Happy belated National Doctors’ Day!
We get one day a year but I do think it’s important to acknowledge what physicians do. Our job has been burdened down more than ever with administrative tasks and high burnout rates while having less ownership of our autonomy. But through that you all are able to keep what matters front and center: patient care.
Thanks for all you all do and I hope you all find some level of autonomy this year.
In today’s newsletter:
Most docs are using AI at work
Should you go through locum tenens agencies or direct?
Hold your CV tight
Keep your documents organized
What I’m Reading
81% of physicians are now using AI at work. In 2023, about 38% of physicians were using AI in some form, now it’s over 80%.
Biggest uses are documentation, summarizing research, and admin work.
Three out of four doctors who adopted AI said it reduced their admin burden and increased their job satisfaction.
This is moving fast. If you’re not at least experimenting with using AI, you’re falling behind.
CMS is finally phasing out the fax machine.
Ease of sending documents is expected to expedite health care claims.
Reportedly, this will save around $781 million in administrative costs.
Agency vs. Direct: The Honest Breakdown
Last issue I covered how to negotiate better locums pay. But negotiation only goes so far when there's a middleman taking 30-50% of what the hospital pays before you see any of it.
That's the agency model. And for a lot of physicians it makes sense. Especially early on.
What agencies do for their cut:
They handle credentialing paperwork
They negotiate the contract with the hospital
They arrange malpractice coverage (usually claims-made through their own policy)
They coordinate travel and housing
They help facilities find physicians for their coverage
They help you find jobs
That's real value. I used agencies for years. If you're starting out and don't have relationships or a business entity set up, agencies are the fastest way to get your first assignment.
A math example:
Say a hospital pays an agency $280/hr for a hospitalist. The agency might pay you $170/hr and keeps the rest. On a 7-on block of 12-hour shifts (84 hours), the hospital spends $23,520. You take home $14,280. The agency keeps $9,240. For one week.
Now say you contract directly with that same hospital at $210/hr. You cover your own travel, housing, rental car, and malpractice. The hospital saves over $5,000 per week compared to the agency. You make $17,640 before expenses. Even after maybe $1,500 in travel costs, you're netting more than you were through the agency.
And your travel, housing, and malpractice are all deductible through your PLLC.
What you take on when you go direct:
Going direct isn't just calling the hospital and asking for more money. You need infrastructure:
An LLC or similar entity
Your own malpractice insurance (occurrence-based is better than claims unless you have tail on top of claims)
The ability to credential yourself or at least manage the paperwork
A contract you've actually read, ideally reviewed by a contract attorney
The discipline to chase your own invoices and manage your own schedule
Able to reach out directly to hospitals you have not worked at yet
When you go direct, you can negotiate from a position where you understand every clause. Additionally, a hospital is more likely to hire you back since they don’t have to pay that higher rate to the locum tenens agency.
The hybrid play
You don't have to go all or nothing. Use agencies to get your foot in the door at a new hospital. Do great work and build the relationship. When the contract ends, reach out to the hospital directly (careful with that non-compete clause though).
Most hospitals would rather work with a physician they already know than roll the dice on a new agency placement. You've already been vetted, know their EMR, workflows, etc.
The Bottom Line
Agencies aren't the enemy. They're a tool. You should know what it costs you and whether you still need it.
The locums staffing market is approaching $10 billion. A lot of that is the spread between what hospitals pay and what physicians get. Once you see that math, you can't unsee it.
The Practical Win: Know What You Want
🚀 Before your next recruiter call:
Hospitals will ask for the same stuff that agencies do (CME logs, diplomas, NPDB, state licenses, etc.). Keep these in one place and keep it updated.
Keep a Notion page or Excel sheet with a list of your licenses with expiration dates. That way you never have to guess when you need to renew something.
The Locums Corner
Most agency contracts have a non-compete clause that is typically two years. It means you cannot work at that particular facility (or affiliates, depending on contract language) without going through that locums agency. And it can start the moment they present you to a facility, not when you start working there.
That means if an agency sends your CV to a hospital without your permission, you could be locked out of contracting with that hospital directly for two years. Even if you never worked a single shift there.
Don't hand your CV to an agency unless you're serious about working with them. And if you do, tell them explicitly: do not present me to any facility without my consent first. Get it in writing if you can.
What’s coming in the next few issues:
Real estate investing - is this really passive?
Building a personal brand as a physician
More detail into specific side hustles
Is an S corp right for your 1099 work?
Scripts for locum tenens recruiter calls
What would you like covered in future issues? Reply to this email and let me know!