Let's Talk Money! Part 1: Navigating The Financial Reality of Private Practice as an RD

Running a private practice as a registered dietitian isn't always the financial dream it's often made out to be.  At least not right away!

Get ready for a nuanced discussion on the complexities of running a private practice, from the challenges of insurance reimbursement rates to strategies for setting sustainable client loads. We’ll explore how to determine appropriate rates, manage expenses, and even the intricacies of running a group practice. Learn practical tips on balancing income, expenses, and quality care that you can apply to your own practice.  And stay tuned for part two, where I share ALL about my own revenue, profit, etc. while I read through my profit and loss sheets since 2020.

*Important Disclaimer: This podcast episode is for informational purposes only and does not constitute legal or financial advice. Please consult with a qualified professional for personalized guidance on your specific situation.*

Links Mentioned:

Profit First for Therapists - https://www.profitfirstfortherapists.com/
Calculator to Set Rates: TBD, still looking for one! :)

Want a question answered on the podcast? Send me a message, or a text message, and maybe it'll be featured in an episode!

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https://www.instagram.com/evahaldis_rd or https://www.instagram.com/rdtoceo

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For episode updates and coaching packages, check out our website - www.rdtoceo.com

Affiliate Links Often Mentioned:
Gusto for Payroll - https://gusto.com/h/eva6486
Practice Better- https://practicebetter.partnerlinks.io/evahaldis9298

*Please note that while we strive to provide valuable insights, our podcast is not a replacement for personalized legal or financial counsel. We strongly advise consulting with qualified professionals for specific advice tailored to your individual circumstances.*

Chapters

• 0:02 Navigating Money in Private Practice
• 12:56 Considerations for Private Practice Dietitians
• 18:21 Setting Rates and Managing Expenses

Transcript

Speaker 1: 0:02

Welcome to the RD to CEO podcast. I'm your host, eva Haldis, registered dietitian, who one day found herself a whole CEO of a business. Join me as we navigate the world of entrepreneurship so you can go from being an RD who sees clients in private practice to a confident CEO growing the practice of your dreams. Hi everyone, Welcome back to another episode of the RD to CEO podcast. I'm very excited for today's episode because I want to talk about money, and I'm excited because I wish I would have heard more stories about the realistic reality let's say, maybe realistic or just the actual reality of private practice and finances and making money as a registered dietitian, because this episode was actually inspired by well, it was inspired by a lot of things, but I decided to record it today after seeing an Instagram post from a business coach saying how they're outliving their best life while they're making multiple six figures. And it's so frustrating to see that because that business coach is likely making those multiple six figures from selling business to business and not actually business to client, like the people that they are selling it to. So I really wanted to actually hop on and talk a lot about money today. I want to talk about this idea of business to business versus business to client and how to really spot that out when you are maybe looking online or seeing folks post about money they're making when they're selling you something. And then I want to talk more about is being in private practice, or can being in private practice actually be profitable, and is group practice profitable? Will you make all this money if you start hiring and growing your team? There's a lot of considerations that are going to impact that, so we're really going to break that down.

Speaker 1: 2:09

I'm going to finish off by telling you more about the money that I've made in the last four years five years in practice. I actually have my QuickBooks pulled up. I pulled it up from 2020 to the end of 2023. I pulled it up from 2020 to the end of 2023. So really I'll talk about four years of income and break it down and explain and just be realistic about what's actually happening. And I hope it's helpful because I will say this comes up for me a lot in a lot of my whether it's therapy, business coaching or just talking with my husband or friends. This comes up a lot with my business coaching clients as well.

Speaker 1: 2:48

There's so much money, stuff that we all bring into being business owners. How can it not be right? I mean, we live in a capitalistic society and so money is required for us to live, and I think money is also a way that we've all been kind of told to measure our success, and so it can really bring up a lot. If you feel like you're not measuring up to that and that will be the episode today let's get right into it. So first let's talk about business to business versus business to client marketing that you'll see out there. This is something that's really important, because when I was first starting out in my private practice, I shared this on my first episode about my story and how I initially did not accept insurance. I took private pay clients only at the time, and I did end up first just really undercharging for myself because I was charging, I think, $80 for an initial session and a follow-up, and then I slowly went up to $110. Currently, our practice private pay cost is 135, but we do accept insurance and I would say probably 95% of our clients are insurance-based clients.

