Lack of Retention: The Cost of Locums
Over the past seven years or so, the medical community has woken up to the pressing issues caused by the systemic and regular use of locum tenens. In the first decade of the 21st century, hospitals regarded locum physicians as life savers, interim workers who can cover shifts when needed and help lighten the load of overworked full-time staff. Now, we’re fully aware of the cost of locums, not only monetarily (which is significant), but also the less obvious effects the presence of a locum has on other staff. Put succinctly, they’re paid more for doing less work. What once looked like a lifeboat for a drowning team, now appears more like an indifferent temp worker who’s not invested in the team’s success. They take more money than the full-time physician and don’t plan to stay for the long haul. We don’t need to over-explain why this is demoralizing to full-time staff and frustrating for leaders to have physicians who aren’t committed.
Besides emotional cost, let’s outline some general (and entirely true!) monetary costs for locums across the country. While it does vary depending on the situation, and depending on the specialty, a surgical specialty locum can cost a healthcare organization up to 10-12 k PER DAY, with extra charges for call back. Additionally, a regular psychiatry outpatient locum can cost between 40k-56 k per month, even if your organization doesn't need them full time. Note that these numbers don’t go directly into the locum physician’s pocket, but are the fees the locum company charges.
If we break this down even further into what the locum physician actually acquires in take home pay, we still see a sizable gap from a typical physician. “In terms of hourly wages, locum hospitalists are typically paid about $150 an hour, significantly more than the roughly $100 an hour that permanent doctors may earn. They’re also reimbursed for housing and transportation” (Genensway, Today’s Hospitalist). And the cost to the hospital or organization is even greater. “While a full-time hospitalist may cost...about $100 an hour including benefits...a locums company [charges] $200 an hour per physician” (Deborah Gesensway, Today’s Hospitalist).
The cost of locums, monetarily and emotionally, illustrates plainly the fact that “physician burnout is expensive to an organization, contributing to direct costs of recruitment and replacement when physicians leave or reduce their clinical work hours. For an organization, the cost of physician burnout can range from $500,000 to more than $1 million per doctor. This estimate includes recruitment, sign-on bonuses, lost billings and on-boarding costs for replacement physicians” (Sara Berg, AMA). Which is why it’s much easier and cost effective to retain someone by engaging them and not letting them languish or burnout.
The questions remain:
Why can’t healthcare organizations hold on to full-time physicians?
What is almost *everyone* doing wrong?
And even after looking closely at the Lack of Retention issue by parsing out the healthcare industry’s precariously high turnover rates, shocking physician shortage, and absurd cost of locums, we’ve hardly scratched the surface of all the problems physician leaders face daily. We’re in it for the long haul friends. In our upcoming post, we’ll continue to journey bravely by beginning to explore the next lack:
Lack of Communication
See you there!