Read time: 2.5 minutes
If you are struggling with overwork and underpay in the practice of clinical medicine, then I may have a solution for you.
Unfortunately, misconceptions abound with independent contracting, aka locum tenens work, because the people who most need to break free of the overwork/underpay bonds are the least likely to know anyone outside of the usual big hospital/practice work environments.
Pay is one of these misconceptions.
But can I make money with locum tenens work?
I thought that this would have been an obvious question seeing as how most physicians and nurses I know are inundated with unsolicited offers showing very attractive pay rates.
But I don’t think that many clinicians actually tally how much an hourly rate compares to their current compensation.
Furthermore, I doubt many of them think there is money to be made because they refuse to believe in basic labor economic principals.
Supply, Demand, and Price
Let’s summarize labor economics in 30 seconds:
The market price in an unregulated economy is set by the supply of workers and the demand for them, all else equal.
If there are many, many workers for a role – it will demand less pay, ie, that job will pay less.
Locum rates for anesthesiologists are averaging $275-350 /hr in the Northeast at the time of writing this.
Gross compensation estimates that include all benefits, insurance, wages, etc. at comparable hospital jobs come out to somewhere around $180-250 /hr.
The less regulated and more freely moving marketplace is for the locum contract jobs at the higher rates. Which means it will more quickly reflect a balance between supply and demand.
We know at least 1 of the following points is true: there aren’t enough anesthesiologists (or they aren’t in the locations that need them most) or there are too many procedures requiring their services.
The jobs will pay more by definition. Otherwise, they wouldn’t need locum coverage – ie, they wouldn’t be willing to go outside of the normal hiring process to get skilled labor.
In our example: imagine making 30% more – gross – for doing the same thing and having more control over your schedule!
What is my hourly rate at a full-time, salary job?
The White Coat Investor just published an article discussing how to compare w2 employment to 1099 contract employment.
The bottom line is you have to include everything in order to have an apples-to-apples comparison.
Your w2 breakdown should be:
- gross pay
- the employer half of payroll taxes that you will have to pay as an independent contractor (see WCI article)
- health insurance subsidization
- HSA employer contribution (if applicable)
- 403b/401k employer contribution
For many people that might be everything to include.
Now divide by your total hours worked in a year.
Now add in how there are many days where you have no idea when you will leave or if you will make the dinner plans after work.
What’s that stress worth to you?
Summary
After 5 years, I left full-time work because I wanted to work less.
I felt I worked too much without any incentive for covering increasing ICU beds, locations, and surgeries during the same 12 hr shift or 24 hr call.
In my first newsletter, I detailed how I asked to work less (25% less) in exchange for a decrease in pay and benefits (25% less).
(I was denied and the rest is history.)
But the improved compensation of anesthesiology positions allows me to work 50% of the hours each week while making 85% of the gross income!
I never would have known this was actually possible, if it weren’t for hearing of it first hand from 3 other physicians who went before me.
Let this serve as my testimony for you.
Whenever you’re ready, here are 2 ways I can help:
1) Let’s talk through what choosing your own path through medicine looks like. Over the phone, confidential, free: https://calendly.com/tonyvullo/20min
2) Free Articles and Resources to Help You Reclaim Your Time and Autonomy: www.tonyvullo.com
Help Patients. Work Less.
Do More of Everything Else.
