One of the most common objections healthcare facilities have to hiring locum tenens providers — even in times of urgent need — is the cost. While it’s true that hiring locum tenens providers when short-staffed is an expense, not hiring locum tenens providers when a vacancy arises can come at a price of its own.
How much does a locum tenens provider cost?
Because locum tenens providers can vary in cost depending on their qualifications, specialty, and experience — just as permanent providers can — there isn’t a fixed cost associated with hiring locum tenens providers.
The primary difference between locum tenens providers and permanent providers is the type of compensation earned. Locum tenens providers are independent contractors; they are paid only for their hours worked. Costs that may be added include:
- Hotel or temporary housing
- Rental car or public transportation services
- Malpractice insurance
Naturally, due to their permanence, permanent providers have the potential to come with more added expenses than a locum tenens provider would. Some of these additional costs could include:
- Signing bonuses
- Placement fees
- Licensing fees
- Employee benefits
- Malpractice insurance
- Health insurance
- Retirement plan contributions
- Continuing education costs
- Relocation costs
- Workers compensation
Because these additional expenses can roughly range between $50,000 and $150,000 annually, a permanent provider making $300,000 a year could cost up to $450,000 to employ.
In the context of a five-day week in a fifty-week year, a permanent provider making $200,000 annually would cost approximately $800 a day. While the daily rate for a locum tenens provider of the same specialty would be somewhat greater than $800 — due to the cost of housing, travel, and malpractice — it wouldn’t be significantly higher than the cost of a permanent provider, especially taking into account what all could be lost if a position is left open long-term.
What is the cost of not hiring a locum tenens provider?
While choosing to go without a locum tenens provider during a time of need may seem like a money-saving option at first, healthcare facilities have the potential to suffer substantial losses when remaining short-staffed.
Depending on the facility and specialists needed, hundreds of thousands of dollars in revenue could be lost when a position is unfilled for an extended period of time. Sometimes, it can take a number of months to locate and credential the right provider to join a facility permanently; taking advantage of locum tenens providers during the search may help prevent dramatic drops in revenue.
Revenue, however, is not the only thing healthcare facilities stand to lose during seasons of low staffing — fewer providers can limit general access to healthcare services. A decrease in availability can affect not only the satisfaction of patients, but a facility’s capability to provide efficient and quality care.
While employing a permanent provider as soon as possible is ideal for most healthcare facilities, hiring a locum tenens provider in the meantime is typically a better alternative to having no provider at all. Locum tenens providers can be impressive revenue generators — instead of perceiving locum tenens providers as an egregious expense, it would be valuable to consider all they could produce for a facility in need.
Are there ways to offset the cost of locum tenens providers?
In instances a locum tenens provider is pricier than anticipated — like in emergent circumstances, or for more specialized providers — there are things a healthcare facility can do to help balance the cost.
- Adjust the workload. For example, if a locum tenens provider is costing a facility $800 each day — as opposed to a permanent provider’s $400 daily rate at the same facility — the facility would benefit from assigning the duties and procedures that generate the most revenue to the locum tenens provider. By doing this, the cost of the locum tenens provider and the revenue produced by the locum tenens provider counteract.
- Aim to “break even.” In hiring a locum tenens provider, healthcare facilities should make a goal to “break even,” not to make a profit. Maintaining realistic cost expectations while working with a locum tenens provider is crucial.
Employing a locum tenens provider doesn’t have to come with a sky-high price tag. Through strategy, utilizing a locum tenens provider can leave healthcare facilities in a far better position than they might have been without one. Even if the difference between a locum tenens provider’s rate and the revenue generated during their service is greater than initially desired, that difference is a fraction of what could have been lost instead, both financially and otherwise.
How do I know if hiring a locum tenens provider is right for our facility?
When it comes to choosing between permanent or temporary staffing, there isn’t a right or wrong choice — it’s a matter of what would be a better fit for your circumstances.
Evaluate your needs. What type of provider or specialist do you need? How much compensation will they require in comparison to how much revenue they are expected to generate? Do you have the patient volume to justify hiring a locum tenens provider? Are you short a provider due to resignation or retirement, a short vacation, or a leave of absence? A clinic without an internal medicine physician for a weekend may not require a temporary replacement as urgently as an absent neurosurgeon at a hospital would. There are a variety of factors to consider in these cases.
If your facility has recently been affected by resignation or retirement, using a locum tenens provider to fill the vacancy can buy you additional time to find your ideal candidate. Maybe your facility won’t take a significant hit by going without a provider for a few days. Or, perhaps you need a substitution, but only for a few shifts each month. Whatever your needs may be, there is no “one size fits all” solution. Your facility’s circumstances are multifaceted.
How do we compare to other staffing agencies?
Fusion Healthcare Staffing bills healthcare facilities between ten and fifteen percent less than other healthcare staffing agencies. How?
- We limit our overhead costs by eliminating unnecessary job positions and utilizing our employees’ talents fully.
- We exercise fiscal prudence, one of the eight values that make up our Fusion Creed.
- We negotiate malpractice costs to land an affordable rate, which reduces what our clients need to pay.
Through this conscious effort, we are able to bill our clients less. We are confident in our rates and committed to transparency — for more information, give us a call at 855-537-8353. While we specialize in locum tenens staffing, we offer permanent staffing solutions as well; allow one of our experienced staffing consultants to assist you.