July 25, 2022

Building Your Private Psychiatry Practice: Foundational Steps (Part-1)

Written by

Carlene MacMillan, MD

In her series, The Practice Playbook, psychiatrist Dr. Carlene MacMillan shares insights & best practices designed to help you start, grow, and run your mental health practice.

Deciding to “hang a shingle” and start a private psychiatry practice can feel daunting. 

Questions arise like: “Where should I see patients?”, “how do I protect myself legally?”, and “how do I start and grow a profitable practice? I didn’t go to business school!”

Have a seat on the couch. You’re in the right place. 

In our new “Building Your Private Practice” series, The Practice Playbook will follow along with adult and child psychiatrist, Dr. Robert Dugger, as he opens his brand new practice, Sarasota Minds

When Dr. Dugger prepared to open his doors to patients for the first time, he took a number of key steps to lay a foundation for success. 

In pt. 1 of our series, we’ll cover 4 crucial steps to take when starting a new practice:

The very first thing to do, long before starting a private practice, is to anticipate ahead of time if this may be something you want to do. 

Dr. Dugger always knew he eventually wanted to be his own boss, control his schedule, and treat patients that make his work feel energizing.

He started preparing to launch his private practice 2 years ago, right after he accepted his first position out of training.

If he hadn’t read the fine print in his contract positions, he may have had to delay his dreams.

1) Beware of Non-Compete Clauses

Then it is crucial to ensure when negotiating any contracts for jobs that there are no non-compete clauses (also known as restrictive covenants) that would preclude you from doing so within the next several years, including after leaving the position. 

Working with a great healthcare employment attorney proactively can prevent costly and painful legal entanglements later. 

If you live or work in a state where these clauses are legal, keep in mind you can negotiate with an employer to make them as specific and limited as possible so that the employer ensures your private practice does not encroach on their business goals. 

Non-compete terms often start very broad and favor the employer. That’s where counsel can help craft language that both parties are comfortable with. 

2) Keep Your Day (or Night Shift!) Job

Myth: You have to quit your job, burn the ships, and jump headfirst into the uncertain waters of entrepreneurship to build a private practice.

Truth: You can start part-time and on the side. 

In fact, most Psychiatrists keep a day (or night) job to pay the bills while they grow their private practice.  

The benefits of starting part-time are many:

  • Reduce the risk of “needing to make your business work from day 1.”
  • Diversify and increase your income streams.
  • Keep your skills sharp across multiple or specialized populations.

When I just started my practice out of residency, this meant working as an inpatient attending and having one evening a week for private practice at a subleased office. 

For Dr. Dugger, this meant taking emergency room psychiatry shifts via telehealth. 

“I’m finding that I want more of a balance…I can take private pay patients one day a week and that will be the equivalent of more than half my paycheck for working three 12-hour shifts. I also want something to call my own,” he noted. 

Insurance matters:

In addition to diversified income streams, working in a variety of settings with different patient populations keeps one’s clinical skills sharp and allows psychiatrists to treat insurance-based patients in hospital settings, but not necessarily in their private practice. 

Keep in mind that some insurance contracts are not location-specific.

Check with the credentialing office at the hospital where you are credentialed, as well as with the payers themselves, to ensure that you would not be obligated to accept a certain insurance in your private practice that you accept at the hospital. 

Conversely, just because you are on an insurance panel for a hospital or telehealth gig, that doesn’t necessarily mean your private practice is automatically included should you want to take that insurance there—It really varies from payer to payer. 

Should you want to leave your “day job” to start a private pay outpatient practice, be sure to resign in writing from any insurance panels they have credentialed you with to avoid any confusion.

3) Invest in a Lawyer, Not a Website Designer

Being your own boss means wearing many hats you didn’t go to school for:

  1. Business and clinic administration and operations
  2. Growing your practice, which often includes a website and digital marketing.
  3. Protecting yourself and your business legally.

Getting up to speed can feel daunting, but there are tons of free and low-cost resources for getting started.  

Still, you shouldn’t do it all yourself. 

If you have to choose between investing in a lawyer or a web designer, choose the lawyer. 

