Locum Tenens Co-op: Survey Response Report

low cost 401kLast month, I introduced a concept that could be revolutionary for physicians doing locums if it gets off the ground.

A number of you responsed, taking the survey and leaving thoughtful comments. Thank you for those. Today, I’ve got the team back to report the survey results and to respond to a number of the comments.

Read on to see the positive responses to the concept of a member-owned physician locum tenens co-op, and how the co-op could address the concerns of the survey takers.

There will also be an opportunity to share a survey designed for hospitals and groups that are responsible for hiring locum tenens physicians to fill open positions. The remainder of this post is written by the Locum Tenens Co-op Team.

Locum Tenens Co-op: Survey Response Report

 

Hello again,

A few weeks ago we floated the idea of creating a technology-enabled locum tenens co-op. If you have not seen the post, it can be found here.

Kudos to you all and our friend PoF. We started to get responses to the survey as soon as the post was published. In fact, by 8 AM or so we had already received over one hundred responses.

 

(We promised a $10 gift card to the first 100 respondents. The gift cards were emailed out two weeks ago. If you submitted the survey before 8AM and have not received the card, please check your spam folder. If you do not have it there, please email the post to us at [email protected] and we will figure out a way to get it to you)

 

As this is written, we have about 227 responses. At this sample size, we believe the trends are set and additional data may not significantly alter the results.

In a nutshell, most of you enthusiastically support the idea. But, let’s drill deeper into what you said before laying out the inferences and next steps. Here is the response data:

 

 

 

 

Key Takeaways

 

  • We believe the survey results indicate pretty strong support for the idea and would be sufficient to raise the capital needed to launch and become operational.
  • There appears to be enough commitment from the respondents to create a reasonable amount of ‘shifts inventory’ available in the marketplace to get employer attention.
  • Respondents are apprehensive about employer buy-in. A majority say that the employers may ‘give it a try’ but may not necessarily make the switch in a committed way.
  • It will be far too risky to start anything until we gauge employer interest.

 

Next Steps

 

We will continue to work on the legal/operations and to define the structural framework.

set for life insuranceOur research tells us that Minnesota may be the best state to incorporate. There are many law firms that specialize in this type of work and can help us create the structure and set this up.

We have a very concrete plan on the technology side of things. We have a handle on lining up people who will operate the co-op (management, sales, support) and we feel confident that we can engage some thought leaders (guess who we are thinking of!) among physicians to help champion this!

However, will need to engage the law firms and plan this properly. Before we do that (and spend some serious money), we need to gauge employer sentiment via a similar survey.

 

Here is what we’ve come up with: Employer Survey: A Physicians Co-op for Locum Tenens Services

 

Since there are no social media influencers that we know of among medical practices, we have no easy way to publish this survey. We could try to spam them by getting their emails via some lists but believe that would be against the spirit of the co-op! Plus we may not get to the right people.

 

So how do we feel their pulse?

 

Would you be willing to help us by forwarding the link on to any decision-makers from hospitals and practices that you know?

 

Once we have the responses, we will publish those for you as well. We will review and discuss the results of the survey with you and come to a “go” or “no go” decision!

Survey Comments and Responses

 

lucidity locums
An overwhelming number of comments echoed encouragement, enthusiasm and a desire for participation. We thank you for those. All of you who provided emails and phone numbers, we will keep you posted individually as well.

While we did not receive a single comment that said this was a downright bad idea, some of you had some specific and well thought out concerns. Here are those selected comments and responses for your consideration:

 

Startup Costs

 

I think that your startup costs are way too high. This could be started out of a home office with somebody’s spouse that stays at home. You are also speaking of shifts only. I am in urology and most locums assignments are weekend or week long. you may need to change the terminology some.

I negotiated my own contract for locum work. it is done locally. I was somewhere between what they wanted to pay me and what they would pay locums. Interesting project, make sure you get some docs with real-life business acumen on board. I would change your pitch to start out with fewer docs at a higher buy-in. Use surgery center models or lithotripter models in urology as the base. Make it a buy-in on the company and less of a co-op.

