Reduce Costs, Losses, and Risks during the Recession with Locum Tenens

A few years ago, officials at Western Maryland Health System in Cumberland, Md. confronted what has become a common issue in this age of physician shortages. Emergency room on-call requirements were starting to wear down the full-time staff in certain specialties at the system’s two hospitals.

“After we lost two urologists to relocation and retirement,” said Dotsy Malone, Western Maryland’s physician recruitment coordinator, “we began to worry that we did not have adequate emergency coverage.”

The health system was concerned about turnover, increased malpractice risk, and other potential consequences associated with overburdened employees. So, they sought the help of a locum tenens firm to give the full-time staff a break.

During the current recession, some medical groups may balk at the cost of using locum tenens doctors. But for Western Maryland and other healthcare facilities that look closer at the return on investment, locum tenens physicians have become a vital and cost-effective component of the staffing mix.

“As an institution, we would rather invest in a permanent hire to meet demand,” said Malone. “But in cases where hiring a permanent physician just isn’t feasible, we still want to take care of our patients and doctors. Locum tenens help us fill that gap.”

Plus, when you consider the costs in addition to salary for a full-time physician—vacation, benefits, malpractice insurance, etc.—the cost of using a locum tenens is often close to equivalent.

“A locum tenens may, in some cases, be more costly, but that is not always the case,” said Nathan Yoder; manager of interim services for Flint, Michigan-based Radiology Business Solutions. Yoder said that Radiology Business Solutions, a national consulting firm that helps hospitals and radiology groups manage business issues, considers many other factors when determining whether using locum tenens physicians makes sense for their clients.

“We have been asked to fill openings to provide continuity of care and meet caseload demands, for absences due to maternity leaves, long-term illnesses, continuing medical education, and to support rapidly expanding practices,” he said. “We work with NALTO [National Association of Locum Tenens Organizations] members to find physicians who can help us meet demand in the short term.”

What follows are some of the other benefits seen by medical facilities that use locum tenens physicians on a regular basis.

Maintaining Revenue

The ability to hold onto revenue that would otherwise be lost due to a physician staff opening is one of the most common justifications for seeking locum tenens help. This need is now more acute due to the physician shortage in many specialties and the urgency of protecting revenue streams during the recession.

The money varies by region and specialty, but at a minimum, a medical group with an open physician position stands to miss out on several thousand dollars of revenue per day. In addition, patients made to wait too long due to a physician shortage may decide to go elsewhere and not return, causing further exodus of revenue.

“Aside from providing consistent customer service and excellent patient care, capturing revenue is another reason we use locum tenens,” said Yoder.

Maintaining revenue streams often goes a long way toward offsetting, or eliminating, locum tenens fees. Locum tenens physicians also reduce other hidden costs, as well.

Avoiding Hidden Costs

At Western Maryland, revenue wasn’t the primary driver for using locum tenens urologists. Instead, it was concerns about potentially overworked doctors.

“Our administration is very supportive about physicians’ expectations for call,” said Malone. “Fatigue isn’t good for patient safety or for our physicians’ quality of life. There needs to be a standard of care issue for us to seek locum tenens, and that was the situation, especially in urology.”

By using locum tenens physicians to provide some on-call relief, Western Maryland managed to avoid cost issues including increased malpractice risk and service inefficiency.

Satisfying Staff and Reducing Turnover

Taking on a locum tenens physician may be more expensive than keeping a full-time physician, but losing a full-time staffer and having to recruit, hire, and train a replacement is costlier than either of those other options.

Many medical groups find strategic use of locum tenens to fill gaps in radiology and other specialties to be an effective tool in keeping the other doctors,  staff members, and referring physicians satisfied.

“If we allow a radiology department to remain understaffed, it will take longer for the radiologists to complete the department’s workload,” said Yoder. “As a result, customer service and patient care suffer.  Additionally, the group members’ lifestyles suffer. The added stress and family issues that arise may then cause a physician to leave a practice at which they were previously happy.”

As with the associated lost revenue, the costs of replacing a full-time physician vary by region and specialty. The task of recruiting and hiring alone can cost many thousands of dollars—and that’s without including harder-to-calculate costs such as  work disruption and lower morale for employees left behind, as well as delays in patient care.

Many medical groups find that bringing in locum tenens physicians not only safeguards patient satisfaction (and thus protects the group’s market reputation), but also shows permanent staff how valued they are.

“How quickly a group reacts to an unforeseen absence is very important,” said Yoder. “The sooner we can assure the group’s physicians that the work will be covered, the more they’ll be able to focus on their work.”

Bonus Benefits

Sometimes, medical facilities even discover unforeseen cost advantages of locum tenens.

Western Maryland has been successful in recruiting several locum tenens physicians to fill permanent positions. The benefits of this approach include faster orientation time and lower risk associated with the new hire.

“We’ve been fortunate that the candidates we’ve gotten through our locum tenens firm have been high-quality people,” said Malone. “The quality is vital because they’re representative of our system and our physicians when they’re here. “And it’s wonderful when we’re able to hire them because they already know what to expect as they’re coming in. There’s a real confidence about retention because they’re already acquainted with the job, the system, and the community.”

One locum tenens physician turned down Western Maryland’s full-time offer for family reasons, but during his stint at the practice he provided a unique benefit: he expanded the skills of the staff by training them in some new techniques he’d learned in recent Mayo Clinic training.

It all goes to show that, although using locum tenens doctors carries additional up-front costs, numerous advantages await those groups that recognize the long-term financial benefits of locum tenens as part of comprehensive staffing strategy.

Jamey Morgan is president of Concorde Staff Source, a Milwaukee-based locum tenens, physician placement and allied health staffing firm. She is a founding member of the National Association of Locum Tenens Organization.