2015 SURVEY OF TEMPORARY PHYSICIAN STAFFING TRENDS BASED ON 2014 DATA

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1 CERTIFIED BY THE JOINT COMMISSION AND THE TIOL COMMITTEE FOR QUALITY ASSURANCE 2015 SURVEY OF TEMPORARY PHYSICIAN STAFFING TRENDS BASED ON DATA 2015 Staff Care, Inc 5001 Statesman Drive, Irving, Texas (800) Member of the National Association of Locum Tenens Organizations

2 2015 SURVEY OF TEMPORARY PHYSICIAN STAFFING TRENDS BASED ON DATA Overview/Methodology Part I Key Findings Questions And Answers Trends And Observations Part II Key Findings Questions And Answers Trends And Observations Part III Review Of Assignments Trends And Observations Conclusion For additional information about this survey contact: Phillip Miller (800) Statesman Drive Irving, TX Member of the National Association of Locum Tenens Organizations Survey of Temporary Physician Staffing Trends

3 Summary Report 2015 Survey of Temporary Physician Staffing Trends, Based on Data OVERVIEW Staff Care is a leading healthcare staffing firm specializing in matching temporary (i.e., locum tenens) physicians, physician assistants, nurse practitioners, dentists and other healthcare professionals with hospitals, medical groups, government facilities, Federally Qualified Health Clinics (FQHCs) and other healthcare organizations nationwide. Established in 1992, Staff Care is a company of AMN Healthcare (NYSE: AHS), the leader in innovative healthcare workforce solutions and the largest healthcare staffing organization in the United States as ranked by Staffing Industry Analysts. Staff Care is proud to be certified by the Joint Commission and by the National Committee for Quality Assurance (NCQA) and to be the sponsor of The Country Doctor of the Year Award. The practice of one physician filling in for another who is temporarily absent from his or her practice is time-honored in the medical profession. Known as locum tenens (Latin for to take the place of ) temporary physicians have traditionally filled in for colleagues who are ill, travelling or otherwise occupied as a professional courtesy. It was not until the 1970s, however, that the use of locum tenens physicians expanded from limited, ad hoc assignments arranged by physicians themselves to a more broadbased and systematic component of medical staffing. Government grants allotted to make physicians available in medically underserved areas ushered in the modern era of locum tenens staffing, which now is a multi-billion dollar a year industry. Today, hospitals, medical groups, FQHCs, and many other facilities use locum tenens physicians for a variety of reasons, while at the same time a growing number of physicians are choosing to work on a locum tenens basis. Each year, Staff Care conducts a survey to track trends in locum tenens staffing, both among healthcare facilities who use temporary doctors and among physicians choosing to work temporary assignments. This report marks Staff Care s twelfth Survey of Temporary Physician Staffing Trends. Survey data may be useful to physicians, healthcare executives, policy makers, academics, journalists and others who monitor developments in the physician staffing industry. This year, for the third time, nurse practitioners and physician assistants are included in the survey Survey of Temporary Physician Staffing Trends 2

4 METHODOLOGY Staff Care s 2015 Survey of Temporary Physician Staffing Trends is based on surveys sent by to healthcare executives and locum tenens physicians, nurse practitioners, and physician assistants nationwide (in some cases, surveys were conducted by telephone). The survey also includes an examination of the temporary staffing assignments Staff Care conducted in calendar year. Data from past Staff Care surveys are included where applicable. Parts I and II of the survey were conducted throughout November and December of, during which time surveys were ed to a proprietary list of healthcare facility administrators and to physicians and other healthcare professionals known to practice on a temporary basis. Respondents were self-selected and included Staff Care clients and non-clients, as well as physicians, nurse practitioners, and physician assistants who have worked as locum tenens through Staff Care, through other staffing companies, or on their own. The final survey report was released in February, Part I of the survey examines why healthcare facilities, including acute care hospitals, medical groups, state-supported facilities such as behavioral health centers, FQHCs, and others use locum tenens physicians and how they evaluate the quality and services provided by locum tenens practitioners. Part II of the survey examines why physicians, nurse practitioners and physician assistants choose to work on a locum tenens basis, how they select temporary practice opportunities, how they are perceived by colleagues, and related matters. Part III of the survey indicates the type of locum tenens staffing assignments Staff Care conducted in calendar year. The breakdown of temporary practitioner days requested by profession and/or medical specialty is offered as an indicator of current provider supply and demand trends in locum tenens Survey of Temporary Physician Staffing Trends

5 Part 1 - Key Findings Survey of Locum Tenens Physician Users, Including Managers at Hospitals, Medical Groups, FQHCs, Government, and other facilities Number of Surveys Completed = 259 KEY FINDINGS OF PART I INCLUDE Primary care remains the specialty in most demand as locum tenens. 34.8% of healthcare facility managers surveyed said they used locum tenens primary care physicians sometime in, while 42.3% said they now are looking for primary care locum tenens physicians. 73% of healthcare facility managers said they use at least one locum tenens physician in a typical month, while 18% said they use four or more. 91% of healthcare facility managers surveyed reported they used locum tenens physicians sometime in. This is up from 90% last year, up from 73.6% the year before that, and the highest number Staff Care has recorded in any of its annual surveys. 42% of healthcare facility managers said they now are seeking locum tenens physicians. This is up from 39% last year, up from 32% the year before that and the highest number Staff Care has recorded in any of its annual surveys. Demand continues to accelerate for locum tenens NPs and PAs. 25% of healthcare facility managers said they used locum tenens NPs or PAs sometime in, compared to 19.5% last year and only 9.5% the year before that Survey of Temporary Physician Staffing Trends 4

