It is essential to be cost-effective in all aspects of facility management in today's rapidly shifting healthcare landscape. However, organizations sometimes do not realize that if they do not fill open staff positions, they could be losing money. Hiring locum tenens providers via medical staffing solutions can be an effective strategy for maintaining revenue. Let's examine why in detail:
When you have an open position on your medical staff, you pay for it. For a variety of reasons, having insufficient essential providers on staff can result in higher costs than hiring locum tenens providers to fill in. Patients must seek specialized care elsewhere if the opening is for a specialist position and you do not have another provider who can perform those responsibilities. This indicates that you are not billing for those services, resulting in a loss of significant funds that are likely going to a rival.
Due to the nationwide staffing shortage, filling certain positions can take a long time given the current state of the healthcare industry. Because the cost of a locum provider is less than losing that business entirely, hiring a locum tenens provider to fill in while you continue your search can be a cost-effective method of maintaining that income flow.
If you have open positions on your medical team, other staff members are likely to step in to fill them. After attempting to keep up with demand for an extended period, it can quickly result in your permanent staff members experiencing burnout and workload. For your full-time employees, using locum tenens providers to fill in the gaps and shoulder some of the workloads can make a big difference.
Your permanent staff's morale and retention can be greatly enhanced by reducing workload and allowing them to recharge. Take care of your current staff and avoid losing anyone else if you are already experiencing staffing shortages. Staff who work as locum tenens can help you avoid that position.
When you are short-staffed, you may not only be unable to bill for services, but you may also suffer from decreased patient satisfaction and outcomes. Patients will be dissatisfied with their experience at your facility if they are unable to schedule appointments, have to wait a long time to get an appointment on the calendar or both.
If the situation is time-sensitive, prolonged wait times can also result in worse outcomes, and patients may be less likely to return for additional care after a bad experience. Patients are aware when they are dealing with exhausted and dissatisfied staff members during their visits, which adds stress to the situation. In order to fill in these care gaps, locum tenens coverage can reduce patient wait times and ensure that patients receive the care they need on time, leading to higher levels of patient satisfaction.
Occasionally, it can be extremely challenging to find a permanent staff member for certain positions. This could be because the position is so demanding or because the facility is located in a more remote area. Locum tenens advanced practice providers may be able to ease the burden if your facility is going through a prolonged search for a new physician.
Depending on your facility's requirements, these medical professionals may be a cost-effective means of obtaining coverage for specific roles. Physicians and physician assistants can assist with a wide range of patient care requirements, assisting in the reduction of operational costs, the preservation of volume, and, most importantly, the preservation of high-quality patient care. Again, providing locum coverage with NPs and PAs by connecting with medical staffing solutions can help alleviate pressure on your permanent staff.
If your facility is experiencing a staffing shortage, it is essential to implement measures to safeguard revenue streams, prevent burnout among your other employees, maintain patient satisfaction, and continue providing high-quality care. An excellent and cost-effective solution to these issues may be provided by locum tenens providers. When it comes to getting the coverage you want, working with a reputable medical staffing solution can be crucial. ProLocums is here to assist you. So, contact us right away for more details!
At ProLocums, we believe there is no one-size-fits-all way to organize partnerships with hospitals, and the same applies to our relationship with the physicians we hire to care for patients.
Whether you are employed and receiving a W-2 or are an independent contractor physician receiving a 1099 depends on various factors including specialty and role. Most physicians have been W-2 employees at some point, so they inherently understand this model. The independent contractor (IC) model is a little more foreign to many, so it is important to understand the pros and cons of this tax status.
Transitioning from an employed model to being an independent contractor physician (ICP), or starting your career as an independent contractor, presents a variety of often bewildering questions. One of the first is likely about the difference between forming an LLC and an S Corp.
Choosing the right business structure is a complicated question that depends on your state, personal financial goals, and family needs. To help physicians navigate these choices, we've teamed up with DocWealth.io, which specializes in providing CPA services for 1099 physicians to maximize their earnings. Consulting with a professional like DocWealth.io can help you come up with a plan that fits your particular situation and needs.
In this article, we will discuss why being a 1099 physician is the best option and explore whether you should form an S Corp or an LLC to maximize your financial benefits.
When deciding between forming an LLC or an S Corp as a 1099 physician, it's crucial to understand the distinctions and benefits of each structure.
S Corporation (S Corp): An S Corp, or S corporation, is a type of business entity that offers the advantage of pass-through taxation. This means that the company's profits and losses are passed directly to the individual owners, who report them on their personal income tax returns. This structure helps avoid the double taxation commonly associated with traditional C corporations. Owners of an S Corp can also save on self-employment taxes, as they can take a reasonable salary and distribute remaining profits as dividends, which are typically taxed at a lower rate. [not subject to additional self employment taxes.]
Limited Liability Company (LLC): An LLC, or limited liability company, blends the benefits of a corporation with the flexibility of a partnership or sole proprietorship. LLCs are relatively easy to establish and operate, offering significant flexibility in how they are taxed and how profits and losses are allocated among the owners. The members of an LLC are not personally liable for the company's debts and obligations, providing a layer of personal asset protection. Profits can be distributed among one or more members, making it a versatile choice for many business owners.
