If you’re feeling constrained by the insurance-based model and dream of offering your patients better care in a way that expands your growth potential too, you’ve landed at the right place. I work with psychiatric providers just like you everyday – those who want complete autonomy over the kinds of patients they see, when they see them, and what they charge WITHOUT burning out. That’s the dream! And it’s not out of reach. I’m here to share three core strategies to help accelerate your successful, impactful, and lucrative cash-pay psychiatry private practice in 2023.
First a quick introduction. I’m Elana Miller, MD, and I’m an integrative psychiatrist and 2x cancer survivor passionate about combining Western medicine, Eastern wisdom, and holistic approaches to help people live fuller and happier lives. I also mentor psychiatrists on integrative psychiatry protocols and business strategies to be successful in cash-pay psychiatry practices.
Trust me, if you implement the strategies I share in this article you will avoid at least 75% of the mistakes I see when I’m coaching psychiatrists on how to start their practices (and by this point I’ve coached nearly 100, so I’ve really seen the most common mistakes).
The best strategies for creating a psychiatry practice actually come from the business world, not the medical world. It’s not that surprising because… I’m going to let you in on a little secret… doctors are generally not very good at business.
You can’t really blame us. We don’t learn any business or even finance really in medical school or residency – we learn how to treat patients. The problem is that many of the personality traits and skill sets that make us good clinicians – like perfectionism and conscientiousness – are actually our worst enemies in business. Nothing will hamstring you more in private practice than trying to be perfect right out of the gate.
As you’re reading this post I challenge you to shift into an entrepreneurial mindset. Put the prescription pad down and *figuratively* pick up your hammer. Let’s jump in and start building!
Strategy #1: Start with a Minimum Viable Practice, or “MVP”
First and foremost, the goal is to grow your practice sustainably – with maximal profit and minimal overhead.
Here’s what I mean:
I’m sure you’re envisioning all the possibilities of your cash-pay psychiatry practice – maybe a beautiful office with nice decorations and furniture, or a group practice, or even building a large wellness center with multiple providers. I love these visions, and you should hold on to them as inspiration. However, it’s important to remember that you don’t need to, and really shouldn’t, aspire to start there on day one.
There is an acronym, “MVP,” that comes from the startup world from a book by Eric Reiss called The Lean Startup. It stands for “minimum viable product,” so I adapted it from the startup world into “minimum viable practice.”
His thesis is that software companies make a massive mistake when they build complicated software solutions in advance of actually having any customers. Why? Because they build the wrong product. One that customers don’t actually care about or want, and when they release it to the world, no one buys. Instead, he advises, build the minimum viable version of your software solution. Get early adopters as customers (aka patients), and then iterate and improve based on their feedback.
You want to do a version of this in your practice. Start with a low overhead practice with the minimum tools needed to function, and then improve and optimize after. Once you have an established flow of patients and revenue, THEN you can make investments to grow and bring your dream vision to life.
This is how you establish a trajectory of sustainable growth. If you’re not profitable from week one, you’re doing it wrong.
I once knew of a colleague who was starting a practice, and she had this expansive goal in mind of what she wanted to do. She envisioned a comprehensive center that offered holistic care, with psychiatrists, therapists, coaches, dieticians, etc., a “one stop shop for patients.”
The problem was, she built it all out from day one. So she had a massive, expensive office, and multiple full time staff that she was paying salary and benefits to. And she didn’t have a single patient. And you know what? She didn’t get any, because it turns out her target market didn’t really care about having a one-stop shop for everything.
She was so consumed with creating the practice, that she didn’t spend any time or money on marketing to get patients in the door, or even speaking to her potential patients to figure out what they actually wanted. After losing tens of thousands of dollars over the first few months, she folded the practice. This happens WAY TOO often.
Please, please, please don’t make this mistake!!
What do I need to start a psychiatry private practice?
We have a massive advantage in starting a low overhead practice in psychiatry. We’re not starting dental practices or surgical practices where you need to spend $100,000 on equipment just to get started. We just need a chair, a computer, and we’re basically good to go. We have the advantage of being able to open our practices for minimal cost, so we should take advantage of that fact.