 

Response:

  1. Our startup costs are high because we are trying to create a professionally operated, automated technology platform. Not a small locums company. This should be ready to scale in months. If it lingers on, we feel it will not take off.
  2. The platform should accommodate different rate structures… even among shifts. It should allow day/night/holiday rates variance, pager rates, shift premiums for Christmas etc., a way to negotiate a per case model ( Anesthesia!), and this goes back to the high set up costs.
  3. We really are committed to a Co-op model, so if this model does not appear to be workable, we will not move forward.

 

Physician Expenses

 

Nowhere in the introduction were travel expenses, hotels, nor malpractice insurance addressed.

 

Response: We thought about all that. The Co-op will carry an insurance policy. The employers can use that by paying the cost as pass-through or they can bring their own.

The technology platform should help do expenses for travel (that physicians can book themselves) and invoice as a passthrough to the employers. ‘All inclusive’ is another option that the platform may support. where physicians negotiate higher rates but pay their own travel and expenses.

 

Malpractice & Credentialing

 

This is an intriguing model. I have not done Locums because my kids were younger. But now that I am in mid 50’s would do it. What about malpractice and credentialing? And licensure? I suppose that is taken into account in the 15% booking fee?

This definitely warrants further investigation. Anytime we as doctors can get big business out of our pockets it will be better for all: patients and docs alike. Keep me posted.

 

Response:  Please see the response above for travel/malpractice. As to credentialing, the technology should support document repository and exchange. The co-op staff could facilitate as necessary.

 

Transparency

 

Some of the survey questions have too few possible responses with too abrupt a gradient, i.e. “I will strongly insist to be recruited through the Co-op” and the next choice is I will not try to persuade my prospective locums employer”. Otherwise, I’m all for a locums solution that works in a fiduciary capacity for locums physicians.

The locums marketplace is very difficult to navigate as an individual physician and many are forced to rely on predatory locums agencies. I do think that the Co-op finances would have to be transparent to members in order to maintain trust. When our own speciality boards have huge salaries and cash cows called MOC, I think most docs will be a bit gun shy.

 

Response: Agreed. We did not involve any professional statistician or pollster. some questions could have been rewritten for better insights. Also agree that the transparency is key. Co-op structure is good because there are regulatory requirements that the cooperative keep books and records and shareholder lists. Pursuant to statute, the shareholder lists are available for inspection by shareholders for a proper corporate purpose. But shareholders also have a common law right to inspect the ‘books and records’ of the cooperative. The coop can and should, on top of that, define its bylaws to bring greater transparency that can not be revoked by the board.

 

Limited to Certain Specialties?

 

I am very intrigued by the idea, but wonder if it lends itself to certain areas of medicine like shift based work such as Anesthesia and Emergency Medicine. I also worry about travel costs and licensing fees that the members may inquire and if that is being factored into the equation.

 

Response:  Please see answer above about travel and expenses. As to being skewed toward EM/HM, we feel that it can work for everything. Perhaps EM/HM may lead it in getting off the ground but with properly deployed technology, even telemedicine would work.

 

I think you need buy-in from different subspecialties. Only if you have a balance of that can you market it to a wide group of hospitals.

 

Response: As we have said, if it does not have critical mass, it will be a bust! So when we set it up, we can target X number of members per specialty as a minimum. If we fail to recruit that number, we will abandon the effort and return people’s money. Unfortunately, there will be significant investment needed even to get to that point. But that is a risk perhaps worth taking!

 

Member-Owned versus Physician-Owned

 

I think this is a great idea, and I’ve actually mused about it several times myself. I would change the title of your post to something like “Member-owned locums company” as opposed to “physician-owned” as many privately-held staffing agencies advertise themselves as “physician-owned” when they are anything but democratic.

 

Response: We will get the nomenclature right in the subsequent documents.