6 Healthcare facility managers primarily use locum tenens physicians to fill in until permanent doctors are found or to address staff turnover. Over 68% said they use locum tenens while seeking to add permanent doctors while 67.2% said they use locum tenens to fill in for doctors who have left. 10.1% of healthcare facility managers said they will use locum tenens to address a surge in patients caused by the Affordable Care Act (ACA). 15.6% said they will use NPs and PAs to cope with changes brought by the ACA. Healthcare facility managers rated continuity of patient care as the main benefit provided by locum tenens physicians, while they rated cost as the primary drawback. 71% of health facility managers rate the skill level of locum tenens physicians as excellent or good. 27% rate the skill level of locum tenens as adequate, while only 2.1% rate the skill level of locum tenens as unsatisfactory. 48.7% of healthcare facility managers have adopted telemedicine, up from 43.5% last year and 42.9% the year before that. 81.1% of healthcare facility managers rated locum tenens physicians as worth the cost, up from 79.5% last year, while only 18.9% said they are not worth the cost Survey of Temporary Physician Staffing Trends

7 Questions Asked and Responses Received 1 Do you work for a: * Hospital 36.10% Other 32.20% Medical Group 16.70% Federally Qualified Health Center 11.80% Urgent Care Center 2.40% Indian Health Facility 0.40% Veterans Affairs or other federal facility 0.60% *This question asked for the first time in 2 Have you used temporary (locum tenens) physicians to supplement your existing staff any time during the last 12 months? YES 73.6% 75% NO 91% 9% 90% 10% 26.4% 25% 85% 15% 3 If yes, what specialties? Primary care (family medicine, internal medicine, pediatrics) 34.8% 28.2% 35.2% Behavioral health 29.9% 24.1% 31.0% Hospitalist 21.9% 24.1% 18.6% Nurse Practitioner 17.4% 12.4% 4.8% Surgery 14.7% 14.1% 12.4% Emergency medicine 12.9% 14.7% 9.7% Anesthesiology 9.8% 8.2% 8.3% Dental* 9.8% Internal medicine sub-specialties 8.0% 11.8% 7.6% Physician Assistant 7.6% 7.1% 4.7% Urgent Care 7.6% 5.3% Certified Registered Nurse Anesthetist 6.3% 6.5% 2.8% Neurology 4.9% 8.8% Radiology 4.5% 9.4% 4.8% Telemedicine* 4.5% Oncology 2.7% 5.3% 11.0% *This question asked for the first time in 2015 Survey of Temporary Physician Staffing Trends 6

8 4 Are you currently looking for locum tenens physicians to supplement your existing staff? 32% % 58% 39% 61% 68% 41% 59% 41% 59% YES NO 5 If yes, what specialties?* Primary care (FP, IM, PED) 42.3% 21.2% 35.9% Behavioral health 33.0% 34.6% 39.1% Nurse Practitioner 22.7% 15.4% 7.8% Hospitalist 18.6% 19.2% 17.2% Emergency Medicine 8.2% 21.2% 7.8% Surgery 8.2% 7.7% 7.8% Physician Assistant 8.2% 5.8% 1.6% Internal medicine subspecialties 7.2% 9.6% 6.3% Urgent Care 7.2% 3.9% Anesthesiology 6.2% 3.9% 3.1% Dental* 6.2% Certified Registered Nurse Anesthetist 5.2% 0.0% 1.6% Radiology 2.1% 0.0% 3.1% Oncology 1.0% 3.9% 9.4% Telemedicine* 1.0% *This question asked for the first time in 6 How difficult is it to find locum tenens coverage today compared to 12 months ago? % 26% 52% 18% 22% 60% 14% 16% 70% 13% 26% 61% 14% 24% 62% More Difficult Less Difficult The Same Survey of Temporary Physician Staffing Trends

9 22.7% 22.7% 21.5% 19.8% 7 In a typical month, how many locum tenens physicians and/or NPs/PAs do you use? 27% 55% 10% 8% 29% 57% 8% 6% 43.6% 45.1% 7.2% 4.1% % 37% 45.1% 55% 7.2% 4.1% 7% 1% None or more 8 In a typical month, about how many days of locum tenens coverage do you use? 42.7% 24.1% 10.1% 9.5% 6.8% 9.2% 10.1% 5.7% 10.1% % 7.0% 6.3% 9.7% 10.1% 8.9% 11.3% 8.9% 7.3% 1% None 1 to 5 6 to to to to to or more 9 Why do you or would you typically use a locum tenens physician? (check all that apply) Fill in until a permanent doctor is found 68.1% 54.9% 57.2% 57% 63% Fill in for staff who have left 67.2% 54.9% 58.2% 42% 46% Vacation/continuing medical education 48.7% 46.4% 36.1% 46% 53% Meet rising patient demand 12.9% 7.2% 10.1% 8% 9% Fill in during peak usage times 11.6% 11.1% 13.0% 9% 4% Maintain flexibility to upsize or downsize staff as needed 9.1% 9.8% 7.2% Maintain services while transitioning to physician employment 3.9% 3.3% 5.3% Telemedicine* 3.9% Maintain services during EMR training 3.0% 0.0% 3.8% Test market a new service 1.7% 0.7% 1.4% 0% 0% Ensure quality-based reimbursement 1.7% 0.0% 0.5% Reduce readmissions/medical errors 1.3% 2.0% 0.5% *This question asked for the first time in 2015 Survey of Temporary Physician Staffing Trends 8

10 10 What are the benefits/drawbacks of using locum tenens physicians? BENEFITS DRAWBACKS % 69% 64% 73% 41% 85% 86% 75% 86% 86% Allows continual treatment of patients Cost 48% 39% 31% 24% 28% 49% 46% 51% 60% 62% Immediate availability Familiarity with department/practice 41% 35% 38% 43% 41% 32% 34% 28% 35% 42% Prevent revenue loss Learning equipment/procedures 33% 28% 31% 25% 32% 22% 24% 15% Prevents existing staff burnout Managing multiple locum tenens staffing providers 6% 1% 4% 2% 6% 20% 37% 36% Other Credentialing issues 4% 3% 3% 17% 13% 15% Reduce medical errors/readmission Unable to bill for locum tenens services 4% 2% 2% Ensures quality based reimbursement 3% 3% 4% 1% 1% Cost 11 What is your perception of the general skill level of locum tenens physicians? % 57.0% 27.0% 2.1% 18.2% 53.3% 25.9% 2.6% 15.6% 49.5% 33.9% 1.1% 18.0% 39.0% 42.0% 1.0% 0.9% 63.0% 28.0% 0% Excellent Good Adequate Unsatisfactory 12 At your facility, how are locum tenens providers viewed by: COLLEAGUES ADMINISTRATION PATIENTS 1% 1% 1% 3% 0% 2% 2% 2% 4% 1% 1% 0% 1% 0% 0% 10% 7% 13% 10% 13% 5% 8% 13% 8% 11% 17% 17% 19% 31% 31% 24% 32% 24% 24% 28% 22% 18% 24% 24% 24% 17% 16% 16% 15% 13% 65% 60% 63% 63% 59% 71% 72% 69% 64% 64% 65% 67% 64% 54% 56% Accepted by Tolerated Unsure Not accepted Survey of Temporary Physician Staffing Trends

