How To Get Rich In Psychiatry

Doctors choose to be doctors for many reasons.  Sure, they “want to help people,” they “enjoy the science of medicine,” and they give several other predictable (and sometimes honest) explanations in their med school interviews.  But let’s be honest.  Historically, becoming a doctor has been a surefire way to ensure prestige, respect, and a very comfortable income.

Nowadays, in the era of shrinking insurance reimbursements and increasing overhead costs, this is no longer the case.  If personal riches are the goal, doctors must graze other pastures.  Fortunately, in psychiatry, several such options exist.  Let’s consider a few.

One way to make a lot of money is simply by seeing more patients.  If you earn a set amount per patient—and you’re not interested in the quality of your work—this might be for you.  Consider the following, recently posted by a community psychiatrist to an online mental health discussion group:

Our county mental health department pays my clinic $170 for an initial evaluation and $80 for a follow-up.  Of that, the doctor is paid $70 or $35, respectively, for each visit.  There is a wide range of patients/hour since different doctors have different financial requirements and philosophies of care.  The range is 3 patients/hour to 6 patients/hour.

This payment schedule incentivizes output.  A doctor who sees three patients an hour makes $105/hr and spends 20 minutes with each patient.  A doctor who sees 6 patients an hour spends 10 minutes with each patient and makes $210.  One “outlier” doctor in our clinic saw, on average, 7 patients an hour, spending roughly 8 minutes with each patient and earning $270/hr.  His clinical notes reflected his rapid pace…. [but] Despite his shoddy care of patients, he was tolerated at the clinic because he earned a lot of money for the organization.

If this isn’t quite your cup of tea, you can always consider working in a more “legit” capacity, like the Department of Corrections.  You may recall the Bloomberg report last month about the prison psychiatrist who raked in over $800,000 in one year—making him the highest-paid state employee in California.  As it turns out, that was a “data entry error.”  (Bloomberg issued a correction.)  Nevertheless, the cat was out of the bag: prison psychiatrists make big bucks (largely for prescribing Seroquel and benzos).  With seniority and “merit-based increases,” one prison shrink in California was able to earn over $600,000—and that’s for a shrink who was found to be “incompetent.”  Maybe they pay the competent ones even more?

Another option is to be a paid drug speaker.  I’m not referring to the small-time local doc who gives bland PowerPoint lectures to his colleagues over a catered lunch of even blander ham-and-cheese sandwiches.  No sir.  I’m talking about the psychiatrists hired to fly all around the country to give talks at the nicest five-star restaurants in the nation’s biggest drug markets cities.  The advantage here is that you don’t even have to be a great doc.  You just have to own a suit, follow a script, speak well, and enjoy good food and wine.

As most readers of this blog know, ProPublica recently published a list of the sums paid by pharmaceutical companies to doctors for these “educational programs.”  Some docs walked away with checks worth tens—or hundreds—of thousands of dollars.  And, not surprisingly, psychiatrists were the biggest offenders earners.  I guess there is gold in explaining the dopamine hypothesis or the mechanism of neurotransmitter reuptake inhibition to yet another doctor.

Which brings me to perhaps the most tried-and-true way to convert one’s medical education into cash:  become an entrepreneur.  Discovering a new drug or unraveling a new disease process might revolutionize medical care and improve the lives of millions.  And throughout the history of medicine, numerous physician-researchers have converted their groundbreaking discoveries (or luck) into handsome profits.

Unfortunately, in psychiatry, paradigm shifts of the same magnitude have been few and far between.  Instead, the road to riches has been paved by the following formula: (1) “Buy in” to the prevailing disease model (regardless of its biological validity); (2) Develop a drug that “fits” into the model; (3) Find some way to get the FDA to approve it; (4) Promote it ruthlessly; (5) Profit.

In my residency program, for example, several faculty members founded a biotech company whose sole product was a glucocorticoid receptor antagonist which, they believed, might treat psychotic depression (you know, with high stress hormones in depression, etc).  The drug didn’t work (rendering their stock options worth only millions instead of tens of millions).  But that didn’t stop them.  They simply searched for other ways to make their compound relevant.  As I write, they’re looking at it as a treatment for Cushing’s syndrome (a more logical—if far less profitable—indication).