Check out my tele-psych set-up below. This is how I’ve been practicing for the last 4 years!
Start lean, mean, and scrappy. Be smart and practical with your expenses. When I say minimum, I mean it!
Minimum Viable Softwares & Set-Up
- Malpractice insurance
- An EHR with eprescribe capabilities (I like Luminello for now, but am waiting the edge of my seat for IntakeQ to launch their eprescribe capabilities this year)
- A phone number and professional email address (that is HIPPA complaint)
- A virtual fax number (because pharmacies don’t yet know it’s not 1995 anymore and WILL fax you things)
- A business bank account and merchant account so you can accept payment (aka credit cards)
Just as important, here are the things you DON’T need:
- A lawyer
- An accountant
- A fancy logo
- An expensive website that costs thousands of dollars (you can build your own version of a website on Squarespace)
- An office and admin assistant
- Anything that distracts you from actually getting patients in the door!
Trust me, if you can turn down the volume of your perfectionism you’ll be able to make progress faster and easier, and the practice you build will be based on feedback from your patients of what they need, which will be better for both you and them in the long run.
How much does it cost to start a psychiatry practice?
This is really dependent on your malpractice insurance, which softwares you invest in (quick tip: ALWAYS get multiple quotes for malpractice insurance, you can negotiate the rates), and how many office supplies you need up front.
Generally speaking, if you start with a cash-pay telepsychiatry practice (which is how I see patients 98% of the time) you should be able to operate at ~$500-1000/month, including the costs of malpractice insurance, software, and some budget for office supplies.
A quick financing tip as it relates to sustainable growth: you should know your overhead costs like the back of your hand so you know exactly how many patients you need to cover those costs, and your livability costs. We’re not just trying to make our money back, we also need enough to cover our cost of living, pay back loans, and save.
The advantage of being a cash-pay private practice provider is that you have complete control and autonomy over how much you charge and how many patients you wish to see, so there are a lot of scenarios you can play around with here. And it can be kind of fun!
Let’s say your overhead costs for your practice is $700, and your living expenses are $4,000 a month. So your livability number is $4,700 each month.
Now you can reverse engineer it – how much should you charge to sustain your livability? How many new patients would that require each month, and how many recurring patients?
This leads me to my next point, who are these patients and why would they want to see a cash-pay provider instead of someone in-network?
Strategy #2: Clarify Your Unique Selling Proposition (aka Your Secret Sauce)
A unique selling proposition, or USP, is another concept I’m borrowing from the business world. It’s a unique selling point or message that defines what makes a product or service different from, and better than, its competitors. It is a marketing concept that was first proposed in the 1950s by an advertising executive named Rosser Reeves.
So how does this apply to cash-pay psychiatrists?
Let’s say I’m a potential patient interested in your practice. A USP answers the question, Why should I choose you as opposed to any other psychiatrist, specifically another psychiatrist who would accept my insurance?
If you don’t define this for your patients, trust me, they will define it for you and on terms you don’t want. If you don’t differentiate yourself, you will essentially be a commodity – no matter how highly trained you are.
You’ll be like a cup of coffee from any Joe Smo coffee place down the street, and you don’t want to be any ol’ cup of coffee, you want to be Philz coffee. You want to be hand crafted, artisan coffee with art in the foam, and you want people to drive out of their way and pay double because your coffee is so good. As a cash-pay provider, this is a critical first step in your marketing strategy.
If you don’t differentiate yourself, you will attract the worst kinds of patients – those that are shopping based on cost, rather than value (essentially looking for the cheapest psychiatrist), or those looking for a psychiatrist who has no boundaries and will answer their calls at all hours and prescribe them as much Adderall and Xanax as they want.
Instead, you want to clarify your niche, deeply understand their problems, and position yourself as an expert with the knowledge and skills to solve their problems. This will make the marketing steps when you launch 1000x easier, because instead of trying to market to everyone that you do everything, you find your niche and speak to their struggles specifically and the unique solutions you offer.