Speaker 1: 4:12

There's a lot of marketing out there around how to grow your nutrition business, whether that's an online business, whether it's a private practice, whether it's a business that maybe does groups and courses, and I think the level of money you can charge people is going to depend on, obviously, what you're offering. But the one thing that I will say a lot of business coaches do is they will talk a lot about how much money they are making and they are going to sell that image to you to that way that you see that and you're like, oh my God, I want to make that money too. They're making all this passive income. They're posting on Instagram and making all this money. I want to do that too, and so, of course, you're going to be excited about that and maybe you'll even start working with them. But I want to say I feel like a lot of the online coaches that we see for nutrition practices, when they are talking about the money they're making. I feel like that's kind of a red flag and this is really not to be. Like no shade out there to the nutrition coaches who are selling more of those big ticket items. It's no shade to you, and I'm sure there are dietitians who can go out and make big ticket items and sell in their actual nutrition business, but I find that whenever these coaches are out there talking all about the money they're making and the multiple six figures they're making. It is likely multiple six figures they are making from business to business coaching. They are selling that to other providers, other entrepreneurs, and they're able to charge more.

Speaker 1: 5:53

I charge way more for business coaching than I charge for my private practice clients and there's multiple reasons for that. One of those things is that as a business coach, you take on some levels of risk and responsibility of advising somebody about their business and money and other things. So there's a lot of level of work that we have to do one to be able to offer that advice and a lot of investments we make to be able to offer that advice. But also we are holding a lot of information for other business owners and so it's more of a different type of service, I would say, than a client-facing service. Also, it's not like we can charge insurance to do business coaching right and it's going to take a different level of time and it just makes it a little bit different.

Speaker 1: 6:43

The other thing that I feel like a lot of these online business coaches are doing is they're selling maybe bigger ticket items for groups and courses and, you know, a multi-level not to say multi-level, like MLMs, but like a different. You know they might be selling you not just like one-on-one coaching, but they're also maybe selling a group that you get to be a part of, like an online support group, like maybe on a Facebook group or through another online portal. They might be having different courses and webinars and things that they're offering in addition to providing that one-on-one support, if they are even really doing the one-on-one part of it. So they can really charge a lot and it might be for an extended period of time. It might be a package, it might come with all these other things, and that is going to be just so different than what we are going to be doing in private practice, right? I mean, it really depends on the type of client that you are working with and the kind of niche that you have around. You know, how do we sort of charge our worth, but also charge what makes sense for the service that we're providing and ultimately, most people are not out there ready to spend $1,000 to my practice to work on healing their relationship to food or their eating disorder. Maybe if we had a bunch of other things we were offering with that, sure, but that's really not the model I'm talking about, and this podcast in particular, is really about the private practices out there who are doing the one-on-one support, maybe also offering other parts of work in their private practice. But I think, when the online nutrition coaches who are selling this to you, I just want that to be something that you start to notice, because if your goal is to be in private practice, just be cautious of seeing that and thinking why aren't I making multiple six figures yet? Why am I not able to have all this passive income? It's because it's a whole different area of business that we are in versus what we're seeing online.

Speaker 1: 8:43

I'll be honest, one of the very first coaching programs I signed up for was through one of those online coaches, because I was like, yeah, I want to make more money. I mean, this was like when I first had my son and I was like what do I need to do to sort of like get clearer on what I'm doing and how do I sort of get a better picture of how to grow my business? And I quickly realized that it was not the right coaching program for me and really the work that I was doing was not going to be aligned with what this coach was sort of teaching, and so it's really going to depend on type of work you do, once again, and if you're offering something outside of just that one-on-one support. I mean, I'm sure there are different programs out there that folks can do with MNT and sell packages once again and groups and all these things that maybe can make them a higher ticket offering. I'm sure there are people out there that are more than willing to spend lots of money, especially for things like weight loss and GI stuff is really big right now. Gut health, so I think. Functional medicine I'm sure there's a market for that now more than ever.

Speaker 1: 9:44

I still think, as a private practice owner, it's not something that we can just assume we're going to make that six figures right away, because it's just not realistic, and so it's so frustrating to me when I see that, because I think it can really feel. You know, this is where I think the money shame comes up around private practice owners of like, well, why am I not making more money? Because we're not supposed to be making the same type of money that somebody who's selling business to business is making. Right, it's a different market. So that's my TED Talk, as it goes from business to business versus business to client.

Speaker 1: 10:21

But all that to say, when you're looking online and comparing yourself to others, just make sure that you are checking in with yourself of like am I in the same field as them? Am I working the same clients as them? Are they making their money the same way I am? You know, there's a lot of different reasons why one field is making more than another, and that's just what I wanna say about that.

