How do locums companies work?

This forum made possible through the generous support of SDN members, donors, and sponsors. Thank you.

BelaMedicine

Junior Member
15+ Year Member
Joined
May 19, 2006
Messages
56
Reaction score
4
I'm specifically wondering how they structure their profit? How much money do they actually make from us and is it a cut of our hourly rate? As in for every hour we work, they make a certain %? and what is that actual %?

I am wondering since I have been kind of shocked at the low ball locums offers I have seen and in talking to recruiters I get the sense that they profit off of us big time.

Members don't see this ad.
 
I'm specifically wondering how they structure their profit? How much money do they actually make from us and is it a cut of our hourly rate? As in for every hour we work, they make a certain %? and what is that actual %?

I am wondering since I have been kind of shocked at the low ball locums offers I have seen and in talking to recruiters I get the sense that they profit off of us big time.
they profit, but they are a business and do a LOT of work that you don't have to worry about as well as paying for things as well, so they are expected to profit some...

whatever your per hour is, they get about the same...so say you are working $150/hr...the hospital is paying the locums about $300/hr.
remember they are paying your med mal, travel expenses, licensing and credentialing fees, and then they do a great deal of the paperwork for those things.

if you can work directly through the hospital as per diem, you can get more money per hour, but they don't always pay for everything.
 
Is there anything to the notion that hospitals have a distaste for negotiating directly with physicians and prefer to go through locums companies, "corporation to corporation" style? I've read almost every locums thread on SDN and that's kind of the impression I've gotten from reading between the lines of people's experiences. Not sure how correct that impression is...
 
Members don't see this ad :)
Is there anything to the notion that hospitals have a distaste for negotiating directly with physicians and prefer to go through locums companies, "corporation to corporation" style? I've read almost every locums thread on SDN and that's kind of the impression I've gotten from reading between the lines of people's experiences. Not sure how correct that impression is...
sure, hospitals LOVE to spend twice as much money for the same work.
 
  • Like
Reactions: 1 user
I am consistently appalled by how locums companies are low balling physicians. Some of the rates I have heard are WTF? How are doctors accepting these rates?? Seriously and when I tell the locums recruiter how low that is they tell me well I have other doctors willing to accept that rate.
 
I am consistently appalled by how locums companies are low balling physicians. Some of the rates I have heard are WTF? How are doctors accepting these rates?? Seriously and when I tell the locums recruiter how low that is they tell me well I have other doctors willing to accept that rate.

What are some of the said rates you're being offered?
 
1200 for an 8 hour shift in a revenue generating specialty that pays a lot more than that normally
 
The question that I have is - do hospitals like working with locums companies? Do they have a certain allegiance with them? In other words do they work with multiple companies or only one or do they not even care, just whatever it takes to get staffed?
 
The question that I have is - do hospitals like working with locums companies? Do they have a certain allegiance with them? In other words do they work with multiple companies or only one or do they not even care, just whatever it takes to get staffed?
it varies...yes some hospitals will prefer different companies...mostly because they have had good experiences with them and will go with the known entity...but they of course will not rely on one company to make sure that they can get staffed as they need. Just as you don't want to relay on only one locums company.
 
1200 for an 8 hour shift in a revenue generating specialty that pays a lot more than that normally

150/hr isn't horrible, but i can only speak for IM and Endo...depends on the location...in the NE? that's actually pretty decent...BFE? well you should be able to get closer to 170-180/hr

if this is EM...well, that would be on the low side...even for the middle of nowhere.
 
I am wondering since I have been kind of shocked at the low ball locums offers I have seen and in talking to recruiters I get the sense that they profit off of us big time.


Everything is relative. You need to know the average market pay rate for your specialty to really judge what low is. The best way to do that is talk to your colleagues who've done the locum work in the state/region of your interest.

Average pay rate is essentially the reflection of the demand and supply. For example, in the hospitalist world, $150/hr may be Ok for the Southern CA metro area but would be extremely low for the rural northern CA.

So do your research and figure out what the average rate is which will help you to feel more confident negotiating if the offer is low.

If you are a hospitalist you can use the locum tenens pay rate calculator to figure out what the reasonable numbers are.

I totally agree with the fact that you need to work with multiple agencies simultaneously when looking for locum work. This way you'll have a choice.

Other ways to get higher pay rate would be to look for the locum work in the Southern and Mid-Western states and rural areas. You will have more negotiating power due to lower physician supply there.

Also, do not forget about the taxation since some state's taxes are pretty high and you are taxed as 1099 even if you work there temporarily which will eat away at your income. That's why I prefer to work in the states with the low or zero state taxes, e.g. WA.
 
Last edited:
I dont think the locums company are making 2 times of what they are paying the doctors. That would be a LOT of money the hospital is paying.

I was told they make 25% of your hourly pay. So about 40-50$ per hour. Then again this information came from a hospital leadership source so may be biased.

Also remember the hotel and car costs.
 
I dont think the locums company are making 2 times of what they are paying the doctors. That would be a LOT of money the hospital is paying.

I was told they make 25% of your hourly pay. So about 40-50$ per hour. Then again this information came from a hospital leadership source so may be biased.

Also remember the hotel and car costs.
1 x what the physician makes ( ie, if you are getting 150, they are getting 150 as well, not twice what you are getting). I've seen the paperwork myself...but probably not all locums companies may be able to command that amount.
realize that the locums companies pay for a number of things...hotel, transport, med mal, credentialing costs, nevermind the salaries of the people they employ...plus make a profit...
 
still seems like a lot considering how the hospitals currently are penny pinching.
 
still seems like a lot considering how the hospitals currently are penny pinching.
what is your point? I know what my locums companies charge and what they get for me...is your locums company not getting enough for you?

hospitals (especially those not in desirable area) have to weigh the loss of money that occurs if they don't have Hospitalists to admit pts...there is a reason why there has been an explosion in the number of locums companies in the last couple of years...there is a demand for physicians, more physicians are becoming tired of working for an employer or as a PCP and locums companies are profitable.
 
Top