Physicians becoming Hospital Employees - Does it affect the Locum Tenens Demand?

Between 2010 and 2015, a milestone in the practice of physicians was reached. The number of physicians working as employees of a healthcare organization or a group practice surpassed the 50% mark. This direction of employment versus independent practices has been a growing trend. Hospital systems have been aggressively recruiting physicians for several years. Their financial model relies heavily on the negotiation of rates with insurers, and having employed physicians in-house enhances that bargaining power. What should continue to push this trend are the “pay for performance” economies within the Affordable Care Act. Another factor is a new generation of physicians that are more interested in work-life balance than investing time, money, and energy in building their own practice.

At first glance, it would seem this trend would decrease the demand for Locum Tenens. Upon further investigation, the opposite will probably be the case. One needs to look no further than the burgeoning contract nurse industry to see an important trend. Demand for contract nurses has historically been a year-round need, with summer vacation times for the in-house nurses creating some of the greatest demand.

As physicians continue to enter the market as hospital employees, many of the trends that have followed the historic nursing demand will be seen in physician demand. Mandatory vacations and the typical summer swings should increase with physician employment trends. Although the Staffing Industry Analysts predict a 6% increase for the locum tenens market, it should see increasing demand as more physicians move to the employment model.