The Cost of a Locum: A Simulation to Determine When You Are Paying Too Much for Your Anesthesia Locum Tenens Coverage

Abstract

Background: Current research on locum tenens physicians has primarily focused on their safety, reliability, and patient outcomes, leaving a significant gap in understanding the financial implications of their employment in health systems. Amidst a persistent shortage of physicians across specialties, healthcare organizations have increasingly relied on locum tenens to meet the rising demand for clinical services. This study aims to bridge the knowledge gap by evaluating the financial feasibility of employing locum tenens physicians compared to full-time anesthesiologists, given the context of growing physician shortages and increasing healthcare demands. Methods: We developed a Python simulation model to compare the costs of hiring locum tenens versus full-time anesthesiologists. The model inputs included hourly rates for both locum tenens and full-time anesthesiologists and the upfront hiring costs for full-time physicians. By plotting these costs against each other, the model identifies the breakeven point: the number of working hours at which the cost of employing a locum tenens physician equals that of hiring a full-time physician. Utilizing Monte Carlo simulations with data from the Northeastern United States, we assessed the variability and determined an average breakeven point across different scenarios. Results: The Monte Carlo simulation, based on 10,000 iterations, revealed an average breakeven point of 665 hours, corresponding to just over 11 weeks of 60-hour workweeks. This suggests that for any locum tenens engagement exceeding this duration, hiring a full-time anesthesiologist becomes more cost-effective for the healthcare institution. The simulation also showed that 28% of scenarios had a breakeven point below 60 days, highlighting the financial dynamics and decision-making complexities in employing locum tenens versus full-time physicians. Conclusions: The findings indicate that employing locum tenens physicians for durations shorter than 665 hours remains financially viable compared to the option of hiring full-time anesthesiologists. However, the significant variability observed in the simulations underscores the importance of context in making staffing decisions. Healthcare organizations must consider the specific needs and circumstances of their operations when deciding between hiring locum tenens and full-time physicians, especially for longer-term coverage requirements.