 

Quality of Physicians

 

I am super concerned about certain physicians investing money and being locked in to working with them. We occasionally have locum physician and they may do one shift with us and never returned due to their lack of quality or their poor social skills.

When you lock a physician in with a buy-in, you are committing to working with them for the long haul. Be careful!!!! Sometimes it is hard to vet these physicians beforehand, so I would make sure you have some way to get them out of the co-op. Good luck!

 

Response: The membership must require that the physicians should be in good standing. They must go through a verification process. Even non-members who just want to work through coop need to have their profiles verified via primary source.

The co-op bylaws should be written to allow the board to terminate the membership for cause. This is another reason we do not want to rush into this. Ours is a litigious society. We need to do everything by the book.

 

Gaining Traction & Credentialing Database

 

I think this is a fantastic idea. I am a full-time locums physician and despise having to deal with recruiters all the time. The biggest barrier I see is being able to connect with hospitals and clinics around the country to convince them that this is a better option and gain some traction in the space. I believe there would be a significant marketing expense.

One more note- would be great if all of the data and necessary paperwork (CV, licensure, DEA, etc. and maybe even a standard accepted form to confirm completion of residency) is uploaded centrally and provided to the clinics and hospitals with one easy click. I have seen a few locums companies taut that they do this, but it has never worked well. Again, great idea and I look forward to seeing where this goes!

 

Response:: The technology platform must have the capability of managing these documents, monitoring expiry, sharing with employers etc.

As to marketing, yes, initially recruiting members and getting job contracts will require expenses. But the power of unity will mean this will be very efficient. The survey respondents said that they will advocate the co-op strongly!

 

A Fee to the Hospitals?

 

I was thinking of doing something similar with an Uber-like platform for physicians looking for Locum positions and hospitals trying to fill their open shifts, charging the hospitals a yearly membership fee.

 

Response: We are considering an annual fee for hospitals to help offset operating costs. We are also considering a much larger upfront contribution in exchange for a reduced booking fee. Let’s see if that works.

 

Licensing & Insurance

 

I would wonder which party would handle licensing and insurance in such a coop. My shift participation would probably be lower in early years compared to later years. I would be most interested in doing shifts close to where I live by not too close so as not to compete locally.

 

Response: We can have a tie-up with third parties for licensing help, life certifications etc. The costs will be directly paid by physicians or coop board may decide that coop does it. Please see the response above for Malpractice.

 

 

What do the Thought Leaders Think?

 

Interested, but would definitely need to see the thoughts of leaders in this field (WCI, PoF, etc.) as well as the hard questions answered. Esp. what is the incentive for hospitals to use this co-op rather than traditional locums companies, as well as what happens if “commitments” are not met, attrition, etc…

 

Response: This will not take off without champions on both sides. We know people on the physician side! We need a few thought leaders on the medical practices side too! If you know any possible candidates, please provide an introduction via [email protected]

 

[PoF: I think this is a great development and I hope to see it come to fruition. As I said in the prior post from the co-op consortium a month ago, I probably lined the pockets of several locums agencies with a couple hundred thousand dollars doing several years’ worth of locums.]

 

Locums for the Non-Shift Worker

 

As a surgical sub-specialist (urology- men’s health, male infertility, andrology. I do general urology as well though), I don’t necessarily work “shifts”. Have you thought of a way to integrate surgeons into this model as well as the “shift workers” (ER, anesthesia, radiology, etc…)? I would be very interested in investing but it might be harder to integrate us…

Having a well-designed platform and vetted members (board qualifications, etc…) will go a LONG WAY towards making this successful. With sufficient feedback, this can change the market

 

Response: That’s exactly what we are thinking and that’s why we want to invest in technology. The play here is not to start a mom and pop locums company!

 

[PoF: Whether or not you think of yourself as a shift worker, you do come and go from the clinic and / or hospital. It may be a shift of indefinite length, but it’s a shift. Anesthesia positions with home (or hotel) call are very common in locums. You get paid for covering a period of time, which could be 24 hours to 168 hours with additional pay if you go into the hospital.]

