Locum tenens physicians have long been a lifeline for rural hospitals. They provide essential temporary care when a staff provider is unavailable and the local talent pool is stretched thin.
Unfortunately, relying solely on the traditional locum tenens model to provide short-term care is financially unsustainable for rural hospitals. Healthcare systems in rural areas already face unique staffing challenges, and their fiscal safety net is growing increasingly fragile.
Healthcare staffing organizations with awareness of this dynamic are adapting their services accordingly to help rural hospitals find short-term surgical and physician staffing solutions that actually serve their needs. Instead of forcing rural providers into a transactional, “locums or nothing” binary, many of us in the contingent staffing industry are focusing instead on offering a transformational, cost-effective pathway to a true partnership.
The state of temporary physician staffing in rural areas
Our country is likely to face a shortage of 187,000 full-time physicians by 2037, and rural hospitals bear the brunt of this deficit. The average cost of a specialty physician vacancy for a rural hospital can run from $8,000 to $10,000 per day. Hospitals lose significant revenue by needing to refer patients outside their system for specialist care or elective procedures, delay primary care, and turn away emergency patients. In this environment, every day counts: reducing a single physician vacancy search by just six days can generate more than $4.3 million in additional revenue.
These nationwide physician shortages are driving up the rates of locum tenens usage everywhere in the country. However, the trend is particularly pronounced in rural areas of the U.S. Originally meant to help give local doctors a needed break or cover while they were on vacation, it’s now become a costly but seemingly necessary staple in more remote regions.
In one recent study, 81% of healthcare organizations reported using a locum tenens provider last year, and 80% of those survey respondents expected that usage to remain steady in the year to come. According to this research, the top reasons to place locum tenens physicians include filling roles until a permanent candidate is found (67%) filling in those who have left the facility (61%) maternity or paternity coverage (42%) vacation coverage (42%) meeting rising patient demand (35%) and supplementing staff during peak periods (28%).
This helps explain why locum tenens physicians are the fastest-growing segment of the healthcare staffing industry, according to projections from Staffing Industry Analysts (SIA). Hospitals are largely relying on locums physicians in the areas of primary care, emergency medicine, and surgery. This is especially true in rural areas where, according to NRHA data, the patient-to- primary care physician ratio in rural areas is only 39.8 physicians per 100,000 people, compared to 53.3 physicians per 100,000 in urban areas.
The disparity is even wider with specialist physicians: in urban areas, the average ratio of specialists to the general population is 263 for every 10,000 people, while in rural areas it’s just 13.1 for every 10,000. For example, 61% of U.S. counties, most of them rural, do not have a single practicing urologist to treat the urinary and sexual function problems that often increase with age.
Locum tenens providers are often called upon to save the day when rural hospitals cannot fill a physician vacancy. But because pay rates are continuing to rise faster than bill rates, this eats even further into rural hospitals’ already razor-thin margins, and ultimately exacerbates their financial problems.
The hidden costs of traditional locums
The cost of hiring a single locum tenens clinician can average $5,000 or more per day for a surgical specialist. This may seem, on paper, like an acceptable price to pay when the alternative is losing up to $10,000 per day in revenue due to a physician vacancy. However, there are other hidden costs that are tacked onto this already high price tag. This means that for hospitals, the cost of a locums physician is usually 20–60% higher than what the practitioner is actually paid, once the agency margin and pass‑through expenses are added.
One of the biggest sources of these hidden costs is the coverage ratio and lack of consistency in traditional locums models. Many of the rural hospitals Synergy Health Partners works with report disappointment with the actual coverage they get versus what they were promised by a locums-only agency. This is because a locums physician that also maintains a practice in the region may only be able to provide coverage maybe half the time. They may be stretched thin with their own specialist practice, or just simply may not have time in their day to take one more case, and instead refer the patient to the emergency room, where staff may already be strained.
With the traditional locums model, hospitals more often than not end up paying for full coverage but only getting half. Add to this the high rate of turnover among locums doctors, which drives patients away, and the skyrocketing rates of surge pricing in times of extreme shortage, and the traditional locum tenens model often becomes a prohibitively expensive proposition for rural healthcare organizations. Rather than helping hospitals retain the revenue lost by physician vacancies, these costs eat farther into their bottom lines than anticipated, making the net return on investment much smaller than needed to be sustainable.
Building a bridge to better care
Rural hospitals need a shorter-term, cost-certain pathway to physician staffing stability that eliminates the disruption, turnover, and surge pricing of traditional locum tenens. In other words, they need access to temporary providers, but under a model provides a pathway to a longer-term workforce solution.
Thankfully, my company and others are embracing a new and better way to approach temporary physician staffing. At Synergy Health Partners, we call ours the Bridge Solution.
With the Bridge Solution, hospitals can bring temporary doctors on board on a short-term basis that will reliably take call, build relationships within the hospital community, and fit into the culture of the hospital. If these temporary physicians turn out to be a great fit, the Bridge Solution offers a pathway to a longer-term contract that locums-only agencies do not offer.
One great example of a longer-term solution rural providers can bridge to is the fractional Surgicalist model. Under the fractional Surgicalist model, teams of surgeons who are either local or travel in from out-of-state rotate in predictable, multi-day blocks to provide 24/7 coverage. During this time, the Surgicalist doctors see patients, take call, and perform scheduled procedures without any other distractions from their own practice.
This singular focus during their set rotation block motivates and allows them to embed fully and build better rapport with their colleagues on permanent staff. Many of Synergy’s Surgicalist physicians sit on committees and take on charitable work within the community outside their placement hospital, which builds trust and improves engagement with patients.
With the Bridge Solution, hospitals get the convenience of engaging a locum tenens doctor, but with physicians and surgical teams that are reliable, cost-effective, and focused solely on your patients. It builds an easy foundation for a truly sustainable, data-driven partnership that will improve patient care and increase revenue retention, allowing you to better serve your community. Synergy Health Partners physicians have helped our partner hospitals retain nearly $1 billion in revenue, and that number continues to grow by the day. Rural hospitals understandably need temporary physicians, but there is a better way to engage with locum tenens providers–one that allows them to transition to more long-term, cost-effective care.
