Private Practice

Information and Resources related to Private Practice 

To put it simple. It’s a jungle out there! I started to go into private practice because of the instability of healthcare in general. I also like adventures so I created an area dedicated to the cause. First, here’s an overview of the some reasons a provider might consider starting a private practice, along with the pros and cons:

Top 10 Reasons for Starting a Private Practice

  1. Autonomy in Practice: You have full control over clinical decisions, policies, and how you provide care, free from the constraints of hospital or clinic protocols.
  2. Higher Earning Potential: Running your own practice allows you to determine your fee schedules and negotiate directly with insurance companies, potentially leading to increased income.
  3. Flexible Schedule: You set your own hours, offering greater control over work-life balance and the ability to accommodate personal needs.
  4. Customized Patient Care: You can tailor services to meet the needs of specific populations, such as underserved communities, adolescents, or veterans.
  5. Specialization Opportunities: Private practice allows you to focus on your preferred niche (e.g., trauma, mood disorders, addiction) without needing approval from larger organizations.
  6. Building Long-Term Relationships: A smaller, more intimate practice fosters deeper connections and continuity of care with patients.
  7. Innovative Therapies: Freedom to implement cutting-edge treatments (e.g., ketamine therapy, telepsychiatry, or integrative psychiatry) without lengthy administrative approval.
  8. Brand and Identity Creation: You can establish your own professional identity and brand, promoting a personal vision of care and services.
  9. Community Impact: Your practice can address mental health care gaps in underserved areas, making a direct impact on the community.
  10. Professional Growth: Managing a practice builds business acumen, leadership, and operational skills beyond clinical expertise.

Providers also have to consider if the benefits outweighs the risks to have their own practice. Preferably before starting the practice:

Pros and Cons of a Private Practice

Pros

  1. Financial Rewards: Increased income potential and control over expenses.
  2. Professional Independence: No micromanagement or institutional interference.
  3. Personal Fulfillment: Ability to see tangible results from your direct efforts.
  4. Tailored Environment: Creating a workspace that reflects your values and preferences.
  5. Opportunities for Innovation: Implementing new ideas and treatments quickly.
  6. Enhanced Patient Satisfaction: Offering personalized care increases client trust and loyalty.

Cons

  1. Financial Risk: High startup and operational costs, including rent, equipment, and liability insurance.
  2. Administrative Burden: Managing billing, licensing, marketing, and staffing takes time and resources.
  3. Initial Instability: It can take months or years to build a stable client base.
  4. Legal and Regulatory Challenges: Navigating compliance with state laws, HIPAA, and insurance requirements can be complex.
  5. Isolation: Solo practice can feel isolating without colleagues for consultation or support.
  6. Unpredictable Income: Earnings fluctuate depending on patient load and reimbursement rates.
  7. Limited Time for Non-Clinical Work: Balancing patient care with running a business can be exhausting.
  8. Marketing Responsibility: Attracting and retaining clients requires effective branding and outreach.
  9. Competition: Competing with established practices and healthcare organizations for patients and referrals.
  10. Burnout Potential: Balancing clinical work, business management, and personal life can be overwhelming.

Let’s Talk Numbers!

After being in practice for a year, I can agree that these numbers are pretty accurate. I plan on having a physical office, but it’s as needed by the hour, so it’s super affordable but that’s rare! A regular physical office, can be significantly more expensive, thus requiring MORE precautions. I know someone who’s going to file bankruptcy due to poor planning. He just assumed patients would be pouring in, therefore, it’s best NOT to quit the day job, until there’s a consistent profit and you truly have a reliable major caseload.

Virtual Private Practice Costs 

Estimated Cost Range: $5,000–$15,000 (startup costs)
Ongoing Costs: ~$1,000–$3,000/month

An Example of Itemized Expenses 

  • Licensing & Certifications:
    • State license renewal: $200–$500/year
    • DEA registration (if prescribing): $888/3 years
  • Telehealth Platform Subscription: $50–$300/month
    • Examples: Doxy.me, SimplePractice, or Zoom for Healthcare
  • Electronic Health Record (EHR): $100–$300/month
    • Examples: TherapyNotes, Kareo, or SimplePractice
  • Liability Insurance: $500–$2,000/year
  • Business Registration & Permits: $100–$1,000
    • LLC setup, EIN application, or other state-specific requirements
  • Website Design & Hosting: $500–$3,000 (setup) + $20–$50/month hosting fees
  • Marketing & Advertising: $500–$2,000
    • Social media ads, Google ads, or professional branding
  • HIPAA Compliance Tools: $100–$500/year
    • Secure email, fax, and document storage
  • Office Equipment: ~$1,000
    • Laptop, webcam, microphone, and reliable internet connection
  • Professional Memberships: $150–$500/year
    • Examples: American Psychiatric Nurses Association (APNA) or local associations

