The Love-Hate Relationship Between Hospitals and Locum Tenens

The Love-Hate Relationship Between Hospitals and Locum Tenens

By: Dr. Robert Moghim

Securing personnel for a hospital or managed care organization can be a difficult and involved process that takes months.  For many of the administrators of these medical organizations the stopgap solution for these vacancies is locum tenens staffing agencies which can provide the physicians, advanced practice providers or allied health professionals needed for critical functions.  While the multi-billion dollar medical staffing industry has become a fixture in the industry, most hospital administrators have a love-hate relationship with staffing companies.

The locum tenens medical market has grown rapidly since its inception in the 1970’s.  In 2014, the national locum tenens market was estimated to exceed $2.5 billion.  Almost 90% of hospitals used locum tenens physicians at some point in the past year and the average number of days these temporary staff filled in were one to five per month.  There are many reasons why there is such demand for locum tenens professionals including rising number of patients, more physician retirements, and inability to recruit health professionals in a timely fashion.

There is widespread recognition that there is a physician shortage, especially in many rural communities.  This shortage will almost surely intensify in the coming years, and coupled with an impending shortage in the nursing workforce as well, many of the nation’s healthcare organizations will have to scramble to fill vacancies. Unfortunately, the process of filling physician positions is lengthening. In 2002 it took two or three months to fill a vacancy, while in 2011, it averaged seven to nine months.  This period without a qualified M.D. can cost an organization hundreds of thousands of dollars, and dramatically detriment the quality of care.

Most hospital administrators will point to the exorbitant costs of using locum tenens professionals as their leading drawback.  To a certain extent there is some truth to that criticism, but an unfilled position is often much more costly.  According to a recent study, a physician can generate $1.5 million per year in revenue opportunities.  The study found that specialists generated considerable monthly revenue for their parent organizations:

Specialty

Monthly Revenue Generated

Family Practice

$172,297

Internal Medicine

$163,995

General Surgery

$155,055

Psychiatry

$108,553

 

So, despite the increased upfront costs of using locum tenens professionals, the revenue that is lost due to a vacancy is almost always considerably more.

Another important aspect of employing temporary professionals is the ability to explore new medical services.  Instead of making a substantial investment into hiring one or more specialists to establish a new department, administrators can merely hire locum tenens professionals for a limited time period. This short term investment in new clinical services allows administrators to measure the response in the community without committing to an unviable, long term project or sour relationships with new hires.

There is also the benefit to using locum professionals to fulfill important regulatory requirements. Many trauma centers must maintain a certain number of specialists on staff or on call to retain their trauma status.  Temporary medical professionals can fill out the roster when vacancies occur including at night or on weekends.

Finally, there is the issue of unsatisfied expectations on the part of the administrator.  It is important to perform due diligence prior to a hire, but it can be difficult to obtain an accurate picture of an individual or organization prior to engagement.  While there is always the risk of a bad hire, there are ways to mitigate friction in the relationship.  It is important to communicate major—and minor—responsibilities at the outset.  Furthermore, it can be tempting to overwork a locum, but administrators should keep in mind that many temps are willing to become permanent if the situation is conducive.  Finally, the medical community is tight knit and vocal; a truly unbearable work situation can damage a reputation quickly.

About the Author: Dr. Robert Moghim is a board certified physician specialist and founder of Onyx Healthcare (D.B.A Onyx M.D.), an award-winning healthcare staffing firm. His extensive medical background, entrepreneurial vision, and business acumen provides a unique perspective on the ever-evolving and dynamic healthcare industry. Dr. Moghim is also an executive director and co-founder of Colorado Pain and the founder of Moghim Medical Consulting, Inc. Aside from his business leadership, physician and consultative duties, he also sits on the Colorado Medical Board, an esteemed position appointed by the Governor of Colorado. Most recently, Dr. Moghim was recognized as a finalist in the Ernst & Young Entrepreneur of the Year Award.

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