The psychiatry blogger 1boringoldman has written a great deal about the legions of esteemed academic psychiatrists who have gotten caught up in the same sort of rush (no pun intended) to bring new drugs to market.  His posts are definitely worth a read.  Frankly, I see no problem with psychiatrists lending their expertise to a commercial enterprise in the hopes of capturing some of the windfall from a new blockbuster drug.  Everyone else in medicine does it, why not us?

The problem, as mentioned above, is that most of our recent psychiatric meds are not blockbusters.  Or, to be more accurate, they don’t represent major improvements in how we treat (or even understand) mental illness.  They’re largely copycat solutions to puzzles that may have very little to do with the actual pathology—not to mention psychology—of the conditions we treat.

To make matters worse, when huge investments in new drugs don’t pay off, investigators (including the psychiatrists expecting huge dividends) look for back-door ways to capture market share, rather than going back to the drawing board to refine their initial hypotheses.  Take, for instance, RCT Logic, a company whose board includes the ubiquitous Stephen Stahl and Maurizio Fava, two psychiatrists with extensive experience in clinical drug trials.  But the stated purpose of this company is not to develop novel treatments for mental illness; they have no labs, no clinics, no scanners, and no patients.  Instead, their mission is to develop clinical trial designs that “reduce the detrimental impact of the placebo response.”

Yes, that’s right: the new way to make money in psychiatry is not to find better ways to treat people, but to find ways to make relatively useless interventions look good.

It’s almost embarrassing that we’ve come to this point.  Nevertheless, as someone who has decidedly not profited (far from it!) from what I consider to be a dedicated, intelligent, and compassionate approach to my patients, I’m not surprised that docs who are “in it for the money” have exploited these alternate paths.  I just hope that patients and third-party payers wake up to the shenanigans played by my colleagues who are just looking for the easiest payoff.

But I’m not holding my breath.

FootnoteFor even more ways to get rich in psychiatry, see this post by The Last Psychiatrist.

20 Responses to How To Get Rich In Psychiatry

  1. Carol Levy says:

    I have not googlred it but heard that this is what is happening with cancer drugs. They are just trying to repackage what they have so they can make more money on them.
    And to want to “reduce the detrimental impact of the placebo response.” I am not sure whatthat means. Is this another way to skew studies so they get the “it works” response they desire having nothing (literally) with which to compare it?

  2. Barney Carroll says:

    Regarding the entrepreneurs, you forgot to mention the part about trying to intimidate your scientific critics. Ask your former teachers at Stanford to explain.

  3. doctorz says:

    Steve, thanks for exposing Alan Schatzberg and his company, Corcept. It’s particularly disconcerting that he’s still chair at Stanford, and even more so, was outgoing president of the APA when this scandal was uncovered. What a charlatan!

  4. doctorz says:

    Apparently Schatz stepped down as chair at Stanford last year. I also didn’t know about his ghostwriting credentials until now:

  5. Emil says:

    At the risk of sounding like a psychiatrist, seems like you might have some feelings about your colleagues’ success.
    Also – as best I can tell you don’t want drugs with new mechanisms (glucocorticoid), don’t want drugs with old mechanisms (copycat), don’t want people to monkey around with new ways of doing clinical trials (RCTlogic). So… now that those academics you’re so angry at won’t be traveling the country wearing suits and raking in big bucks, what exactly do you want them to do?

    • stevebMD says:

      Do I have “feelings” about my colleagues’ success? Well, I don’t begrudge them. Look, if they want to become rich, they can do so. As this post illustrates, there are several ways of achieving this goal. And, to be honest, most of these paths are (or were) available to me, too. I simply chose not to pursue them.

      The purpose of the post was to point out that if we use “pay” as a yardstick for how much society values an item, then our priorities in psychiatry are entirely out of whack. In general, the highest paid psychiatrists are the ones seeing 50+ patients per day, the ones flying around the country speaking for multiple (and competing!) drug companies, and the prison docs who simply prescribe Seroquel, Depakote, and sleepers. Notice how NONE of this has anything to do with quality of care, or (heaven forbid!) whether patients improve as a result of these doctors’ interventions.