Advantages of Virtual Practice:

  • Lower upfront and ongoing costs
  • Flexibility to work from anywhere
  • Easier to scale for telepsychiatry services

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Physical Medical Office Costs 

Estimated Cost Range: $20,000–$100,000 (startup costs)
Ongoing Costs: $5,000–$15,000/month

An Example of Itemized Expenses 

  • Office Space Lease: $1,500–$6,000/month (depending on location and size)
    • Deposit: ~$3,000–$12,000 upfront
  • Office Furnishings: $5,000–$15,000
    • Desks, chairs, exam tables, waiting room furniture
  • Medical Equipment: $2,000–$10,000
    • Blood pressure cuffs, scales, laptops, etc.
  • Electronic Health Record (EHR): $100–$300/month
  • Liability Insurance: $2,000–$5,000/year
    • Includes general liability and malpractice insurance
  • Utilities: $500–$1,000/month
    • Electricity, water, internet, and phone
  • Staff Salaries: $3,000–$10,000/month
    • Receptionist, billing specialist, or medical assistant
  • Business Registration & Permits: $500–$2,000
  • Marketing & Advertising: $1,000–$5,000 upfront
    • Flyers, business cards, signage, and local ads
  • Medical Waste Disposal: $50–$200/month

Advantages of Physical Office:

  • Enhanced legitimacy and patient trust
  • Greater ability to provide in-person services
  • Potential to collaborate with other professionals

I have this little saying that goes, I’m gracefully bowing out. Sometimes, despite our best efforts, things don’t go as planned, and it’s necessary to move on to prevent worsening circumstances. If the risks consistently outweigh the benefits, especially without a clear timeframe for improvement, a permanent closure might be the more practical decision:

10 Common Reasons for Closing a Practice

  1. Financial Challenges: Insufficient revenue due to low patient volume, high operational costs, or poor insurance reimbursement rates.
  2. Burnout: Emotional exhaustion from managing both clinical and administrative responsibilities.
  3. Work-Life Balance: Difficulty maintaining a healthy balance between personal life and professional obligations.
  4. Regulatory or Legal Issues: Challenges with compliance, licensing, or changes in state or federal laws affecting practice rights.
  5. Market Saturation: Intense competition from other mental health providers or larger healthcare systems.
  6. Relocation: Moving to a different geographic area where maintaining the practice is no longer feasible.
  7. Health Concerns: Physical or mental health issues impacting the ability to provide consistent care.
  8. Retirement or Career Shift: Transitioning out of clinical work to pursue teaching, consulting, or other roles.
  9. Lack of Support: Difficulty finding and retaining staff or dealing with administrative burdens alone.
  10. Change in Professional Goals: A shift in focus or desire to work in a collaborative or team-based environment rather than independently.

🛑 A General Criteria to Consider for Closure 🛑

  • Financial Viability: Monthly revenue consistently fails to cover expenses despite efforts to increase patient volume or cut costs.
  • Patient Demand: Declining patient numbers or inability to fill the schedule over time.
  • Burnout or Stress: Persistent feelings of overwhelm or dissatisfaction with the practice.
  • Impact on Quality of Care: Inability to maintain the standard of care due to resource constraints or personal challenges.
  • Regulatory Compliance Issues: Inability to meet new licensing, insurance, or reporting requirements.
  • Exit Strategy: A clear plan for transition, including notifying patients, transferring care, and meeting ethical/legal obligations.

Closing a private practice is often a difficult decision, but it’s important to prioritize personal well-being, professional ethics, and patient continuity of care.

Additional Information and Resources 

While starting a private practice as a PMHNP offers unparalleled freedom and potential for growth, it requires careful planning, a tolerance for risk, and a strong support network. Balancing the rewards with the challenges is key to long-term success. Here’s an area where I’ll be listing more resources:

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