How to Find Your Niche
It took me an embarrassingly long time to really understand what niche meant. I thought niche meant a problem, like anxiety or depression or PTSD, but those are just disorders. A niche is a group of people, like women in their 30s-40s who have anxiety. The reason that distinction is important is because a niche has many problems other than just their diagnosis, and when you understand what other service providers your niche goes to (you can think much bigger than just “therapists” – what about functional medicine docs? Or acupuncturists? Personal trainers?) it will give you infinite ideas of people you can network with to grow your practice.
Let’s find your niche by answering the questions below:
- Who is your dream patient? What’s their age? Gender? What is their profession? What are their common interests?
- What are the problems they’re struggling with?
- How do you solve their problems? What outcome do you provide them? (Because people pay for outcomes, not processes)
- What unique methods and frameworks do you use to provide them this outcome? What’s unique about the way that you practice psychiatry?
Then you’ll put it all together into a sentence or short paragraph that you feature on your website, at the very top, along with a photo, so with just a quick glimpse patients have a strong sense of who you are, what you do, and what you believe in.
Let’s use my USP as an example,
The first part, “ancient wisdom meets modern medicine” communicates that I’m not a typical psychiatrist that only prescribes medication, and that’s very appealing to my niche. The more you make your USP statement about the patient and what their desires and needs are, the better.
Your Lived Experience is Your Special Sauce
It’s okay to share personal aspects of your life on your website. In fact, I encourage it.
I don’t know about you, but when I was in residency training it was considered to be a bad thing to have personal experience in the area in which you were treating patients, as if it would lead to unchecked countertransference.
I remember when I was going through chemotherapy and was telling people I wanted to specialize in working with cancer patients, I was told I shouldn’t do that because it would hit too close to home.
Too close to home? Did they think I would just go through the rest of my life forgetting that I had cancer, and working with a cancer patient would suddenly remind me, and I would immediately lose the ability to think coherently or be helpful to my patients? I understand people were well-intentioned in their advice, but it was misguided advice, and I could not disagree more with the premise.
I mean, who would be better at providing psychiatric care for cancer patients than a psychiatrist who had done it herself and come through on the other side? Even my non-cancer survivor patients have told me they were attracted to me as a practitioner because while they may not be cancer survivors, they’ve experienced some sort of trauma or difficulty and felt that I would understand them and their experience, and I do.
Your lived experience is your special sauce, and don’t let anyone tell you otherwise. Patients love knowing that their providers are real human beings just like them. I have several mentees who share that they have patients gravitate to their practice because of a shared lived experience like religion, culture, trauma-informed, etc.
It also makes practicing more fun, more impactful, more joyful when you’re working with your favorite kinds of patients and using your unique skill set to really help them.
So lean into your uniqueness. It’s not a weakness, it’s a superpower.
Strategy #3: Meld Good Business With Good Medicine
As a cash-pay psychiatrist you are uniquely positioned to offer a level of care that just isn’t accessible in an insurance-based model, and it’s important to define what that will look like for you and your patients.
In my opinion there is a disease in the practice of psychiatry today, and it’s the siloing of mental health care between Western allopathic medicine and alternative medicine. A false dichotomy has been created between the Western and wellness communities that is perpetuated by both sides — and the victims are our patients.
From my vantage point, there seem to be very few providers in our field who truly appreciate the nuanced and complex nature of health and wellness, especially the role that relationship, framing and mindset play in psychiatric outcomes. Instead we have two groups who, at their extremes, seem indoctrinated and nearly incapable of thinking in shades of gray.
Patients don’t want to have to choose between two extreme viewpoints – either medication only from a psychiatrist or whatever they get from an alternative provider, rather than receiving care that is personalized and tailored to their unique needs and circumstances and that includes all modalities that can be helpful to them.
By providing integrative psychiatric care, you have the opportunity to become SO exceptionally valuable that patients are GLAD to pay you everything that you want to charge, and more.
What does it mean to practice integrative psychiatry?
Integrative psychiatry is not “green pharmacy,” or prescribing a supplement as opposed to a medication. I prescribe medication, AND I recommend complementary supplements.
It’s not functional psychiatry either. You can think of integrative psychiatry as a big circle that encompasses the overall holistic approach, and functional psychiatry as a subset of that – a small circle within integrative psychiatry.