11 13 Please rate locum tenens physicians compared to your permanent medical staff in the following areas: PATIENTS TREATED PER DAY % 45% 4% 55% 44% 1% 58.5% 39.2% 2.3% 39% 55% 6% 41% 53% 6% Same Fewer More 14 Please rate locum tenens physicians compared to your permanent medical staff in the following areas: GROSS CHARGES GENERATED PER DAY % 47% 5% 48% 51% 1% 54.0% 41.5% 3.4% 37% 57% 6% 43% 49% 8% Same Fewer More 15 When conducting your search for locum tenens physicians, with how many search firms/ staffing agencies do you generally work? % 54.2% 21.4% 3.4% 16.4% 57.9% 21.1% 4.6% 21.7% 47.8% 22.3% 8.2% 16% 54% 18% 12% 16% 56% 24% 4% Four or more Two to Three One None 2015 Survey of Temporary Physician Staffing Trends 10

12 16 17 What are the most important factors in selecting a temporary staffing firm? (check all that apply) Quality of physicians provided 82% 82% 78% 87% 84% Availability of candidates 67% 64% 66% 71% 84% Cost 65% 61% 47% 74% 51% Customer service 47% 44% 45% 61% 57% Contract Flexibility 34% 34% 36% 35% 42% Manages the locum tenens process 22% 21% 27% Malpractice Insurance 19% 14% 22% 26% 26% Provides a locum tenens billing service 7% 4% 6% Other 6% 4% 1% 9% 5% Rate the importance of the following factors when selecting a locum tenens candidate: Availability 94.1% 5.9% 0.0% Training 72.2% 26.5% 1.3% Cost 71.6% 26.7% 1.5% Experience 79.7% 19.5% 0.8% Availability 94.2% 5.8% 0.0% 5.8% Training 71.5% 28.5% 0.0% Cost 71.1% 26.3% 2.6% Experience* 72.3% 26.4% 1.3% Availability 88.5% 10.4% 1.1% Training Cost 70.8% 26.9% 67.8% 29.8% 2.3% 2.4% Very Important Somewhat Important Unimportant 18 *Question asked for the first time in What is your facility s position regarding companies that provide management of multiple locum tenens staffing services? 54.5% 15.3% 3.4% 26.8% 51.6% 56.7% 34.6% 32.6% 11.8% 8.0% 2.0% 2.7% I am unfamiliar with this concept We use a managed service provider We do not use a managed service provider We are considering using a managed service provider Survey of Temporary Physician Staffing Trends

13 Has your facility integrated telemedicine 19 into any of its departments? % 48.7% 43.5% 56.5% 42.9% 57.1% If yes, which ones? 6.4% 13.3% 24.1% 30.2% 14.2% 41.8% 15.9% 33.3% 17.7% 38.9% 30.2% 38% Yes No Behavioral Health Other Radiology Neurology Primary Care 21 How would you rate the value of locum tenens physicians to your facility? 81.1% 79.5% 18.9% 20.5% 85.1% 14.9% % 21% % 16% Worth the cost Not worth the cose 22 How do you see your facility managing through the changes coming with the Affordable Care Act? (check all that apply)* Keep same staff 44.7% 45% Add more permanent staff 33.3% 31.1% Utilize advanced practice professionals 15.6% 16.6% Utilize locums or float pool for surges of patients 10.1% 7.3% *Question asked for the first time in 2015 Survey of Temporary Physician Staffing Trends 12

14 Trends and Observations OVERVIEW Part I of Staff Care s 2015 Survey of Temporary Physician Staffing Trends provides insight into how often healthcare organizations use temporary (locum tenens) physicians, why they use these physicians, the benefits locum tenens physicians provide, how they compare to permanent physicians and the perceived skill levels of locum tenens physicians. Selected trends and observations from the survey follow: USE OF LOCUM TENENS GROWING Staff Care s 2015 survey indicates that the use of locum tenens physicians at hospitals, medical groups, and other facilities continues to grow. When asked if they had used locum tenens physicians any time during the last 12 months, 91% of healthcare managers said yes, up from 90% the previous year. Only one other time in the years that Staff Care has conducted this survey have more than 80% of respondents indicated they had used locum tenens physicians in the previous 12 months (see chart below). Have You Used Locum Tenens Physicians in the Previous 12 Months? 91% The increased use of locum tenens physicians is being driven primarily by two trends: the physician shortage and the transition away from private, independent medical practice and toward physician employment. THE PHYSICIAN SHORTAGE There are a variety of reasons why the shortage of physicians is becoming more pervasive, but at its most basic the problem is a simple one of supply and demand. Due to a growing and more elderly population, and the wider availability of health insurance that has occurred as a result of the ACA, demand for medical services is rising. The supply of physicians, however, has remained relatively flat over the last 20 years. As a result: The Association of American Medical Colleges (AAMC) forecasts that by 2020 the U.S. will face a deficit of 91,000 physicians. By 2025, the deficit will grow to 131,000 physicians, about half of them in primary care and half in specialty areas. The American Academy of Family Physicians (AAFP) projects a shortage of 149,000 physicians by 2020, while the Health Resources and Services Administration (HRSA) projects a shortage of 65,000 primary care physicians by More than 20 medical societies have released reports projecting shortages in their specialty areas % 85% 77% 79% More than 30 state medical societies or hospital associations have issued reports projecting physician shortages in their geographic areas Survey of Temporary Physician Staffing Trends