 

Managing Attrition

 

Managing attrition is key; most physicians aren’t looking for a lifetime of temporary job assignments. Trying things on, looking for the right temp to perm opportunity, deciding on a location to settle in, not having a ton of life direction right out of residency, being single and not owning property yet, etc. is I think why many if not most are looking for locums work. These things change over the months and years.

 

Response: If the co-op has critical mass, the variations are dampened. Just like deep water is calmer. So we will not move forward unless there is critical mass.

 

Value Added

 

I think there can be value added as compared to traditional locums. In other words: if the coop can have certain standards as to quality (years experience, subspecialty training, no history of documented adverse licensing/discipline/substance abuse issues), hospitals might seek out the co-op first as compared to locums company; and would potentially pay extra for it.

 

Response: Agreed. Please see another similar question above We will have a vetting process in place for members and non-members who want to work via the co-op.

 

Hospitals need something value added from Co-Op that locums companies cannot provide.

 

Response: We think the value-adds will be costs saving (15% booking vs 30 to 40% margins by traditional locum companies), quality physicians, and a good hedge against shift availability.

 

Who’s the Boss?

 

Lots of owners may mean it’s not clear who is in charge. Lots of potential for mismanagement. Getting clients and physicians to sign up may be much harder than you expect.

 

Response: Co-op structure supports all this. It is a ‘solved problem’. Many co-ops in the world have membership over a million!

We agree it is not simple. If it were, it would have been done already! But we are committed provided we know the risks and the path.

 

Licensing & Growth Strategy

 

The strategy should include multiple specialties and regions. May consider subcontract to licensing agencies initially with eventual in-house licensing staff.

 

Response: We are thinking about outsourcing licensing to a third party, but our technology will allow all document exchange etc. But that is, of course, a possibility. We are thinking high tech automation and lean operations. Not a bloated bureaucracy.

 

Reimbursement Rates

 

The most important data point will be reimbursement rates. If this is a huge network that can negotiate excellent reimbursement based on the total number of docs in the group, it will be very successful. Or will the coop leave reimbursement/billing up to the facilities, and focus simply on staffing?

 

Response: We would focus simply on staffing. The physicians will negotiate their pay rate with facilities and coop will pay the physicians and charge the practices. That’s it. The reimbursement will be outside our purview.

 

[PoF: Facilities should be willing and able to pay you more when not having an agency take 30% to 40% off the top.]

 

What about Dermatology?

 

I do worry that some specialties will be more heavily weighted in the pool of jobs, and smaller specialties such as Derm will not have jobs posted. I say that because FB locums groups and other general locums groups have very few Derm spots. That would be my only hesitation to investing. I cannot perform any other specialty positions.

 

Response We agree. Which prompts another idea: perhaps have membership commitment levels based on the market size? That way dermatologists can become members and get dividends, but do not have to commit to shifts at the same level at the expense of not getting the cash-back?

 


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PoF: After reading all of questions and responses, I imagine you have come up with some more of your own. Please ask them below. Also please consider forwarding the latest survey to the decision makers at your institution.

 

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10 comments

  • I really love this idea and again hats off for thinking outside of the box.

    Current companies providing locum services definitely make a profit at the doctors expense my taking a large haircut off the top. This co-op initiate appears to return some of those hard earned dollars back into the pockets of the people doing the work, which I am all for.

    The scope of the project is immense which is the most concerning part for it to be successful. It is like me trying to compete with Coca Cola and Pepsi by introducing a drink I made into the market. There is so many advertising dollars/marketing needed to make people aware that is an option and also to buy in.

    Again I hope this takes off and I agree with those above who voice concerns about start up cost and buy in by employers and employees. Keeping fingers crossed. Would be a great way to make a stance against businesses who profit off of doctors work.