Integrative psychiatry is a way of evaluating and treating patients from a holistic framework, one that respects patients’ belief systems and appreciates that good outcomes in our field come from good relationships between clinician and patient. It’s a philosophy rather than any one specific treatment modality.
Integrative psychiatry is,
- A way of assessing and treating a patient that encompasses ALL aspects of that person, mind, body, and spirit.
- Patient-centered, personalized care that is respectful of the patient’s belief system. We customize treatment plans based on what our patient believes will work, within reason.
- Treats patients as individuals, not as statistics — If the patient is telling you a different story than what you’ve read in a textbook or research study… listen to the patient, not the textbook!
A massive amount of the benefit we see from psychiatric interventions comes from the placebo effect. Have you ever seen a research study where the active treatment separated from placebo by 10%, but the placebo group had a 40% improvement? Why are we obsessing about the 10% and ignoring the 40%? Why are we not optimizing for that?
Integrative psychiatry is an evidence-informed approach to treatment
Now your question might be, this sounds interesting, but is it evidence-based? I would encourage you to ask a more nuanced question – is it evidence-informed?
When someone says, “that’s not evidence-based,” I want to ask them, can you be a little more specific? Are you saying there’s active evidence that it’s harmful? That there isn’t any evidence at all because it hasn’t been studied? That there’s evidence, but it’s mixed? Those are all very different things. And the next question becomes, if there’s no evidence, or the evidence is mixed, what is the risk?
An evidence-informed approach asks what are the potential benefits measured against the potential costs, whether toxicities, side effects, money, or time. Of course, interventions with higher potential costs, toxicity, or side effects should still require a higher burden of proof before being recommended.
On the other hand, interventions with low potential cost, toxicity or side effects shouldn’t require the same burden of proof. I don’t need a Cochrane review before recommending exercise for a patient, or meditation, or many low risk nutraceuticals, especially if a patient believes it will work (because then at least I’m leveraging rapport, relationship, and the placebo effect).
At worst, nothing will happen, at best, there will be some moderate benefit that I can layer on top of the benefits from medication.
Integrative psychiatry is not about extremes, but about wisdom, common sense, and restoring balance. An integrative provider has a unique skill set and opportunity to cross the chasm in a way that allopathic and naturopathic only providers can’t.
What’s possible for you
Now the upside to all of this for you, is that if you become one of those clinicians who’s skilled at operating in the middle – who can prescribe Prozac but also knows how to do therapy, to recommend evidence-informed supplements, to council your patients on nutritional and mind-body interventions, to do it all wisely and moderately – you will have an endless supply of patients, because there is a massive demand for this kind of psychiatry.
I started the Build Your Dream Integrative Psychiatry Practice mentorship program to help practitioners like you build impactful and successful cash-pay integrative psychiatry practices. I now support almost 100 people across the US (and a few globally, too) to achieve their private practice dreams. Being part of a community of like-minded individuals who are all working towards the same goal provides invaluable support and makes the process much less intimidating.
A few weeks ago someone in the program posted on our community forum asking everyone where they would like to be in a year from now, and here were some of their responses:
- “Full-time private practice, fully booked, enjoying my work and spending more time in my art studio”
- “Full time practice and hire NP or psychiatrist, baby makes it to 12mo unharmed, ditch moonlighting, revenue $350k”
- “Online private practice set-up to earn $200,000 in 10 hrs/wk so I can exit 1 of my current jobs; school debt finally paid off (after 20 years!); preparing for maternity leave”
- “Close my practice to new patients and shift focus on creating a group educational community for nurse practitioners. I hope my practice + group program will bring in my income goal of $300k+.”
The best part of this is that every single one of these responses came from someone who started their cash-pay practice within the last 12 months. A year ago from today, they were where you are now.
Ready to get started? Join my FREE Dream Practice School.
Enter your email below to get your exclusive invitation to join my new 6-step mini-course and community designed to teach you the fundamentals building your dream private practice.
By the end of the course you will have a crystal clear picture of what it means to be an integrative psychiatrist entrepreneur with your own practice – and how to make it happen. You’ll even get access to some of my protocols!
So here’s to a successful year for you – one in which your dream cash-pay psychiatry private practice comes to life.