15 HRSA currently designates over 6,000 Health Professional Shortage Areas (HPSAs) for primary care nationwide and some 3,300 HPSAs for behavioral health in which a combined 80 million Americans live. Between 1987 and 2007, the population of the U.S. grew 24%, while the number of physicians trained in the U.S. grew by only 8% (American Medical News, March 29, 2010). As more physicians become employed, turnover becomes a more important factor in physician staffing. Private practice doctors who own their own buildings, who have equity in their equipment and who hire their own employees have a strong financial and emotional stake in their practices. These physicians are less likely to pull up stakes than are doctors who receive a paycheck and can more easily exchange one employer for another. Like the general population, the physician population is aging. Approximately 42% of physicians today are 55 years old or older. A coming wave of physician retirements is another key reason for projections of a physician shortage. THE RISE OF PHYSICIAN EMPLOYMENT In the traditional form of medical practice in the United States, doctors were independent of larger organizations and essentially owned small businesses, working in solo settings or in small groups. In recent years, that paradigm has shifted dramatically. According to Merritt Hawkins (which, like Staff Care, is a company of AMN Healthcare) today about 90% of newly hired physicians are employed by either a hospital, a medical group, an FQHC, an urgent care center or a variety of other employers (see Merritt Hawkins Review of Physician and Advanced Practitioner Recruiting Incentives). Estimates vary, but it is likely that fewer than 50% of all physicians today remain in private practice (see Part II of this report below). In the past, hospitals, medical groups and other facilities rarely had to worry about physician turnover. Now they do. The chart below shows current annual physician relocations rates by selected specialties: Annual Physician Relocation Rates 10.7% Cardiology 13.8% Family Practice 12.5% General Surgery 12.2% Internal Medicine 13.9% Neurology 11.9% OB/GYN 16.1% Psychiatry Source: SK&A. Physicians on the Move. October,. Gaps in the medical staff, caused either by the shortage of physicians or by physician turnover, accelerate the need for temporary, locum tenens physicians to provide access to care and maintain revenue, a fact underscored by Staff Care s 2015 survey Survey of Temporary Physician Staffing Trends 14

16 TOP REASONS FOR USING LOCUM TENENS The number one reason healthcare facility managers cited for using locum tenens doctors in the 2015 survey was to fill in until a permanent doctor is found. In instances where healthcare facilities do not have enough doctors (a widespread problem due to the physician shortage) and are seeking more, they often use locum tenens physicians to maintain services and revenue. The second most frequently cited reason for using locum tenens physicians was to fill in for staff who have left. Though physicians who have left may include those who retired or passed away, in general it refers to those who have left for another opportunity (i.e., turnover). In addition to these reasons, some healthcare facility managers use locum tenens physicians to maintain staff flexibility. Locum tenens doctors allow facilities to ramp up during peak usage times such as flu season or, in vacation communities, during an influx of temporary residents. WHO IS IN DEMAND? Of those respondents who used locum tenens physicians in the last 12 months, 34.8% indicated they had used primary care physicians, defined in this survey as family physicians, general internists, and pediatricians. This is up from 28.3% in but about the same as when it was 35.2%. More healthcare facility managers said they had used primary care locum tenens physicians in the last 12 months than any other type of doctor. Behavioral health providers (psychiatrists and others) were second on the list. About 30% of healthcare facility managers indicated they used locum tenens behavioral health professionals in the last 12 months, up from 24.1% in and down from 31% in. Third on the list of reasons for using locum tenens was to fill in for doctors on vacation or pursuing medical education. This reason also is tied to the trend toward physician employment. In the past, when more doctors were in independent practice, they were less likely or able to take regular vacations. Vacations, however, now are a part of virtually all physician employment contracts and today many employers use locum tenens doctors to fill in for the growing number of physicians who take regular time off. About 32% of all physicians in the U.S. are in primary care (see Part II below), so it is not particularly surprising that they are more utilized as locum tenens than any other type of doctor. However, only about 3.5% of all physicians are psychiatrists. The fact that behavioral health professionals are the second most utilized type of locum tenens provider after primary care physicians underlines the acute shortage of providers in this field. This trend is likely to be exacerbated by the fact that psychiatrists are older, on average, than almost any other type of physician (see following chart): Survey of Temporary Physician Staffing Trends

17 Psychiatrists by Age 40 or younger or older 10% 20% 31% 39% Source: AMA Physician Master File. Approximately 60% of psychiatrists are 55 years old or older, compared to 42% of all physicians. Many behavioral healthcare facilities today are unable to find permanent staff and have come to rely on locum tenens providers to maintain services. NPs AND PAs MOVE UP THE LIST Prior to, Staff Care received minimal requests for locum tenens NPs and PAs. In most cases, healthcare facilities were able to recruit the permanent NPs and PAs they needed and did not require temporary providers to fill gaps in their staffs. In, only 12.4% of healthcare facility managers surveyed said they had used locum tenens NPs and PAs in the previous 12 months. By contrast, in the 2015 survey, 25% of healthcare facility managers said they had used locum tenens NPs and PAs in the previous 12 months. This is a clear sign that the supply of these advanced practitioners is becoming strained and that shortages are emerging. HOSPITALISTS, SURGEONS, EMERGENCY MEDICINE & OTHERS Provider shortages are not limited to primary care, behavioral health and advanced practice. Twenty-two percent of healthcare facility managers surveyed indicated they had used locum tenens hospitalists in the previous 12 months, while 14.7% said they used locum tenens surgeons, and 12.9% said they had used locum tenens emergency medicine physicians. Internal medicine subspecialists, urgent care specialists, neurologists and many other types of physicians can be in short supply and healthcare facilities may require locum tenens providers to fill gaps until permanent physicians can be found. FREQUENCY OF USE The use of locum tenens physicians is measured in temporary physician days. A small medical group might use one locum tenens physician for one day during a month to cover for a doctor out on continuing medical education (CME), while a hospital might use three locum tenens physicians over a period of three months for a total of 180 days to cover for a physician on disability and to maintain services while seeking to fill two permanent positions. Over 77% of respondents to the 2015 survey indicated that in a typical month they schedule at least one day of locum tenens coverage, while the remaining 23% said that in a typical month they do not schedule any days of locum tenens coverage, down from 24.1% the previous year and 42.7% the year before that. About 55 % of facility managers said they schedule six or more days of locum tenens coverage in a typical month, while over 11% said they schedule 31 or more days of locum tenens coverage in a typical month. The latter group may be facilities in traditionally underserved rural or inner city areas that have difficulty finding doctors, or larger facilities that experience high turnover or have multiple gaps in their staffs due to vacations, CME, illness and related reasons Survey of Temporary Physician Staffing Trends 16

