- OnCall Solutions Editorial Team
- Published:
- Updated: July 2026
Every vacant hospital shift represents thousands of dollars in lost billing potential, rising overtime costs for existing staff, and, in some cases, diverted patients who may never return.
Empty schedules place enormous pressure on physicians and nurses already working long hours, creating a ripple effect that affects patient satisfaction scores and community trust.
For hospital budget owners, locum tenens coverage is easy to underestimate. The hourly rate is only one line in a larger equation that includes agency markups, travel, credentialing, and the revenue you protect by not leaving a role open. This guide breaks down what locum coverage actually costs by specialty, how it compares to a permanent hire once benefits and overhead are factored in, and how to model it against the cost of an unfilled shift.
The short answer: Locum tenens coverage typically costs a quoted hourly or daily rate plus an agency markup of roughly 15% to 60%, which absorbs credentialing, malpractice, and travel. Hourly rates range from about $120 for family medicine to $300 or more for anesthesiology. Once you factor in the benefits and overhead of a permanent hire, effective daily costs often land in a similar range.
Understanding the Real Cost of Locum Physicians
To understand the full budget picture, it helps to break costs into key components:
- Hourly or daily rates: These vary widely by specialty, shift type, and geographic region. Rates may increase for overnight or holiday coverage, or in states with higher malpractice premiums.
- Agency markups: Typically ranging from 15% to 60%, these markups cover recruiting operations, credentialing support, malpractice insurance, and financial risk. While markups can seem high, they also absorb most of the administrative burdens that would otherwise fall on your HR and medical staff.
- Travel and housing: Agencies usually arrange and cover lodging, flights, or mileage, ensuring physicians can arrive ready to work without burdening internal staff.
- Credentialing and onboarding: Included in most agency partnerships, these steps save valuable time and prevent delays that can extend staffing shortages.
These costs add up, which is why it helps to remember just how common locum staffing has become. An estimated 56,000-plus US physicians work locum tenens, more than double the estimated number in 2002, according to the American College of Rheumatology’s official publication. The AMA reported in January 2026 that organizations used locum tenens in 16.4% of physician searches in 2024, up from 9.2% in 2023.
Far from a niche solution, locum tenens physicians are now a mainstream part of hospital workforce planning. With that in mind, it is helpful to examine compensation patterns across specialties more closely to see how rates compare in practice.
Locum Compensation Trends by Specialty
Compensation varies not only by specialty but also by geography and urgency of need. Here is how average rates compare across key specialties, giving you a clearer sense of what to expect when planning coverage:
- Anesthesiology: $300 to $425 per hour
- Emergency medicine: $250 to $300 per hour
- Family medicine: $120 to $140 per hour
- General surgery: $1,400 to $1,800 per day
- Hospitalists: $140 to $180 per hour
- Radiologists: $245 to $290 per hour
In highly competitive regions, rural areas, or high-acuity settings, these ranges climb further. Some rural emergency departments, for example, pay well above standard rates to secure coverage when demand exceeds supply. For internal medicine specifically, locum physicians can earn around $173 per hour, often higher than the hourly equivalent of permanent positions.
Locum vs. Permanent: A Cost Comparison Framework
It can be tempting to compare a physician’s salary to a locum’s hourly rate and stop there. The reality is more complex. Permanent employment brings a host of additional expenses:
- Health insurance
- Retirement contributions
- Malpractice coverage
- Continuing medical education allowances
- Payroll taxes
- Signing bonuses
- And sometimes relocation assistance
According to the Bureau of Labor Statistics, benefits and related costs add roughly 30% on top of base wages for private-industry workers. Other workforce studies estimate that the true cost of an employee often ranges from 1.25 to 1.4 times their salary once all overhead is considered.
Consider the example of a family medicine physician earning $180,000 per year. At first glance, the salary translates to about $720 per day. When you factor in benefits and overhead, however, the effective daily cost rises to around $900 to $1,000.
When compared with typical locum daily rates, the gap narrows considerably. Add in the fact that permanent recruitment can stretch for six months or more, while locum coverage can be arranged in a matter of weeks, and the financial equation looks different.
Locums not only provide stopgap coverage but can also prevent the far higher losses associated with extended vacancies.
Employment Type | Base Pay (per day) | Added Benefits & Overhead | Effective Daily Cost |
Permanent Physician | $720 | +$180 to $280 (25 to 40%) | $900 to $1,000 |
Locum Tenens Physician | Quoted daily rate | Minimal additional costs | $900 to $1,200 (varies by specialty) |
Time to coverage | 118+ days median | Recruitment overhead | Weeks with locum coverage |
Maximizing ROI: The Value of Locum Staffing
For hospital practice partners, vacancies are costly in more ways than one. The most expensive factor is often time. Every day without coverage puts pressure on your teams and delays care. The Association for Advancing Physician and Provider Recruitment (AAPPR) reports a median of 118 days to fill physician roles, with surgical subspecialties far longer, such as oncology, at a median of 332 days.
