Q&A: Growing industry of locum tenens offers pay benefits, flexibility

Key takeaways:

• Locum tenens roles offer health care professionals more freedom and, typically, a higher pay rate.
• Practitioners with prior experience and multiple active state licenses may be a good fit for locum tenens.

Since its inception in the 1970s, the practice of hiring physicians temporarily as locum tenens to meet a vacancy in care has evolved significantly.

In 2023, approximately 50,000 doctors, or 7% of the U.S. physician workforce, excluding international medical graduates, practiced medicine through locum tenens positions, according to an article published in The Wall Street Journal.

Still, information about how health care professionals (HCPs) might begin to pursue a locum tenens role is lacking.

Healio spoke with Tommy Bohannon, vice president of operations at Greenstaff Medical, a Texas-based health care staffing and search firm, to learn more about how the locum tenens system operates, how to become a locum tenens practitioner and the benefits this type of role offers.

Healio: What is locum tenens?

Bohannon: It is temporary physician or advanced practice labor. It’s used when a hospital or a medical group has a vacancy from a transition, such as when someone retires or leaves the community. More often it's due to seasonal fluctuations in volume or when a unit is perpetually short-staffed.

There are a number of different reasons why organizations could leverage locum tenens. But, at its definition, locum tenens is a temporary assignment for a physician or advanced practitioner to serve the needs of their patients.

Healio: How does locum tenens work?

Bohannon: Because of the complexity of credentialing and managing documents related to the maintenance of malpractice insurance and payroll considerations, it's very challenging logistically for a practice to bring in someone and contract with them on a temporary basis themselves.

Many physician groups of size, and certainly almost all hospitals, usually have a preferred staffing partner. In a direct locums arrangement, they would ask the staffing firm for a specific request, such as, ‘I need a general surgeon for the last 2 weeks of May.’ Then we would start looking for them — typically using providers on their roster in their database — and negotiate a pay package for the providers that is based off industry-standard ranges. Generally, the bill rate is going to be enough to pay the physician roughly 10% to 15% more than they would normally make on an hourly basis if they were doing full-time business.

The money from the bill rate will go toward paying the provider and for internal credentialing costs, payroll costs, malpractice and insurance. What’s left is the gross profit that belongs to the agency. Generally, it varies by specialty. Some specialties may be OK with a 15% to 18% margin whereas other specialties might try to hold it at 23% to 25%. Generally speaking, the average is about 20%.Another more common option is working through a managed service provider (MSP) platform or leveraging an open talent marketplace vendor management system (VMS). There are groups like Locumsmart, for example, where a facility or group can contract with them and post an order on their platform, exposing that order to every vendor that participates with Locumsmart. Instead of having one set of eyes trying to find you somebody, you could have a thousand sets of eyes trying to find you somebody.

Locumsmart will then manage everything, leveraging their technology to get the files and documents and manage all the correspondence with the agency that happens to have a provider. They earn a 3% fee, which has an impact on how much the agency can pay the provider and causes the bill rate to be increased, because you have to have more money in the deal to still make money as an agency and pay Locumsmart and the provider. The third option would be if a health system participates with an MSP that covers locums, which has a higher fee placed on every order that goes through their program, but they do more to facilitate the transaction than a VMS would. That one partner exposes the job to their vendor network and their supplier partner network, and they also provide full-blown account management processes and manage timekeeping, payroll and a lot of the credentialing process. But they could have a fee as low as 5.5% and as high as 7.5%.

Healio: What are the benefits of pursuing a locum tenens role?

Bohannon: This is not something that is limited to just providers. More people want flexible schedules and more autonomy and control over their time; I think you see that trend across all sorts of industries. There is a certain freedom and flexibility that locum tenens offers. You’re not only making a few points higher than your normal rate because you're doing contingent labor, but there's more variety. You can work somewhere in the South in the winter and somewhere North in the summer, or whatever it may be. The flexibility in the lifestyle appeals to a lot of people.

Managing or having an LLC or an S corporation setup that you work under, or having your own business, could provide some tax advantages for providers.

There are people who choose to do locums because they can supplement their income while keeping their full-time job. Think about hospital-based specialties — primarily anesthesiologists, certified registered nurse anesthetists, radiologists, hospitalists and critical care medicine practitioners — where the volume is governed by who walks in the door of the hospital vs. ongoing patient relationships. Because those specialties tend to be more shift-based, HCPs in those positions have periods of downtime. They could make extra income by picking up shifts here and there and locums is a good way to do that.

Healio: How can health care professionals get started?

Bohannon: There are a number of job boards where people can go to find locums jobs that are out there. Or, they can go directly to an agency and register with them and give them basic information about their preference, interests, background and licenses.

Then they can work on building a relationship with a given recruiter who will work to find them jobs. There are a number of different ways they could do it, but either calling an agency and getting connected with a good recruiter or browsing the web and finding locums jobs would be the two most common ways.

Healio: What qualities or aspirations might make an HCP a good candidate for a locum tenens role?

Bohannon: Generally, they need to be someone who has a little more experience. There aren't a lot of people that will take a locums provider right out of training because they don't have the time to invest in training them. Locums tenens practitioners just show up to work and see patients.

Further, candidates who have multiple active state licenses are more appealing because they give you more options and you can get them places faster.

Make sure your board certificate and DEA certificate and all your certifications are current and up to date.

The HCPs who approach a position with the mindset of a hired mercenary tend to not be as popular to work with because they're hyper-focused on the bill rate or the pay rate and not as concerned with other things. They'll play agencies against one another.

As an agency, we always want to work with somebody who is going to be easy to get along with and work with, who’s responsive and truly motivated.

Healio: Is there anything else you’d like to add?

Bohannon: The locum tenens industry is projected to grow at a faster rate than travel. The private equity money is starting to flow again into local firms. You've got a lot of people out there who started a firm and are trying to get critical mass by acquiring another smaller firm and then bolting a couple together. They typically double in size that way. It's a good time for the industry.

Bill rates and pay rates haven't fully normalized yet. During the COVID pandemic, everybody was paying exorbitant bill rates and, as a result, doctors were making significantly more working temporary assignments than they had in temporary assignments or permanent assignments in the past.

There is a bit of a disconnect because bill rates have been coming down steadily but pay rates haven’t as much, although they have normalized a little more with locums than in some other areas such as nursing.

It’s a good time to be a locums provider. There’s never going to be a shortage of opportunities. We see clients adding more orders regularly when they're not as aggressively adding order volume in some of the other staffing verticals.  

For more information:

Tommy Bohannon can be reached at [email protected].

Reference:

·       Tarrant G. “Burned out, doctors turn to temp work: A growing group of physicians are ditching medicine’s traditional career path and hitting the road as temporary doctors-for-hire.” The Wall Street Journal. 2023 June 6. https://www.wsj.com/health/the-rise-of-the-part-time-doctor-7025ec1d. Accessed April 21, 2025.

Bohannon reports working for Greenstaff Medical, the partner of Healio Community’s job board.