18 BENEFITS AND DRAWBACKS OF USING LOCUM TENENS The main benefit of using locum tenens physicians, cited by 70% percent of those surveyed, is to maintain continuity of patient care. When full-time physicians are absent for any reason, patients may not be able to access the care they need, or they may migrate to other sites of service. Locum tenens physicians allow healthcare facilities to maintain the continuity of care that is important to both quality outcomes and to patient satisfaction and loyalty. By seeing patients who might otherwise have gone elsewhere, locum tenens physicians also allow medical facilities to maintain revenue streams. The opportunity cost of not having a physician in place can be considerable. According to a study by Merritt Hawkins, physicians on average generate $1.5 million a year on behalf of their affiliated hospitals. The chart below indicates how this breaks out on a pro-rated monthly basis for several medical specialties: Revenue Generated by Physicians for Hospitals Pro Rated Over One Month Family Practice Internal Medicine General Surgery Psychiatry $172,297 $163,995 $155,055 $108,553 Source: Merritt Hawkins Survey of Physician Inpatient/Outpatient Revenue Forty-one percent of those surveyed said that preventing revenue loss was a benefit of using locum tenens physicians, while 48% identified the immediate availability of locum tenens physicians as a benefit. Using locum tenens physicians also can be part of a physician retention strategy, helping to prevent the burn-out of existing staff, particularly during peak usage periods. Thirty-three percent of administrators surveyed identified preventing staff burn-out as one of the benefits of using locum tenens physicians. HOW DO LOCUM TENENS PHYSICIANS RATE? Healthcare facility managers were asked to rate the general skill level of locum tenens physicians. The majority (71%) rated the skill level of locum tenens physicians as either good or excellent, approximately the same as in and up from 65.1% in. Twenty-seven percent of healthcare facility managers rated the skill level of locum tenens physicians as adequate, while only 2.1% rated the skill level of locum tenens physicians as unsatisfactory. Physicians practicing locum tenens today are rigorously screened because staffing firms are at risk for their malpractice insurance and because they compete with each other based on the quality of physicians they are able to provide. As a result, the quality of locum of tenens physicians is generally considered to be high or at least satisfactory, as is reflected in survey responses. Healthcare facility managers also were asked to indicate how locum tenens physicians are viewed by various parties, Survey of Temporary Physician Staffing Trends

19 including permanent physicians on their staffs, administrators, and patients. The majority (65%) said that locum tenens physicians are accepted by permanent staff physicians, 71% said they are accepted by administrators, and 65% said they are accepted by patients. If not accepted by peers, administrators and patients, locum tenens physicians are at worst tolerated by these groups. No more than 2% of survey respondents indicated that locum tenens physicians are not accepted by fellow physicians, administrators or patients. Healthcare facilities are using locum tenens telemedicine primarily for behavioral health. About 39% of those who said they are using locum tenens telemedicine are doing so to provide behavioral health services. Sixteen percent are using locum tenens telemedicine for radiology, and 13.3% for primary care. Neurology may be a growth area in locum tenens telemedicine. Over 14% of those who are using locum tenens telemedicine are doing so to provide neurology services. MAGED SERVICES PROVIDERS LOCUM TENENS TELEMEDICINE MORE COMMON Healthcare facility administrators were asked in the 2015 survey if they have integrated telemedicine into any of their departments a question first posed in. As a response to physician shortages, or because they may not be able to support full-time physicians in certain specialties, some facilities are using telemedicine to extend the types of services they provide. About 49% of respondents indicated their facilities have integrated telemedicine into their departments, up from 43.5% the previous year and 42.9% the year before that. The locum tenens staffing process at some healthcare facilities is becoming increasingly complex. Coordinating the schedules of multiple locum tenens providers staffed by multiple temporary staffing firms can create logistical and billing challenges. In response, healthcare facilities may elect to outsource the entire locum tenens function to a Managed Services Provider (MSP) which will oversee all locum tenens staffing issues, including scheduling, recruiting, logistics, and billing. Healthcare facility administrators were asked for the third time in the 2015 survey about their position on companies that provide management of multiple locum tenens staffing services. Only 3.4% said they now use the services an MSP to manage their locum tenens needs, down from 11.8% in and 8% in. However, the majority (54.5%) still are not familiar with this relatively new service concept Survey of Temporary Physician Staffing Trends 18

20 ARE LOCUM TENENS WORTH THE COST? Healthcare facilities pay a daily rate for the services of locum tenens physicians, a rate that can range from several hundred dollars to over $1,500, depending on the specialty. Balanced against this are the various benefits locum tenens doctors provide, including the ability to maintain both medical services and revenue. On balance, the great majority of healthcare facility managers surveyed (81.1%) indicated that locum tenens physicians are worth the cost, up from 79.5% the previous year. RESPONDING TO THE ACA When asked how they would respond to the Affordable Care Act, 44.7% of those surveyed said their facilities would keep the same staff they have now. However, over one-third said they would add more permanent staff, while 15.6% said they would utilize NPs and PAs to help handle demand and 10.1% said they would use locum tenens or float pools of providers to deal with an anticipated surge in patients Survey of Temporary Physician Staffing Trends

