By FlexMedStaff

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I recently arrived home from the hospital to find a sign in my neighbor’s yard that said, “for sale by owner.” I inquired more as most recent sales in the neighborhood had been brokered by a real estate agent nearby. My neighbor told me that without the real estate agent he was likely to collect $30,000 more in this hot market. He asked me if I thought the real estate agent was worth missing out on $30,000. It got me thinking, is the middleman worth it?  

If I offered you $40 per day for 10 minutes of your time, would you take it? Most high-income medical professionals will answer no to this question. I know because I ask this question often. What if I told you $40 every day, Monday thru Friday, adds up to $10,000 after one year? If you are like most people I ask, you will pause and respond by telling me, “hmmm, that does not sound that bad.” Of course, not! For me, $10k might pay for Summer camp for my two nieces or pay for a three-week trip to Australia.  Oh heck, an additional $10k per year would allow me to buy a used 20-foot lake boat and pay for the annual maintenance. I think you get my point, $10,000 is a lot of money, and it only takes an extra $40 per day to get there. So why would I miss an opportunity to make an additional $40 per day?

Now, why would a practitioner want to work for a locums company and give up any additional money to the middleman? I just presented how a measly $40 per day adds up to $10k yearly, and you are okay with the locums company and their recruiters skimming off your hard work? In reality, a practitioner likely can make more than $40 per if they were to contract directly with facilities for locums-type work and cut out the middleman. An additional $40 per day does not seem like much, but what if facilities were to pay you $30 more per hour to cut out the locums companies? Like my neighbor, who cut out the real estate agent, you could cut out the locums company and put more money in your pocket?

Don’t get me wrong; locums companies deserve their fair share. They are the brokers. They find the hospitals and practitioners and establish an agreement for both parties to benefit. Locums companies and their recruiters should be compensated for their time. A one-time finder’s fee would be fair, but for any middleman to continuously profit based on a practitioner’s hourly and daily rates is unfair to the clinician and the healthcare system. It does not stop there. How is it fair that a locums company can establish such an egregious non-compete clause that forces facilities to pay excessive fees if they were to contract directly with that practitioner within two years?

What is the value of the locums companies? Ultimately, their value as a middleman is to act as a medium for facilities to find practitioners and vice-versa. Simplistically, locums companies act as job posting board. The only difference is that locums agencies provide malpractice insurance for the practitioners.   It is not like the locums recruiters care for patients or directly affect patient care. That is what you are there for. As a locums practitioner, you take the stress and liability of treating patients while the middleman takes a percentage of your potential earnings based on the number of hours you work.

Many people will say that the locums companies are worth it. Are they? The locums companies are tasked with ensuring your locum’s assignment goes on without any issue. They are the ones that interact with administrators, negotiate the agreement, help you get credentialed and licensed, arrange your schedule, coordinate your travel, provide malpractice insurance and deal with any issues or conflicts that arise.  For the locums companies to deal with these items, it is important to think of what that worth means to you.

Let’s say I offered you $30 more per hour. Would you take it? I think most people would respond that they would accept $30 more per hour. Who wouldn’t? If you worked 40 hours per week, an additional $30 per hour equals about $60,000 per year. Not too shabby! The one question to keep is asking yourself is do you need the locums companies and is it worth this potential loss of income. Here is a basic gist with potential expenses to contract directly:

  1. Negotiate a contract with the facility: Free, as this only costs you your time. Up to $1,000 for an attorney to review.
  2. Credentialing at facility: Free, as this is something you can do yourself. You can also pay an expert to do it for you for approximately $250.
  3. New State license application. Free, you can do this yourself or pay an expert approximately $500.
  4. Malpractice insurance: $20-200 per day depending on specialty, state, and type of policy.
  5. Coordinate Travel: Free, as this only costs you your time. You could also hire a travel agent for approximately $25 to book round-trip flights, a hotel, and a rental car.
  6. Travel Expenses: Reimbursed by the facility.
  7. DEA and medical license fees. You can negotiate to have this reimbursed by the facility.
  8. Deal with scheduling, conflicts, and issues that arise: You and your time, but at least you get to speak directly with the facilities.

In reality, locums companies generally make much more than $30 per hour off you. It is worth researching what the locums companies are charging the facilities for your services and how much money is being kept from you. All practitioner should advocate for transparence in the locums industry.

The locums companies’ profit margins depend on their overhead cost, your specialty, and the number of overtime hours worked. Based on these profit margins, every practitioner should consider what value the locums company brings, knowing that a lot of what a locums company does can easily be handled by the practitioner or be done at a nominal cost.  

If you have the same mindset as my neighbor, consider contracting directly for locums-type work without having to go thru a middleman. Why would you let a locums company make a recurring commission off your hourly and daily rate?

The next time you work with a locums company, consider your take-home pay and how much an additional $30 per hour might mean for you if you contracted directly with a facility.

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