Are you tired of being an employed physician or working for a staffing agency? Are you tired of being one of their many minions? Are you indeed ready to be your own boss? Are you ready to make some serious money? If so, then it’s time you start your own locums agency!
Are you tired of the bureaucracy and lack of respect from administrators? Are you frustrated by the lack of transparency throughout the staffing industry? Why not consider starting your own locums company?
While initially daunting, starting a locums agency is more straightforward than one might think. Why not start one yourself?
This country has over 200 locums agencies, pulling in about $6 billion in gross revenue from physicians’ services. That’s crazy! Why not be one of those many locums agencies making money with revenues throughout the industry expected to increase by 5-10% annually?
Oh geez, have you seen the revenues of the top 3 staffing agencies from 2022?
AMN Healthcare: $5 billion
Jackson Healthcare = $2 billion
CHG Healthcare Services: $1.7 billion
These are approximate revenues which include all locums and traveling health professionals.
Locums agencies and staffing companies are making millions off the services you provide, so why not put more money in your pocket rather than giving it away to more people that don’t provide direct medical care?
“If you can’t beat them. Join them.”
– Jim Henson.
It’s time to consider what it will take for you to start your own locums company. Big or small, it can be successful. You can have a one-man (or woman) locums agency or a larger locums agency that is single or multi-specialty.
Let’s examine what it will take for you to get started with your own locums agency.
Checklist to start your own locums company.
1. Legal and incorporation fees. You will likely want to work with a lawyer to set up your entity and make sure your legal documents are set up for you to contract with medical facilities. You could do much of this work, but having a lawyer do it is beneficial. Expect to pay $10 to 15K to incorporate your business and have the legal paperwork to start providing physician services.
2. Malpractice Insurance. Getting a “starter” malpractice policy will likely cost you about $15 to 20K. The pricing will depend on which specialties you require coverage in and what states you plan to work in. How many physicians work for your locums agency will also affect it. Of note, this would not include the cost of tail insurance. If you wanted to explore obtaining occurrence-based malpractice insurance or claims made with pre-tail, you might be looking at spending $50,000. There are sophisticated ways to pay based on days covered and profit sharing. Speak with a locums broker if you are interested to learn more.
3. Website. Getting an appealing, professional website could cost $50 to $3,000, depending on what you are looking for. There will be small monthly fees to maintain the website.
4. Join Locumsmart. An easy way to find medical facilities is to sign up for Locumsmart. It’s a vendor management system where hospitals post locums opportunities, and locums agencies can bid on the gigs. It will cost you about $15,000 for the first six months and then $1,000 monthly afterward. You can read more about Locumsmart on their website. You can avoid spending money on Locumsmart by relying on your current contacts and cold calling.
5. Travel agency. Hiring a travel agent to assist with travel arrangements is relatively inexpensive. A travel agent will cost $25 to 50 per booking, including booking flights, rental cars, and hotels.
6. Recruit physicians. Connecting with colleagues and posting on social media are free ways to recruit other physicians. You can pay to advertise on social media, which may be a reasonable option. What a lot of locums agencies will do is pay for a “contact” list. This is where you might pay $3,000 to get a list of 10,000 physician emails and phone numbers to connect with them.
7. Contact hospitals. You could do it yourself for free if you want to contact hospitals and clinics via email or phone. You could hire virtual assistant (VA) to do it for you if you wish to, which would cost about $7 to 15 per hour for a VA.
#8. Join NALTO. Not all locums agencies must join NALTO. In fact, many are not members of NALTO. Don’t waste your money on joining NALTO.
Final thoughts
Starting a locums company can be challenging, but it’s also a gratifying endeavor. Look at how many other physicians have been able to create their own agencies. Do you want to work for them or work for yourself? Do you want to be your own boss?
Starting a locums company is possible. Many people have gone before you, laying the groundwork for a successful business model that could be replicated. Using that work ethic that got you through medical school and residency, you can find a way to run your own locums agency successfully.
Aaron Morgenstein is a board-certified orthopedic surgeon and founder, FlexMedStaff.com, a fully transparent and free marketplace for physicians to find new clinical and non-clinical opportunities to improve work-life balance. Contact Aaron here.