Speaker 1: 10:42

So then, on that note, it's like well, is private practice, can it be profitable? You know, is there even a point in starting my private practice? I'm not gonna make any money, like it sounds. Like. Eva, you're saying that you don't make any money in private practice. Is that what you're saying? And no, of course, that is not what I'm saying. And yes, private practice can certainly be profitable and you can make a good living in private practice.

Speaker 1: 11:05

But I will say I feel like I see online too, or folks will, and I'll be honest, I was probably. I think I did the same thing. I was like, okay, well, when I get in network with insurance, I'm just going to have clients like running through the door and I'm going to make so much money and dah, dah, dah, dah. Is that true? Maybe for some people. Once again, this is not just. This can't be your experience. It may very well be your experience, but my hope of this episode is to just really set a realistic expectations for you as you grow your private practice of what is typical for our specific area of business. So what will determine how to maybe even set rates or what can make my business more profitable? And I will say there's a lot of different considerations that are going to impact how much money is going to come into your business.

Speaker 1: 11:56

The first thing I will say is is your private practice a private pay offer or is it a primarily insurance-based practice? There are limitations in my group practice around finances because those fees are determined by insurance. There are ways that folks have asked for increases in their reimbursement rates. I can certainly talk about that in a different episode but typically those rates stay the same. There have been changes over the years. I mean, even since I've been in network with insurance for four years, there was a period where Aetna had one rate and then they cut it and it was much lower and a lot of people had a lot of issues with that, as they should have and then actually Aetna's rate went up and went higher. So that's changed. The others have really not changed significantly that I'm in network with, at least personally, but it's really going to be determined based on your insurance.

Speaker 1: 12:56

I've talked to dietitians in different states who take insurance and their reimbursement is so much slower than mine. I was like, wow, I don't even know if I could manage that if that was our reimbursement rate. In Pennsylvania, in the Philly area in particular, this is one of the areas for us where we work with eating disorders there's not a ton of therapists in network with insurance companies because they really don't reimburse therapists well out here, whereas for us it's manageable and so it really is going to depend on your state and, once again, if you're taking insurance, how much they reimburse, what they cover et cetera. So when you're considering this equation of like, okay, do I want to start my private practice and just do cash option, or do I want to have insurance as an option, it can always help to get information from other local dietitians. Technically we're not allowed to share exactly what we get from insurance companies, but you can at least get a sense of a range of what the reimbursement rate is, or at least an average of what that is, to help you determine okay, is that gonna work for me in my life? Because the other thing to consider and this is gonna be the same thing with cash, pay, private pay practices and insurance is number one the amount, of course, that you're gonna want to charge, or what insurance reimburses in the work that you're doing and the clients that you're doing, in the clients that you see. You know what is a realistic number of clients that you can see a week without it completely burning you out or feeling too much or just really being taxing on your life.

Speaker 1: 14:22

We work with eating disorders and so I usually say like a sweet spot is around 20 a week. I usually say like a sweet spot is around 20 a week. Sometimes that 20 can feel so much and be, you know, carry a lot of burnout, because our clients can be very. There's a lot of complexity, there's a lot of medical complexity, a lot of mental health complexity, and sometimes there's just seasons, like right now where we're getting closer to summer, where a lot of our clients are really struggling, understandably, and so it's. It can be really taxing and it can just be hard for us because as dietitians, I think of course a lot of us go into this work, like I've said, because we want to help people and work with the clients we want to work with and we have such a desire to sort of like help or fix things for our clients. So it can be hard to not carry that as much as the work that we do in supervision and whatnot, to try not to get to that point. It's still really hard.

Speaker 1: 15:17

So I always say you know, for my clinicians our goal is like 20 to 24 on average and that's that tends to be a sweet spot for most people. And that's a week and with that amount of clients a week and reimbursement rates or you know what my clinicians get paid, you know you can make a decent, livable wage. And that's really what's important to me at the end of the day is that, like the amount that we're paying our clinicians and also what we're getting from insurance and the number of clients we're expecting our clinicians to see, is going to be able to sustain a livable wage, where, if our reimbursement was significantly lower, I don't know if I could pay my clinicians the amount that I pay them and then would that be a livable wage, I don't know. And so those are considerations to take. I think if your practice is doing more maybe MNT so you can see more people because it's not to say that your clients aren't hard, they're hard and challenging also, but maybe you're not doing as much of that mental health work and our approach is very much like nutrition therapy at times. So maybe with MNT clients you're doing much more of problem solving and things like that and it's doable to see more than four or five people a day and so you can see more clients. And so, based on, once again, how much you're charging or what your reimbursement rate is, it might make sense to see a little bit more people and then also be able to make the money that you want to make with that. So those are some of the considerations that are going to impact, obviously, the money that you're going to make, versus if you're doing something else or offering something outside of one-on-one work sort of this, like additional option where people pay out of pocket to have a package and then they can still bill their insurance and then they also get additional support in between sessions and groups and other things. So there's ways to get creative around it to also make more money. It's just really going to depend on, like, what do your clients need, what do your clients want, what do you like doing, and so that's going to make a big difference whether or not you can charge more money.

