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Reducing Hospital Costs With Locum Tenens Physicians

As recruiting costs and physician wages increase, healthcare organizations are faced with the challenge of balancing cost savings and quality care.


Patient care doesn’t have to be compromised when reducing the annual cost spent on hiring physicians.Partnering with a locum tenens staffing agency can be a viable way to help reduce overall staffing costs while also increasing revenue.



Reducing Cost and Risk With Locum Tenens


Effectively onboarding a physician is not only challenging, but also a significant investment for a hospital.

The three biggest financial benefits to hiring a locum tenens physician are:

  • Recruiting costs
  • Malpractice Insurance
  • Physician compensation


Up to $88,000 per physician


Recruiting physicians is a costly, labor-intensive process. By contracting and staffing physicians through a healthcare staffing company, healthcare facilities can significantly cut costs associated with recruiting, including interviewing, sign-on incentives, and relocation bonuses.


Hiring a locum tenens physician makes sense in many scenarios, specifically to maintain optimum patient care amid physician shortages where caseload demands are challenging for staff physicians to meet. From facility expansion to unplanned physician absences, there are many staffing complexities within the healthcare industry. Both revenue and patient care improve when medical facilities use locum tenens to bridge the staffing shortage.





Up to $100,000 per physician annually


The cost of malpractice insurance for physicians can reach up to $100,000 annually. Locum tenens staffing agencies cover this cost for the locum tenens providers that contract with your facility.


The locum tenens benefit stretches beyond not having to provide malpractice insurance. Using locum physicians reduces hidden, unplanned costs overall. An overworked, fatigued clinician is not at their best and can pose a risk to the health and safety of your patients. Healthcare facilities benefit from having locum tenens alleviate the overall workload. 





Up to $400,000 per physician annually


Annual salary, insurance, and benefits can cost hospitals as much as $400,000 per year for a full-time physician. Because locum tenens providers are independent contractors, healthcare facilities don’t have the overhead of an annual salary or  benefits package, thereby reducing the annual physician compensation costs.


At first glance, locum tenens pay rates may appear high, but when patient care and revenue stream are compromised due to lack of sufficient staffing, locum tenens can be considered a worthwhile investment.






More than $1.5 million per physician annually


The hard costs of hiring a full-time physician are significant, but the expense of a physician vacancy is even more costly. Locum tenens providers can fill staffing needs in the short or long term, ensuring that your healthcare organization has the available resources to provide a continuum of quality patient care.



Reducing Costs With Locum Tenens



Hiring locum tenens providers to fill staffing needs allows healthcare organizations to focus on what’s important: providing quality patient care.


By eliminating recruiting costs, malpractice insurance, and physician compensation, and by minimizing lost revenue, locum tenens providers can help organizations reduce overall costs while improving their bottom lines.


Note: This blog was originally published on 04/20/2018 and was updated on 9/20/2022.

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