21 PART 2 Survey of Physicians and Advanced Practitioners Working On a Locum Tenens Basis Number of Providers Surveyed = 2,087 KEY FINDINGS Medical practice is no longer a one-sizefits-all proposition. The traditional practice model, in which doctors own their own solo practice or are partners in a group, is evolving as physicians embrace a variety of practice styles. These can include the traditional, private practice model, but may extend to employment by a hospital, a FQHC, an urgent care center, a retail clinic, an insurance company, a corporation or a number of other employers. In addition, a growing number of physicians today are electing to work part-time, are transitioning out of clinical roles and into management positions or taking other steps to modify their practice style. The following chart shows results to a question posed by a national physician survey conducted by Merritt Hawkins in for The Physicians Foundation (www. physiciansfoundation.org). In the next one to three years, do you plan to (check all that apply): Continue as I am Cut back on hours Retire Switch to a cash/concierge practice WORK LOCUM TENENS Cut back on patients seen Seek a non-clinical job within healthcare Seek employment with a hospital Work part-time Close my practice to new patients Other Relocate to another practice/community * 56.4% 18.2% 9.4% 6.2% 9.1% 7.8% 10.4% 7.3% 6.4% 2.4% 5.3% N/A Source: A Survey of America s Physicians: Practice Plans and Perspectives. The Physicians Foundation/ Merritt Hawkins. September,. As the survey indicates, the majority of physicians (56%) plan to continue practicing as they are. A significant minority, however, (44%) plan to make one or more changes to their practices. Locum tenens is one of the various practice alternatives physicians plan to pursue. Over 9% of physicians indicated they plan to work locum tenens in the next one to three years, up from 6.4% in (see chart below). Physicians Planning to Work Locum Tenens in the Next One to Three Years % 6.4% 7.5% Source: A Survey of America s Physicians, The Physicians Foundation/Merritt Hawkins/,, Survey of Temporary Physician Staffing Trends 20

22 Physicians and others do not always do what they say they will on surveys. However, even if fewer than 9% of the approximately 750,000 physicians now in patient care choose to work locum tenens in the next one to three years, the effect on the physician workforce would be significant (see chart below). Impact of Physicians Working Locum Tenens % WORKING LOCUM TENENS 9.1% 4..5% 2.25% * 67,500 22,750 16,875 Why are a growing number of physicians choosing to practice locum tenens? What are some of the characteristics of locum tenens physicians, and to what extent do these physicians feel they are accepted by colleagues and patients? What is their ideal assignment length, how far are they willing to travel, and how do they compare locum tenens practice to permanent practice? Part II of Staff Care s 2015 Survey of Temporary Physician Staffing Trends, completed by physicians, physician assistants and nurse practitioners who work on a locum tenens basis, examines these and related questions. For the purposes of this report, all respondents will be referred to as physicians, though it is understood this group includes some physician assistants and nurse practitioners Survey of Temporary Physician Staffing Trends

23 Key Findings Part II of Staff Care s 2015 Survey of Temporary Physician Staffing Trends KEY FINDINGS OF PART II INCLUDE The majority of locum tenens physicians (92.5%) have worked in a permanent practice, but a growing number (7.5%), indicate that they have only worked on a locum tenens basis. A growing number of newly trained physicians are turning to locum tenens as a first practice option. 21% of physicians surveyed in began working locum tenens directly after completing their residencies, up from 16% in and 14.3% in. One result of this trend is that the number of younger locum tenens physicians is increasing. 14% of locum tenens physicians surveyed in are 40 or younger, compared to 6.1% in and 6.9% in. In addition, 10.7% of locum tenens physicians surveyed in have 5 years of medical practice experience or less, compared to 5.1% in and 6.2% in. The survey therefore suggests that locum tenens is no longer just for older or semi-retired physicians but is being embraced by young doctors as well. Only 16.2% of locum tenens physicians surveyed in identified themselves as being in primary care, down from 17.3% in and 19.7% in. The survey therefore suggests that physician shortages are not confined to primary care and that many specialist locum tenens physicians also are filling gaps in healthcare facility medical staffs. Of those who have worked in a permanent practice, 81% say locum tenens is as satisfying or more satisfying than permanent practice, while 19% say that permanent practice is more satisfying than locum tenens Survey of Temporary Physician Staffing Trends 22

24 Locum tenens physicians are widely accepted by colleagues, administrators, and patients when on temporary assignments. Fewer than 2% of locum tenens physicians surveyed said they were not accepted by these groups. The survey indicates that locum tenens physicians may present one way to alleviate physician shortages at Veterans Administration facilities. Over 81% of locum tenens physicians surveyed in said they would be willing to work for VA and other government facilities. A significant number of locum tenens physicians are seeking permanent positions. Over 27% of locum tenens physicians surveyed in said they are looking for permanent positions, up from 25% in. A growing number on locum tenens physicians have joined LinkedIn over 52.2% of those surveyed in compared to 42.9% in. An analysis of these and other findings of Part II of the survey follows a breakdown of survey results below. Responses from previous years the survey was conducted are included where applicable. Locum tenens physicians also may present a way to alleviate physician shortages in underserved areas through telemedicine. Over 66% of locum tenens physicians surveyed in said they would be willing to work temporary telemedicine assignments Survey of Temporary Physician Staffing Trends

