The ‘True’ Hospialist Locums Market Rate
For many hospitalist locum physicians, also known as independent contractors, understanding the true market hourly rate has been a challenge. The key question is who sets the bench-mark or market from which the hourly rate should be based from?
First, the client such as the hospital, local hospitalist practice or management firm has a staffing need that can not be satisfied by the full-time employed physicians (FTE) and this is the basis for contracting for part-time locums physicians.
Traditionally this staffing need has been supplied by the national locums firms, but since a third party is involved within the client-physician relationship, staffing costs are significantly higher to the client. Most hospitalist locum physicians do not understand, but the locum firms can realize a profit of upwards of $500 per day of revenue per 12 hour shift that the hospialist worked. Over a traditional 7 day block of shifts this is around $3,500 of revenue for the locum firm.
Accordingly, the hospitalist locum market hourly rate is set by the locum firm which is then billed/charged to the client. Within this hourly rate includes the physicians rate per hour, locum firms profit/revenue per hour, and malpractice insurance cost (malpractice insurance is traditionally billed per hour that the physician works).
The benefit for the client to contract directly with the physician is to reduce their expenses. However, a hospitalist physician who understands the market will base his/her rate from the rate which the locum firm would bill the client. An estimated rate should be a 15% to 20% discount off of the rate that the locums firm would bill/charge.
The client who has the need for part-time staffing should budget this expense based on the hourly rate that the locums firm would bill/charge. Thus, a hospitalist physician who offers a 15% to 20% discount would reduce the clients expense for part-time staffing well over $1,000 per week.
Therefore, the hospitalist locums hourly rate is ‘set’ by the locums firm/industry and should be where negotiations between the client and hospitalist physician should start. Please feel free to contact us if you require further assistance or have questions.