Speaker 1: 17:18

Some of the questions that we often hear from dietitians is how do I set my rates if I'm not going to take insurance? I mean, even if you take insurance, you still got to set a rate. You know one to bill insurance, but two to not everybody's going to have the insurance that you accept. So I would say the best thing to think about is there's definitely online calculators, and I'll I'll find one online and link in the show notes, but there are calculators out there that can, basically, you know, you can put in like, how many hours you want to work, how you know what are you charging, how much you know, like do you want to make? And you can kind of determine, like what's a sweet spot number for you based on, like, what you want to make and what your financial goals are. So you can always do something like that, and I think it's really important to also just compare to where you live and what's expected. If you have an online business, it's going to be a little bit different, of course, because you're not really maybe marketing to a region or a specific area For a private practice. I think even the more virtual practices tend to still really market locally, and so our practice, I mean it is a local one in the Philly area.

Speaker 1: 18:21

So when I was setting my prices, I don't even know why I first did so low. I think it was just my own stuff coming up of like no, I can't charge more money. I'm still new. But really the best thing I would suggest is to, like, look at what other people in your area are charging. That's probably a realistic amount to charge, right? Like if most people in your area are charging like $110, $120, that's probably a good area. $130, $145, $150. I mean, that's probably a good amount to charge. But, say, people who charge like $120 aren't doing as specialized work as you do. Maybe you do have a specialization. Like eating desserts is a specialty, right, and so it's a very specific specialty that we need to do extra education around and we do supervision and we do a lot of training, and so it's when you have a specialty, or if you have one of the board certifications, or if you're a diabetes educator. There are certain specialties that you have that others may not have, and I think that can really also make a difference with how much you charge folks, and I think that can really also make a difference with how much you charge folks. But it's helpful just to see what's in your area because I think that can just give a realistic amount, because I think what people would pay in Philly area will be much different than maybe one of the more rural areas of Pennsylvania or even like in New York City, right, like they'll charge way more money up in New York City because things are just more expensive out there. So it's comparable based on the cost of living in the region. So those are the things that you might want to consider when thinking about how to actually set your rates and what you want to set.

Speaker 1: 19:50

When it comes to insurance and setting rates and billing insurance, the main thing you want to just keep in mind is insurance will reimburse a certain amount. Like they have a certain amount that they will reimburse in the contract. If you bill the insurance company less than what that is, they will only pay that much that you are charging them. So, for example, you know, if our this is just I'm just using hypotheticals but like, let's say, insurance companies will reimburse $150 for a session, which, I'll be honest, they don't do that much, but I'm just using that as an example, at least on our area. So if I were to put in my insurance claim that I was going to charge $135, which is our private pay amount, insurance isn't going to pay $135. They're not going to pay more than that. And so you want to make sure that the number that you're billing insurance is actually either about how much they're charging or higher, because you want to make sure that you're going to get reimbursed, how much they are going to reimburse you. So that's just something to keep in mind.

Speaker 1: 20:51

I'm hoping to do a full episode on insurance and the like nitty gritties of that stuff, so I'll definitely talk more about that in that episode. And the other thing I want to kind of also take into consideration is group practice, because I think and I certainly thought this myself when I was growing my team I was like I can only see X amount of people. If I hire somebody, then they can see that much. They can see X amount of people and I'll make the difference of what I pay them and all these other things. And the interesting thing about that is that it does take a while to see that return. On sort of the investment of hiring, I don't think I took into consideration and once again, this is going to be dependent on if you have a W-2 or 1099, but if you have a W-2, right like you're going to be paying for a payroll system of somehow you're going to be paying taxes on top of that Not significant but nonetheless you have to pay taxes on that. You're going to be paying more for general, you know, for professional liability for your practice. If you have any other office expenses, other investments that you want to make to provide for your staff, it starts to really add up and it takes a little while to see that return.

