While at first glance the cost of using locum tenens physicians may seem high, when compared with leaving key revenue-producing clinical positions vacant, it is well worth considering, according to a recent Medstaff National Medical Staffing report. Medstaff is a national firm that manages locum tenens and permanent placement of physicians in all specialties.

The article says that when unforeseen staffing problems arise, locum tenens physicians provide an excellent solution. However, the best way to maximize return on investment when it comes to using temporary physicians is to plan ahead whenever possible.

By working closely with a locum tenens company, a healthcare provider can develop a relationship that allows the agency recruiters to understand and respond to physician staffing needs, both current and future. An agency can conduct quarterly reviews with all clients to help them project and plan to cover vacancies due to vacations or sabbaticals, maternity leaves, physicians retiring or leaving the community, seasonal changes in patient volume, or when a new program or service is being developed. By planning ahead for physician staffing needs, a provider will have more candidates from which to choose and more time to get credentialing and billing-related paperwork in order so that cash flow is not interrupted, the report says.

The key consideration is the cost of leaving the position open or unfilled, according to the report. Often, the use of a locum tenens physician is equal to or less than that of a permanent staff physician whose package includes base pay, benefits, incentives, vacation, CME allowance, liability insurance, and taxes. Once totaled, the full cost of a family practitioner, for example, could be $220,000 or more. On average, that same position filled by a locum tenens would cost $197,000 annually. That is about $780 per day with the physician's liability insurance included.

Factoring in the revenue produced by the physician in professional fees (in this case approx. $1,600 per day) and additional revenue to the hospital via referrals, admissions, and other services such as labs or radiology, you are actually looking at a net gain. The total revenue generated by a family physician can be up to $4,000 per day. This calculation can be done for any specialty. Imagine the cost of an empty operating room or having to transfer patients from your emergency department due to lack of specialty coverage.