      Regarding your other comment, I didn’t say I didn’t want new drugs. I absolutely want new drugs. But (a) let’s make sure they work, and (b) if they don’t, let’s not massage the data to make them look good, or look for other ways to bring them to market.

      Oh, and what do I want academics to do? Understanding the nature of mental illness would be a good start.

    • Ron, R says:

      steve is a nurse practitioner? doing all the work for a fraction of the pay they are charging for him. less education less pay. just guessing. most psychiatrist are hard working people that care about there patients. average first year prob for a clinique is $265-$275 for a shrink with a little experience. private sector ,open a clinique and hire a receptionist and 3-4 nures practioninors and you the psychiatrist. make $300.000 for your self. $ 50.000 of each nurse and pay your over head. $50.000-600.000.

  6. stephany says:

    “What exactly do you want them to do?” how about taking care of their patients? instead of appearing to be greedy, self-absorbed, and raking in boatloads of $$$ for personal benefit, hell does anyone really believe Nemeroff and the likes need big steak dinners and fancy vacations, or side income to do humanity good by being doctors? There is a skewed rationale for what researchers deserve for their time!

    Influential KOLs created their thrones, and it’s time to de throne them and make money pay out to doctors illegal. Pharma shouldnt be involved in their own drug trials either. AstraZeneca funds many of their Seroquel trials, which is unethical and slanted. Who believes positive outcomes then?

    Remember PAXIL 329? all those ghostwritten authors?

    Remember when everyone thought Geodon was going to be the new best antipsychotic? then Abilify? Seroquel? Latuda? Saphris? how many drugs are fast tracked with massive side effects that predominantly affect the heart? Find one that doesnt have that profile, to start. Understanding the human brain and how the drugs affect the entire body might be a good start, or as Carlat had the epiphany: listen to the patient and ask whats happening in their life before medicating a situational distress or grief!

  7. anon4cec says:

    Re: “Footnote: For even more ways to get rich in psychiatry, see this post by The Last Psychiatrist.”

    The irony, here, is that TLP is a big-time pharma shill and DOES fly all over the country giving talks….

  8. carlodj says:

    For entrepreneurs as a second source of income: I read this news update article (link: at an IEEE Spectrum March 2011 issue. Title of the article is “The Psychiatrist in the Machine” It claims that software of computers can interpret MRI scans inside a good margin of confidence such that a bipolar patient can be recognised among other types of people, among healthy people and among people who have other types of mental illnesses. Article has two textures joined; a piece of it is crafted with wood and the other piece is made of jelly. Scientists, as it is claimed in the article have nailed these two pieces together. This magazine has been manipulated in recent years by traditional coercive psychiatry to publish advancements of using electronic technology in discovery of human mind complexities and treating its malfunction. As electronic technology has brought wonders and new possibilities in the field of medical instrumentation among other daily and non-daily activities of human beings, it has come to the minds of psychiatrists that these feats could have some gifts for them too. Engineers who are behind these gadgets follow the propositions of psychiatrists based on the idea that they are able similar to physicians to use these tools on a basis of well-tested postulates. Coercing traditional psychiatry is not working in that domain. Those engineers never go back and ask in hard evidence what was the result of using their crafts in psychiatry domain. On an impartial overall review how far the very real people who were in the hands of psychiatry have been recovered due to usage of that instrument. They only keep their own job going. There is no evidence of any find out in using this MRI.

  9. leejcaroll says:

    Not sure this is the post I wanted but thght you would find this unsurprising (bummer don’t know how to do th strike through thing) interesting
    Dr. Drew Allegedly Paid $275,000 To Illegally Promote Gl axoSmithKline Drugs
    Dr. Drew Allegedly Paid $275,000 To Illegally Promote GlaxoSmithKline Drugs
    (Primarily for WellbutrinSR off-label)

  10. leejcaroll says:

    Just found this:
    Is the Sunshine Too Bright?

    “CMS has finally issued a rule fleshing out the Physician Payments Sunshine Act, under which drug and device companies must make public most gifts and payments to doctors that exceed $10.”

  11. Ruben says:

    C’est bizarre je pensais justement rédiger un petit article pareil à celui-là

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