Locum Tenens — The Oddest Industry on the Planet
The industry that so many of us know as Locum Tenens is the oddest one on the planet. Do not interpret this oddity as having an association with the individuals who work as locum tenens. Physicians, Nursing Jobs, therapists, dentists, veterinarians, and all manner of other medical professions work as locum tenens. They are clinically excellent, thoroughly credentialed and vetted, socially adept, and highly skilled in every manner.
Even the term locum tenens is odd. It is used as a noun, “She is a locum tenens.” And it can be used as an adjective, “She is a locum tenens psychiatrist.” But the Latin grammar aside, why is locum tenens the oddest industry on the planet?
Most companies have a product or service that they offer for sale. They have that product or service ready and available so that when a person is interested and wants to make a purchase, a transaction follows, money changes hands, customer and proprietor are happy. As long as the proprietor or company keeps providing a great service and as long as customers keep coming and paying for that product or service, business is great.
Locum tenens works in a very different way. Locum tenens companies have two sets of customers to whom they must sell. Set one is a group of medical facilities that need temporary help for any number of reasons. Maybe they are recruiting and haven’t yet found that perfect emergency medicine physician. Maybe their census rises for three months every year and they don’t want to hire full time nursing staff year-round, when they really just need the extra help for those three months. Possibly, a dentist is going out on maternity leave and they need someone to fill in for three months until she comes back to work.
The second set of customers a locum tenens company has is medical providers, whatever their niche is. We will use physicians for our example here. Locum tenens companies provide great work experiences for physicians who want something temporary, whether temporary to them means two weeks or two years.
Now here is the odd part and what makes the locum tenens industry the oddest one on the planet. Locum tenens companies’ customers are also the product or service that they sell. They need to bring on medical facilities as a customer and then they turn around and sell them as a product. And they bring a physician on board as a customer, and then turn around and sell him or her as a product to the medical facility that they just brought on as a customer. It is a “Catch 22.”
In the industry, the term “fill rate” means the percentage of requests from a medical facility (customer) that the locum tenens agency is able to take care of by providing a locum tenens physician (product). So if three hospitals each need one physician and the locum tenens company provides each hospital one physician, the fill-rate is 100%. That rarely happens over the entire spectrum of medical facilities that any locum tenens company works with.
Numbers on locum tenens fill rates are difficult to find. But Staff Care publishes documents from time-to-time that have such information, and we will use their numbers here1. Although the data is a few years old, one could assume they are similar today and similar for all locum tenens companies, not just Staff Care.
- 2003 fill rate was 63%
- 2004 fill rate was 58%
- 2005 fill rate was 63%
So you can see that at best, a medical facility only gets the product/service they want about 2/3 of the time. The other 1/3 of the time they are just out of luck.
On the physician side, there isn’t a “fill rate,” but a rather telling statistic about how physicians make sure they get temporary jobs they want. Physicians who want to work locum tenens sign up, on average, with two or three locum tenens companies.
In reality, the medical facilities also sign up with two or three or seven or twelve locum tenens companies too. On each side, the theory is that the more locum tenens companies they sign up with, the better their chances of get the product/service they want.
Can you begin to see why locum tenens is the oddest industry on the planet?
- Customer one is the product/service for customer two.
- Customer two is the product/service for customer one.
- A locum tenens company works with the same customer number one as all of the other locum tenens companies.
- A locum tenens company works with the same customer number two as all of the other locum tenens companies.
- Both customers one and two feel the need to sign up with multiple locum tenens companies to get their needs met.
So is it worth it? Of course. Most locum tenens companies have year over year growth rates. Physicians, or other medical providers, are in the driver’s seat, as they can work 100% of the time if they are willing to take assignments that may not meet 100% of their requirements for the perfect assignment. Medical facilities, although they don’t get their needs met more than 2/3 of the time, at least get that 2/3, which is better than getting no help at all. And the biggest winner in the entire spectrum of the locum tenens industry is the ultimate customer; the patient.
When locum tenens are in place at a facility, patients continue to get great care, facilities can continue to provide that patient with a continuity of care that they would otherwise not be able to provide, and the patients get the best, most qualified medical providers that the profession makes available.
Reference: Staff Care Inc. 2005 Review of Temporary Physician Staffing Trends.
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