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  • I sure hope it works. I do full-time locums (full-time as in nothing but locums); and the agencies can be a pain. The value of an agency for me is that they are the “in-between”…I can say “no” to the agency, and hot have to say “no” to the hospital. Similarly, if an agency calls me with a low offer, I can decline without having to tell a secretary for the department that I don’t want to come for “X”, when the secretary feels we make “too much money”.

    If your co-op can have a “go-between” in the salary negotiations, it will help the docs be able to negotiate their rates. I’ve had places I worked try to hire me full-time, at half the rate I make as a locums! It seems that they feel if they are negotiating with a doc, they don’t have to pay as much as they do if negotiating with a “company”. Ergo, give your co-op a “company” that the doc can do his/her negotiations with…

    • Locums Coop Initiative

      Very Interesting point planedoc. First time someone made this point.
      Our thought was, if the negotiations are done on technology (where you are sending offers back and forth without even talking to the other party) this task of ‘saying no’ is easier.
      But as you suggested, its easy to mitigate it theoretically. Have a ‘physician advocate’ on the staff. But once you introduce someone in the middle, you have added to costs.

  • snowcanyon

    I would strongly suggest that you incorporate in a state that does not enforce noncompetes for obvious reasons. I don’t know if Minnesota fits the bill, but Utah and California do. Very important. The most convenient state is not always the best….

  • RGH

    For any naysayers (who are probably not reading this blog post, but still…) a decade or so ago nobody would’ve even imagined that you could make a few extra bucks driving drunks home from the bar on weekends and now Uber is a juggernaut. A few years ago you had to shop for your own groceries – now you can pay someone from Shipt a few bucks and avoid long lines and screaming kids.

    Awesome idea ripe for docs to reclaim some of the power that we willingly handed over to big staffing companies who aren’t eager to give it back.

    I’d love the ability to browse short term contracts from my smartphone and pick up side gigs as I see fit. Probably will be moreso when my children become teenagers.

    Will be eagerly following any developments.

  • Psychexecutive

    I think it’s a great idea! Would be interested in more than just shift work though. I’m a psychiatrist and I know there is a tremendous need for coverage for weeks or months at a time. I get calls from locums all the time. I would much rather work with a physician owned or member owned group than the others. Would love to help if you are planning to incorporate non shift specialties.

    • Locums Co-op Initiative

      Great. Thank you. If you have filled out the survey and indicated that you are ‘very likely’ to get involved in managing the co-op , we will reach out to you about your interests and willingness. Could could also email us at [email protected] and we can be in touch that way.

  • Gasem

    I’m a retired anesthesiologist. I wonder if you have considered hooking up with retired locum company managers even on a consulting basis, to run by the viability of your ideas. These guys have made a career out of managing and marrying doctors to hospitals in need and probably well understand the legal and logistic environment. If you want this to fly the service offered can’t be very different than the service offered by the locum companies, though likely cheaper for sure. A goofed up anesthesia service is like a goofed up aorta in terms of severity of disease. Your job is to bring seamless order to the chaos.

    • Locums Co-op initiative

      Great point Gasem,
      We have consulted/involved several experts who know this business who are:
      1. Physicians
      2. Physician Executives
      3. Technologists
      4. Recruiters (Locum and staffing)
      5. Co-op experts
      6. Co-op Attorneys
      7. Domain experts (scheduling, credentialing, payroll)
      So we feel very confident about creating a professional, scalable and highly functional organization that will do this right. The survey also gave us a reasonable confidence that the physicians will adopt this. We are currently trying to see if there are a handful of employers out there who will support/champion it. So we request you urge any potential medical practices you know to complete the employer survey enclosed above. That would be a great help.

  • Vasantha

    CO-OP seems to be a good idea,
    I am an internist, switched from traditional practice to locums 2 years ago.
    So far i have better success when i contracted directly with hospital/hospitalist service rather than locum companies in terms of work satisfaction.
    One of the issues, i had with locum companies was that when a hospital wanted to contract me directly for part time, locum companies demanded way too much money to let me go off of contract.
    I look forward for more progress with this CO-OP idea.

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