas on how the business experience should feel to the customer which may alleviate other difficulties people have noted. Will be happy to do a sushi style practice journal to document the process of there is interest.

 

[BiscoDisco]

I figured out how to see what patients were being billed on Epic. Where I did fellowship (in the Bay Area), they were indeed getting paid over $500/hour for a 99214 + 90833 encounter. It came out to a little under $1200/hour on average.

Right but that reimbursement listed on fair health was without facility fee. Not sure if yours included that.

Based on that though, is imagine the private practice doc in SF is getting a pretty phenomenal insurance rate.. Even if it's not 1200 for two follow ups.

 

[trophyhusband]

Right but that reimbursement listed on fair health was without facility fee. Not sure if yours included that.

Based on that though, is imagine the private practice doc in SF is getting a pretty phenomenal insurance rate.. Even if it's not 1200 for two follow ups.

Even if it's without facility fee it still likely includes hospital system negotiated rates of 200-300% Medicare FFS for all specialist's E&M charges. You're not going to get those so ratchet down expectations. If you're getting 130% you're doing well and 150% you're doing excellently. Doesn't seem like most are getting much more than 100% (and a lot are being offered less than 100%) at first so as Random says you'll need to negotiate up as your panel builds.

And if you're in a market where insurers can mandate that you take Medicaid... well best of luck.

 

[AD04]

I worked in tech for several years before med school, eventually formed a start up and did that whole thing.

Why didn't you stay in tech? The opportunity cost of pivoting to medicine for you is huge.

 

[TexasPhysician]

Perhaps I'm too optimistic, I'm not sure. I also don't mean to suggest I know more about this than you as I know you do this and I'm just finishing up residency. I will say, I worked in tech for several years before med school, eventually formed a start up and did that whole thing. I think I probably look at private practice set up through a different lens. Maybe I'm way off base but I'm hoping the combination of a niche sub specialty market and plan for a high quality referral base I'll actively work on building from day 0 will significantly cut back on that timetable you've listed. I've also got some ideas on how the business experience should feel to the customer which may alleviate other difficulties people have noted. Will be happy to do a sushi style practice journal to document the process of there is interest.

Improving the experience correlates with increased expenses.

New evals take 2x+ the time, but they don’t reimburse much more than a follow-up. A new eval for 1 of the largest insurance companies pays less than a follow-up for my best insurance rate.

New evals per day directly effects burn out rate with many clinicians. When I hire someone, they often want a new eval cap per day. This is usually 3-4/day on the outpatient side. More and they quit relatively soon or won’t sign a contract to start. Most physician/counselor referral bases want the psychiatrist to see all new referrals before transitioning to a midlevel or they send their patients elsewhere. Some new evals don’t get their preferred med and leave. Some don’t need meds at all. Some move away, want a 2nd opinion, or just don’t like you/staff. Some refuse to transition to the NP and leave or slow your eval rate by keeping them.

Optimistically it is 1000+ evals to fill 1 NP with follow-ups using your numbers.

Building a referral base takes time. Most new clinics don’t have 4 evals/day. If you accept lower paying insurances (top 5 companies are in that), it will be achieved faster. Expect <$140/follow-up with a NP for these plans.

 

[painballer27]

So most private practice psychiatrists are making between 500k and 850k per year. That is excellent!

 

[BiscoDisco]

Why didn't you stay in tech? The opportunity cost of pivoting to medicine for you is huge.

Hate sitting behind a desk all day engaging in the corporate rat race. My own start up was doing well from a scale perspective but monetizing was hard and ultimately we ran out of runway and I needed a change.

Though for every high paying tech job there's 50 people fighting to get there. The path to medicine is so much more clear. I can pretty reliably strong together jobs to clear 500k next year after I graduate...for the vast majority that's a pipe dream in tech.

 

[AD04]

Hate sitting behind a desk all day engaging in the corporate rat race. My own start up was doing well from a scale perspective but monetizing was hard and ultimately we ran out of runway and I needed a change.

Though for every high paying tech job there's 50 people fighting to get there. The path to medicine is so much more clear. I can pretty reliably strong together jobs to clear 500k next year after I graduate...for the vast majority that's a pipe dream in tech.

I have huge respects for entrepreneurs. Mine never ran out of money because I bootstrapped it but I scrapped it once my time was making more money in other endeavors. I didn't do much to scale it.

Given your background, I think you can meet or exceed your target.

 

[BiscoDisco]

I have huge respects for entrepreneurs. Mine never ran out of money because I bootstrapped it but I scrapped it once my time was making more money in other endeavors. I didn't do much to scale it.

Given your background, I think you can meet or exceed your target.

That's great. I'm sure that experience has been invaluable to you. It feels like it has been to me.