Speaker 1: 22:09

Once again, as I was saying earlier, it's important to me that my clinicians can make a livable wage and see the amount of clients that is realistic for eating disorder dietitians to see, and so that's going to determine how much we offer. I mean we have a client-facing rate that we offer our clinicians and we also pay admin time for other meetings and things like that. We do trainings, we do lots of other stuff. So the expenses really do add up very quickly With every person we add I have to pay more in our EMR practice, better, I have to pay more to Gusto, which is our payroll company. I mean it just adds up and adds up and so, especially in the beginning, when clinicians are just starting out, their caseload is going to grow kind of slowly and so it's going to be a little bit until you see sort of that once again return or the client's caseload is actually going to make a profit for you as the business owner, a really great resource for kind of determining and understanding, like how to pay yourself and how to set aside money for taxes and expenses and all this thing.

Speaker 1: 23:20

When I first started out and I was in solo practice, I remember hearing you know a good rule of thumb was like 50% should be, you know, to you as like your pay, 30% should go towards taxes and 20 should go towards expenses. I would say with taxes, I mean, it's really going to depend on, once again, your area and all these other things. So that's really somewhere where you want to talk to your accountant and your expenses are also going to be determined on, like do you have an office? Are you just working from home? Like my first year of business I didn't have an office. I mean, my expenses were so minimal and I'm like literally looking at the QuickBooks now and I'll go through it shortly I love using Google spreadsheets to like look at numbers to really determine, like okay, if I pay my clinician this much money and this much is how we get reimbursed, like what is that going to leave me? And you might see, like, say you, you know your average reimbursement rate or your average like cash pay offer is like 130 and you're going to you're like, okay, I'll pay my clinician $60, that might feel like, okay, I'm still going to have $70. That's plenty, right, you still have to pay taxes on top of that. It's not $70, that's just going right into your pocket. It's going to go towards the business, which still is going to go into the business revenue and be taxable potentially, depending on if you're using it on something that is tax deductible or not. So lots to consider.

Speaker 1: 24:42

The book Profit First for Therapists is really, really great. If you happen to have it, it's page 57. They have a breakdown of sort of like the different percentages, of separating things out. Profit First was definitely something that was encouraged for me to read when I started my private practice, and I'm actually glad that I waited and procrastinated and added it to my big pile of books next to my bed that I never read, because when I was finally ready to read it, I discovered Profit First for therapists, which is specifically catered to therapists, but also for private practice in particular, and it really helped me sort of understand the breakdown of how to allocate your money when you're in private practice. So I would really recommend that if you're feeling confused. I'm like how do I pay myself? How do I know what to put aside for X, y and Z? And so, yeah, I'll definitely link that in the show notes as well.

Speaker 1: 25:36

So a lot of different stuff as far as money and having money conversations and things like that. So I think obviously I'm speaking in a lot of general advice and kind of information, but what is the actual money? What can the actual money look like? And so I'm going to actually go through my QuickBooks and pull back the veil. So when I first recorded this episode, I was like, okay, I'm going to talk about all the things that I talked about and then I'm going to conclude it with talking about all of my money and my actual QuickBooks profit and loss sheets from the last four years of business, and as I was going through the episode, I was like you know what I feel like I should split this episode into two parts, because one is just a lot of information in one episode, and when I started this podcast I really wanted to commit to doing shorter episodes because, especially if you're a business owner, possibly a parent, or just have multi-interests, multi-responsibilities I mean there's only so much time in the day, and so that's number one.

Speaker 1: 26:58

But two, talking about my own money, I think is just its own whole thing, and so I really want to make it its own episode and really spend the time that it deserves talking about what actually making money in private practice can look like. And obviously this is just my story and you know it's not to say that my experience is going to be the experience for everybody, but I want to talk about the nuances around that as well and to really devote the episode to that. So we're actually going to cut it off here and conclude the episode today and give you a little sneak peek of what's to come next week, which is going to be my part two on my money and the actual money that I've made in the last couple of years, so stay tuned for that. As always, I hope you found this episode helpful and gave you some things to think about. Be sure to check out the show notes. There's going to be some really good information in there this time around and hopefully I will see you back here next week on Wednesday talking more money things.

Speaker 1: 27:57

Thanks for listening. Bye On Wednesday talking more money things. Thanks for listening. Bye. Thanks for listening to the RD to CEO podcast. Be sure to check out the show notes for any resources mentioned or find more at wwwrdtoceocom. Never miss an episode by subscribing wherever you get your podcasts. See you next time.