25 1 Questions Asked and Responses Received Responses to Part II of the survey are listed below. What is your specialty? Primary Care (FP, IM, PED) 16.3% 17.3% 19.7% Anesthesiology 10.5% 13.9% 16.7% Nurse Practitioner Emergency Medicine 7.8% 1.5% 6.0% 7.6% 6.8% 4.2% Behavioral Health 5.6% 8.7% 17.2% Physician Assistant IM sub-specialties Radiology Surgery Hospitalist Oncology Neurology Urgent Care 5.0% 0.4% 5.1% 4.9% 4.5% 8.7% 4.6% 7.8% 7.6% 4.2% 7.7% 10.0% 4.0% 3.4% 2.7% 2.1% 1.7% 2.2% 1.6% 1.3% N/A 1.1% 1.2% N/A Other 24.7% 24.0% N/A What is your age? 2 3 How many years have you been in practice? 30 or younger 1.7% 0.3% 0.8% Less than one year 1.6% 0.9% 1.3% 31 to % 5.8% 6.1% 1 to 5 years 9.1% 4.2% 4.9% 41 to % 13.2% 15.6% 6 to 10 years 10.0% 5.1% 5.8% 51 to % 30.3% 32.4% 11 to 20 years 23.9% 19.2% 20.1% 61 to % 33.2% 28.0% 21 or more years 55.4% 70.7% 68.0% 71 plus 10.5% 17.3% 17.1% 2015 Survey of Temporary Physician Staffing Trends 24

26 How long have you worked 4 locum tenens? 5 How long do you intend to work locum tenens? 30.8% 42% 15.8% 11.4% 14.9% 47.9% 21.7% 15.5% 27.4% 36.8% 20.5% 15.2% 16% 46.1% 23.8% 14% 30.8% 37.3% 15.8% 11.4% 14.3% 48.2% 22.9% 14.6% Less than one year 1-5 years 6-10 years 11 or more years Less than one year 1-5 years 6-10 years 11 or more years 6 At what stage of your career did you first work as a locum tenens? 7 About how many locum tenens assignments do you work during a year? 21% 54.7% 24.3% 12% 18% 70% 16% 50.3% 49.3% 14% 20% 66% 14.3% 33.6% 36.5% 10% 19% 71% Right after residency Mid-career After retiring from permanent practice % 22% 58% 18% 19% 63% or more Have you ever worked 8 in a permanent position? 9 If yes, how would you rate working as a locum tenens versus working in a permanent position? 92.5% 7.5% 17% 19% 64% 93.1% 6.9% 17% 23% 60% 92.3% 7.7% 13.6% 18.3% 68.1% % 6% % 19% 66% % 10% % 20% 61% Yes No Locum tenens is MORE satisfying Locum tenens is LESS satisfying Both types are EQUALLY satisfying Survey of Temporary Physician Staffing Trends

27 10 Are you currently in a permanent position? 11 Are you currently looking for a permanent position? 46.4% 53.6% 27.1% 72.9% 45.8% 54.2% 25.0% 75.0% 39.4% 60.6% 25.7% 74.3% Yes No Yes No 12 What are the benefits/drawbacks of working as a locum tenens? (check all that apply) BENEFITS DRAWBACKS % 83% 81% 83% 82% 66% 68% 65% 67% 68% Freedom/ flexibility Away from home 53% 44% 46% 36% 16% 60% 59% 60% 57% 59% Pay rate Uncertainty of Assignment 51% 50% 47% 50% 48% 55% 48% 56% 54% 48% No politics 48% 47% 46% 41% 44% Lack of benefits 49% 52% Travel 24% 23% 23% 22% 21% Credentialing 30% 31% 30% 24% 28% Professional development Quality of assignment 23% 20% 20% 17% 20% 26% 25% A way to find perm Learning new equipment 24% 31% 23% 0% 0% Pay rate With how many locum tenens 13 agencies do you work? 14 How do you select a firm? (check all that apply) None or more 13% 29% 46% 12% 14% 24% 47% 15% 11.4% 28.5% 47.5% 12.6% 3% 31% 47% 19% 11% 26% 49% 14% Location of opportunities Good service Pay rate Ability to maintain a relationship 68% 60% 52% 43% 67% 59% 49% 46% 65% 56% 45% 64% 61% 44% 63% 60% 46% Number of opportunities 40% 39% 44% 48% 48% Reputation 38% 36% 36% 41% 37% Malpractice insurance 35% 35% 36% 24% 28% 2015 Survey of Temporary Physician Staffing Trends 26

28 15 How do you select temporary opportunities? (check all that apply) When looking for a locums 16 opportunity, what sources do you use? (check all that apply) Location 88% 86% 86% 89% 88% Search online (Google, Yahoo, Bing) 29% 24% Pay rate 67% 64% 60% 61% 64% Facebook 0% 0% Length of assignment Available shifts Patient load Type/size of facility Quality of Equipment 62% 38% 35% 28% 10% 65% 34% 36% 33% 9% 64% 28% 34% 30% 10% 71% 33% 29% 25% 17% 69% 29% 32% 31% 13% Twitter LinkedIn Job boards Agency webpages Call around to agencies Call my recruiter 0% 4% 18% 17% 6% 26% 0% 1% 16% 14% 10% 34% 17 How did you come in contact with the current locum tenens agencies that you work with? 43% 46% 27% 21% 16% 16% 4% 5% 3% 2% 7% 10% Convention Web Page Social Media Call In Agency Found Me Referral 18 What value do you bring to a hiring facility? (check all that apply) 2011 Maintain patient care 89% 89% 86% 95% Generate revenue 68% 66% 56% 64% Provide support during high-volume periods 63% 61% 56% Prevent staff burn-out 51% 53% 48% 44% Maintain services during transition to physician employed model 37% 39% 40% Add a specific skill 36% 39% 36% 44% Reduce medical errors/readmissions 25% 27% 21% Assist with EMR transition 15% 15% 14% Survey of Temporary Physician Staffing Trends