While exact revenue loss varies by service line, there are reliable proxies for the financial risk of unstaffed coverage:
- Operating rooms are among the most expensive hospital resources. A 2022 review across multiple studies estimated the mean cost of OR time at roughly $46 per minute, while a widely cited JAMA Surgery analysis of California hospital data put it more conservatively at $36 to $37 per minute. Either way, idle blocks or cancellations carry real dollars attached to time unused.
- Emergency departments that divert or slow intake lose billable encounters. AHRQ’s HCUP analysis estimates the average cost per treat-and-release ED visit at about $750, illustrating the order of magnitude at stake when capacity is constrained.
Locum coverage reduces these exposure windows by providing near-term capacity while permanent recruiting continues. Faster coverage helps preserve scheduled procedures, prevents ED diversion, and protects downstream hospital revenue.
Hidden or Downstream Costs and Benefits
Budgeting should consider indirect effects that are harder to quantify but well documented in operations research:
- Staffing stability supports quality metrics tied to reimbursement and hospital reputation.
- Consistent coverage reduces the overtime burden on employed clinicians, which in turn helps with retention and morale.
- Coverage in shortage areas sustains access. HRSA identifies more than 92 million people living in primary care Health Professional Shortage Areas, underscoring the community stakes when positions remain open.
Practical Budgeting Steps for Administrators
To make these numbers more tangible, here is a sample cost model that shows how a locum assignment might look when broken into individual components. These figures are illustrative, not contractual, but they demonstrate the types of line items you should expect to track:
Cost Component | Sample Figure | Notes |
Base daily rate | $1,200 | Hospitalist coverage, 10-day block |
Assignment duration | 10 days | Total base = $12,000 |
Agency markup or fees | $2,000 | Flat arrangement fee |
Malpractice coverage | Included | Standard occurrence policy |
Travel & lodging | $2,500 | Round-trip airfare + hotel + meals |
Credentialing & onboarding | $1,000 | Staff time, EHR setup |
Indirect costs and downstream benefits | Variable | Preserved admissions, reduced overtime, retention value |
Total sample cost: $17,500 for 10 days of coverage. For comparison, an unfilled hospitalist vacancy averaging $750 per day in lost admissions could exceed $22,000 over the same period. This exercise shows why breaking the budget into categories helps clarify the true value of locum coverage.
A clear framework helps financial leaders plan. Start with this checklist:
- Base hourly or daily rate
- Assignment duration
- Agency markup or fees
- Malpractice coverage
- Travel and lodging
- Credentialing and onboarding
- Indirect costs and downstream benefits
Model costs by multiplying expected hours by the quoted rate, then add the overhead you will incur on-site, such as onboarding time or EHR training. For a conservative plan, run scenarios that assume longer time-to-fill pulled from current AAPPR medians for your specialty and market.
Key Questions to Ask Locum Tenens Agencies
Before finalizing contracts with a locum tenens staffing firm, clarify:
- Which expenses are included, such as credentialing, malpractice, travel, and housing
- Markup or fee structure and any volume or duration discounts
- Realistic credentialing timelines and help with payer enrollment if needed
- Options for locum-to-perm conversion if the fit is right
These clarifications establish expectations and safeguard your budget from unexpected expenses. They also create a natural bridge to the broader conversation: how locum staffing is no longer a temporary fix but a growing part of long-term workforce planning. For more on vetting partners, see our guide on how to choose the best locum tenens agency.
The Growing Role of Locum Tenens
Locum staffing has become a durable part of workforce strategy. Independent market researchers project steady growth: the global locum tenens market was valued at around $9.5 billion in 2024 and is projected to approach $19.7 billion by 2034, with alternative estimates placing it near $14.6 billion by 2030.
This trajectory, combined with documented recruiting timelines, makes a proactive locum budgeting plan a practical hedge against service disruption.
Bottom Line
Locum physicians can be a smart financial tool when you account for the full employment cost of permanent hires, the measurable expense of idle clinical time, and the real timelines required to recruit. Rather than viewing coverage as an expense, treat it as a strategy to preserve revenue and protect patient access.
OnCall Solutions is your national medical staffing and hospital practice partner, helping you plan strategically and align budgets with patient care needs.
Connect with us to optimize your locum tenens strategy today.
Frequently Asked Questions
How much does a locum tenens physician cost per hour?
Rates run roughly $120 to $140 for family medicine up to $300 to $425 for anesthesiology, plus an agency markup that typically falls between 15% and 60%.
What is a typical locum agency markup?
Commonly cited at 15% to 60% of the bill rate, the markup covers credentialing, malpractice, travel, and the agency’s financial risk.
Is a locum more expensive than a permanent physician?
Not always. Once benefits and overhead of about 25% to 40% over base wages are added, the effective daily costs of a permanent hire and a locum often converge.
How long does it take to fill a physician vacancy?
A median of 118 days, and far longer for subspecialties like oncology, which runs a median of 332 days, according to AAPPR.