Just as Dr. Dugger recommends having an employment lawyer look over any employment contracts, he says investing in a healthcare attorney to assist with structuring your practice and ensuring all paperwork for patients is compliant is a must. 

If your practice is out of compliance, your whole business (and potentially license) is at stake—so legal counsel is worth the expense.

But there is one expense Dr. Dugger suggests skipping: Spending a ton of money on a website designer. 

As he puts it, “I was quoted like $6000 [to build a website] and I’ve made a few PowerPoints in my time. So six weeks later, I am pretty proud of the website I put together!” 

Indeed, many clinicians get quoted very high rates to design practice websites.

Dr. Dugger says he was only design-inclined; he was the one making presentations look pretty in school.

But even if you have zero design or web skills, there are many website platforms that have built in templates—well suited for the needs of clinicians in private practice with no technical background. 

Dr. Dugger went with Wix; other popular vendors include companies like Squarespace and Weebly. Wordpress has a bit more of a learning curve, but is reportedly better for getting your website found on Google through Search Engine Optimization (SEO).

You can view his website and glean inspiration here.

Do private practice mental health clinicians really need a website?

Some mental health clinicians find themselves asking if they even need a website, particularly if they are practicing in an area with a major shortage of psychiatrists/Psych NPs. 

My answer to this question is a resounding “Yes!” 

Aside from marketing, a website also allows you to share logistical information about your practice’s services, communication channels, and policies. 

For example, for clinicians like Dr. Dugger who use Osmind as their EHR, a practice website can contain a landing page that goes into detail about the Osmind patient app and how measurement-based care is used in his practice thanks to it. Osmind even provides a handy template that can be customized for these landing pages. 

4) Lean on your Mentors and Peers

Going out on one’s own does not mean you are alone. 

There are many ways to remain connected with colleagues to share learnings about the business side of running a practice, as well as to participate in peer supervision. 

In addition, having mentors who have been through the process of running a private psychiatry practice can be an invaluable resource. 

Mentors can be residency supervisors who have private practices or colleagues you meet through other professional activities. 

Dr. Dugger recommends getting involved with the local branches of professional societies like the American Psychiatric Association and the American Academy of Child and Adolescent Psychiatry as well as finding online peer communities. At Osmind, we have launched a Practice Community for our EHR customers to help independent clinicians and practice administrators make these crucial connections.


Laying the foundation for your private practice can feel daunting, but use these tips to stay grounded and prepared:

  • Anticipate if you want to start a private practice (even part time) and read non-compete clauses for any jobs you take in the meantime
  • Start part-time on the side to test the waters. You may even want to contract for other private practices to get mentorship from Psychiatrists/Psych NPs who are a couple steps ahead of you.
  • Invest in a good lawyer; they’re worth every penny. Don’t sink a bunch of money into setting up a website. No-code platforms like Squarespace and Wix have great templates you can tweak to match your brand.
  • Find your tribe. Being a solo private practice owner can be lonely, especially in the beginning. Connect with like minded peers in your shoes or a couple steps ahead. 

In Part 2 of the Building Your Private Psychiatry Practice series, we’ll take a look at how Dr. Dugger has structured his practice to accept inquiries and referrals that are an appropriate clinical match. We will also look at how he is building in ways to be more efficient and comprehensive with his initial assessment, aided in part by the way the Osmind platform works.


About the author: Dr. Carlene MacMillan is Vice President of Clinical Innovation at Osmind. She is the founder of Brooklyn Minds Psychiatry, a multidisciplinary team-based, multi-site practice in New York City. Her practice was one of the first to offer deep TMS for OCD and esketamine for severe depression and suicidal thinking. Dr. MacMillan is an expert in mental health communities, with a large following on platforms including Clubhouse (@psychiatrist), where she champions awareness of evidence-based and innovative approaches in psychiatry. She is a member of the Ketamine Taskforce for Access to Safe Care and Insurance Coverage, and the Clinical TMS Society Insurance Committee. She is the Co-Chair of the American Academy of Child and Adolescent Psychiatry Consumer Issues Committee.

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