29 How far are you willing to travel? What is your ideal assignment length? % 10.1% 10.4% 18.2% 15.3% 15.8% 28.5% 27.8% 26.6% 12.8% 10.1% 10.4% 11.2% 15.3% 15.8% 35.3% 27.8% 26.6% 41.0% 46.8% 47.2% 40.7% 46.8% 47.2% Nationwide Home region only Specific region only Home state only Less than one month 5 to 8 months 1 to 4 months 9-12 months 21 As a Locum Tenens Provider, how well are you accepted by each of these groups: COLLEAGUES 90% 9.1% ADMINISTRATION PATIENTS 84.2% 14.1% 96.2% 3.4% 0.9% 1.7% 0.4% COLLEAGUES ADMINISTRATION PATIENTS 87.7% 11.11% 81.7% 15.8% 96.4% 1.2% 2.5% 3.6% 0% COLLEAGUES ADMINISTRATION PATIENTS 90.2% 8.7% 85.9% 13.0% 96.0% 3.6% 1.1% 1.1% 0.3% 2011 COLLEAGUES ADMINISTRATION PATIENTS 78% 84% 22% 15% 97% 1% 0% 3% 0% 2010 COLLEAGUES ADMINISTRATION PATIENTS 71% 81% 27% 18% 95% 4% 1% 2% 1% Accepted Tolerated Not Accepted 22 Do you have a LinkedIn profile? 52.2% 47.8% 42.9% 57.1% Yes No 2015 Survey of Temporary Physician Staffing Trends 28

30 23 How do you use LinkedIn? (check all that apply) Network with colleagues 37.1% 46.1% Other 22.2% 36.5% Network with family/friends Stay in touch with news specific to my industry Look for jobs 10.0% 8.8% 8.2% 4.8% 13.5% 12.9% 24 Has working locum tenens affected you in any of the following ways (check all that apply)? Enhanced my understanding of different delivery systems 46.1% 37.1% Expanded my professional networking opportunities Created valuable new personal relationships Afforded positive travel experiences 22.2% 36.5% 13.5% 12.9% 10.0% 8.8% Enhanced my clinical skills 8.2% 4.8% Would you be willing to work locum tenens assignments through telemedicine? Would you be willing to work locum tenens assignments at federal government facilities such as the V.A.? 33.7% 18.9% 66.3% Yes 81.1% Yes No No Survey of Temporary Physician Staffing Trends

31 Trends and Observations OVERVIEW Part II of Staff Care s 2015 Survey of Temporary Physician Staffing Trends offers insights into the characteristics of locum tenens physicians -- the types of physicians who work locum tenens, what attracts them to locum tenens practice, their temporary assignment preferences, and how they are viewed by peers, administrators and patients. LOCUM TENENS IS ATTRACTING YOUNGER PHYSICIANS What types of physicians work as locum tenens? In the past, one short answer to this question would be older physicians. The survey indicates that this is no longer always the case. Fourteen percent of physicians surveyed in are 40 years old or younger, compared to only about 6% in and about 7% in. In addition, physicians with five or less years of medical practice experience comprised close to 11% of 2015 survey respondents, compared to about 5% in and about 6% in. While locum tenens still is primarily a practice option selected by more experienced physicians, Staff Care s survey suggests that younger physicians also are embracing locum tenens as a practice style. Twenty-one percent of locum tenens physicians surveyed in said they began working locum tenens right after completing their residency training, up from 16% in and 14.3% in. For a growing number of newly trained doctors, locum tenens presents a way to test drive different practice styles and geographic areas before settling on a permanent practice. By working locum tenens, newly trained physicians can evaluate the growing number of practice settings that employ physicians, including acute care hospitals, large integrated healthcare systems, Federally Qualified Health Centers (FQHCs), government facilities such as the VA, urgent care centers, retail clinics and others. They also can experience the unique challenges and rewards of traditional independent, physician-owned private practices. Locum tenens also offers newly trained physicians a flexible schedule, which can be particularly attractive to female physicians (who represent close to half of graduating medical residents) entering their child rearing years. MID-CAREER AND SEMI-RETIRED PHYSICIANS Physicians who are at the mid-point in their careers also are attracted to locum tenens. Over half of survey respondents (54.8%) indicated they first worked locum tenens at mid-career. Some of these midcareer physicians have decided to opt out of permanent practice settings due to various hassle factors, including rising levels of bureaucracy in medicine, declining reimbursement, loss of clinical autonomy, 2015 Survey of Temporary Physician Staffing Trends 30

32 malpractice costs, and related issues. By working locum tenens, they are able to preserve what most physicians enjoy about medicine (patient care) while avoiding many of the problematic aspects of today s medical practice environment. Other midcareer physicians maintain their permanent positions by moonlighting as locum tenens to supplement their incomes or to enjoy the benefits of travel and diverse practice settings. Just over 24% of physicians surveyed in indicated they began to work as locum tenens after retiring from permanent practice, down from 33.6% in and 36.5% in. Locum tenens offers highly experienced physicians the opportunity to continue seeing patients and using their considerable knowledge without the pressures, responsibilities and set schedules of private practice or of employment. By keeping retired doctors active, locum tenens helps extend the physician workforce at a time when doctor shortages are prevalent. NOT JUST PRIMARY CARE The shortage of primary care physicians nationwide has been the subject of considerable media attention and it is almost universally conceded by healthcare policy analysts that there are too few doctors in the three key areas of primary care: family medicine, general internal medicine and pediatrics. In many cases, hospitals, medical groups and other healthcare facilities are using locum tenens physicians to fill in gaps in their primary care staffs (see Part III of this survey). However, it is not just primary care physicians who are working as locum tenens. Over 70% of locum tenens physicians responding to the survey indicated they are in a nonprimary care specialty (this does not include NPs or PAs who responded to the survey, most of whom are in primary care). This split between primary care and specialist locum tenens physicians is mirrored in the overall physician workforce (see below) Primary Care and Specialist Physicians/U.S. 32.6% Primary Care 67.4% Specialists Source: AMA Master File Locum tenens physicians fill temporary assignments in anesthesiology, emergency medicine, sub-specialties of internal medicine and surgery, behavioral health, urgent care and virtually every other specialty for which there is a permanent counterpart, underlining the fact that physician shortages are not limited to primary care. It can be generally stated that whatever physicians in permanent positions do, locum tenens physicians do also. A LAST BASTION OF AUTONOMY As referenced above, medical practice styles are changing with traditional solo and independent private practice models giving way to the Survey of Temporary Physician Staffing Trends

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