Psychiatry at a Private Facility vs. Hospitals: Pros & Cons

For Psychiatrists, when it comes to deciding whether to join a private practice or a hospital there are pros and cons to consider for each. Finding the right fit will be different for every physician.

It all comes down to personal preference. Hospitals and private practices differ in many ways. From the schedules they offer to the salaries and opportunities for growth you may have long term, there are many factors you should consider before deciding what team of physicians you ultimately join. Speaking to colleagues and professionals from both workplaces is a great place to gather information and get a better picture of what life may look like in each career path.

Below we will take a closer look at each workplace setting and share some of the pros and cons. With this information in hand, we hope you will have a little more clarity when it comes to making your decision for which environment will be best for you.

Private Practice

Private practices have many perks that are desirable for many psychiatrists. To start, these practices will look much more like an office setting and are run by either a group of partners or by a single individual. The private practice environment feels more like a family with proprietary rules* created by the people who own the business.

*Rules will still abide to the rules and regulations of state laws, etc.


Autonomous Lifestyle

According to The Practice of the Practice, people who have a need for more control in their schedules and lives are well suited for a private practice. Instead, stringent hospital policies and schedules these offices provide more flexibility. Physicians who have an established niche and prefer working independently, even alone, will feel more at home at private practices. Additionally, this more independent work lifestyle creates a more relaxed environment for physicians overall.

Automatic Referrals

Getting started and building a patient base is always a challenge. With private practices, this is less of an issue because you will automatically gain patients from the natural overflow in the office. When a colleague is overbooked or is no longer taking new patients, you automatically reap the benefits.

Predictable Schedule

Private practices can be viewed as less work overall than that of a hospital environment. Physicians have reported that their daily tasks are more predictable and that their normal workday will involve showing up, seeing clients, making notes and calling it a day.

Greater Quality Control

Private psychiatrists are expected to do both work with their patients as well as administrative duties. This can be stressful to juggle with their clients’ needs, but it also allows the physicians to grow their skillset and develop services in marketing, finance, IT, contract negotiations, RCM, facility management and more. Having a hand in all the parts of the practice allows the individual to create a reputable reputation for the whole team. 

Opportunity for More Patients and More Rewards

Hospitals generally will have a cap or a rotation system to make sure that all physicians are seeing equal amounts of patients. This also ensures the physicians are paid the same. In private practices, rigid rules such as these are not an issue and physicians are able to see as many patients as they like. More patients create more financial opportunities for the practice as a whole and for those working for it.


Fewer Opportunities to Move Up 

In private practices, it can be more difficult to move up. Especially if you’re already at the top. With a smaller team, there could be fewer opportunities to be promoted because there simply may not be more than one spot for each tier.

Base Salaries Are Less Substantial

Private practices are not able to compete with hospital-rate salaries. This has mostly to do with their much smaller size. Revenues can fluctuate yearly, and those fluctuations directly impact the entire team. If a physician does not offset their expenses, it could mean a significant loss of revenue.

Competition May Be More Prominent

Depending on the environment and the culture of the office, you may find yourself in a more competitive culture with colleagues that are less willing to share and promote the team as a whole. This could result in fewer clients for you and more for your colleagues.
More Monotony  

As mentioned above, private practices tend to offer more predictable schedules. For some, that may be appealing, but for others this could lead to boredom. It all comes down to your personal preference.


Working at a hospital also has its pros and cons. The biggest difference between hospitals and private practice is their average size. Hospitals are bigger and as a result, attract more patients. Having more patients can make for a much busier workplace setting.


A More Social Work Environment

The hospital environment is a great option for people who are social, extroverted and like to work with a team. With a variety of different departments, parts of the patient’s care can be sourced to other relevant providers on site. Additionally, for newly licensed psychiatrists, working at a hospital is a great way to build a network of professionals when getting started.

Less Decision Making

For those who like to have their tasks outlined for them to execute, hospitals are a great option. Some physicians do not like to be in charge of decisions. If you are a person who wants to focus on just the work you need to do with your client and let someone else do the planning and administrative details, a hospital may be a good option for you.   

Expect a Higher Income

Since hospitals are large establishments with greater funds, there are more funds to offer physicians. Pay tends to be higher, and is usually guaranteed, compared to that of a private practice where the money being generated must be allocated to a number of administrative purposes.

More Growth Opportunities

With many positions available in hospitals, there is more potential for moving up. A physician may begin their career at a base level and can work towards becoming promoted to a Vice President or Head of Medicine within the hospital.


Less Independence

Working in a hospital has many constraints for physicians. Once a physician has signed a contract, the hospital has the right to dictate everything from where they perform surgery to what tools they rely on and what materials they have.

Inconsistent Compensation

While starting salaries may look great coming into the hospital, hospitals can—and do—change their production-based formulas. When reviewing your contract, it’s important that you have your offer looked at by a legal professional.

Complicated Technology

Technology presents a learning curve and EHR system are not all created equal. You may find the system you’re accustomed to may not be the same as the software the hospital relies on. Learning new software can create a lot of frustration and can be very time consuming as well.

Whatever the path is you decide to take, remember that each career move creates personal growth and helps you learn what you may like or dislike.

Authored By 

LifeStance Health
LifeStance Health