Contrary to popular belief, the primary purpose of forming an LLC for physicians is not necessarily to shield from liability, but to create an opportunity to save money through electing S Corp taxation.
How Does an LLC Help Lower Your Tax Bill? An LLC can choose to be taxed as an S Corp, allowing the business owner to take advantage of pass-through taxation while also potentially reducing self-employment taxes. By electing S Corp status, the physician can receive a portion of their income as a salary (subject to payroll taxes) and the remaining as a distribution (not subject to self-employment tax), leading to overall tax savings.
Many independent contractor physicians opt to form an LLC for its ease of setup and then elect S Corp taxation for federal tax benefits. This setup allows physicians to benefit from the simplicity of an LLC while enjoying the tax advantages of an S Corp.
Here’s how it works:
1. Formation and Election:
2. Revenue Flow:
3. Salary and Distributions:
As both the employer and employee, the independent contractor physician can significantly reduce self-employment taxes. For 2024, the self-employment tax rate is 15.3% on earnings up to $160,200, with an additional 2.9% on income above this threshold. By balancing W-2 wages and distributions, physicians can save thousands of dollars annually, primarily on payroll taxes, while still meeting their income tax obligations. This strategy offers substantial savings for independent contractor physicians.
Dr. Smith owns Smith Medical, LLC. ProLocums pays Smith Medical, LLC $325k through 1099 payments. Smith Medical, LLC then pays Dr. Smith a $125k salary via W-2. As a result, Dr. Smith’s payroll tax is calculated only on the $125k salary instead of the entire $325k.
Payroll Tax Implications Without an LLC:
Payroll Tax Implications With an LLC:
By structuring his income this way, Dr. Smith saves over $10,000 in payroll taxes.
The next common question is, “What about the $200k that I’m not taking as wages?” That $200k remains your money and can be accessed through owner distributions or dividends. You can transfer these funds from your business bank account to your personal account with ease. The advantage here is that this $200k is not subject to payroll tax, though it is still subject to income tax.
Forming an LLC and electing S Corp taxation has numerous benefits, but there are also potential downsides. These include compliance with additional tax rules and regulations specific to S Corps. Physicians considering this option should weigh the benefits and drawbacks and consult a tax professional before making a decision. For more information, visit DocWealth.io.
In recent years, the tax landscape for independent contractors has become increasingly complex, making much of the existing online information outdated. Consulting with a tax professional is crucial for understanding your specific situation.
Qualified Business Income (QBI), outlined in Section 199A of the tax code, refers to net income from a qualified trade or business eligible for deductions under the Tax Cuts and Jobs Act of 2017. For independent contractor physicians, this income is eligible, but only if it falls under certain thresholds:
QBI Example:
Understanding QBI and its implications can significantly impact tax planning and savings for independent contractor physicians. For more detailed advice tailored to your circumstances, visit DocWealth.io.
The 2017 tax law that introduced QBI also capped state and local tax (SALT) deductions at $10,000, targeting high-income earners like physicians. To counteract this, many states have introduced or proposed a Pass-Through Entity (PTE) Level Tax. If your state offers PTE, you can pay a portion of your state income tax through your LLC and receive a federal deduction.
For Example:
This strategy allows high earners to navigate the SALT deduction cap effectively.
Organizing an LLC and paying yourself as an employee adds complexity but can lead to substantial savings. In the examples above, Dr. Smith could save:
These figures don’t include potential savings from retirement contributions or business deductions. While these examples are simplified and may not apply to your specific situation, the potential benefits are significant.
For personalized advice, consult your CPA or schedule a free 30-minute session with DocWealth.io.
07/15/2024
Physician income has been on a steady rise, with the average compensation for U.S. physicians escalating from $352,000 in 2022 to $363,000 in 2023 according to the Medscape report. However, these figures vary significantly across specialties and demographics, particularly gender. In 2023, male physicians earned an average of $91,000 more than female physicians, a stark 29% difference.
The disparity is even more pronounced among specialists. Male specialists earned an average of $435,000 in 2023, compared to $333,000 for their female counterparts, resulting in a 31% difference. Encouragingly, the gender pay gap is much narrower in locum positions, averaging about 15%. In some specialties, there is no gap, and in others, women earn more than men.
Here is a detailed analysis of the average compensation across six specialties and how it varies by gender as per the Medscape report.
Anesthesiology is among the highest-paying specialties and continues to grow. Average compensation for anesthesiologists increased by 10% in 2022 and an additional 5% in 2023. In 2022, male anesthesiologists earned an average of $459,000, while female anesthesiologists earned $419,000. Although a pay gap exists, it is smaller compared to other specialties and is shrinking; the gap decreased from 17% in 2021 to 10% in 2022.
For locum anesthesiologists, the pay gap is minimal. Women earned an average of $298 an hour, while men earned $310 an hour, a difference of just under 4%.
Cardiology is the third-highest-paid specialty, with an average income of $525,000 in 2023. Although specific gender pay gap data for cardiologists is not available, the overall average gender pay difference for specialists is 31%, translating to more than a $100,000 difference.
Locum compensation for cardiologists is more equitable. Women earned an average of $246 an hour, compared to $247 for men.
In family medicine, male physicians earned an average of $282,000 in 2022, while female physicians earned $230,000, a 23% difference. This gap, however, is narrowing; it was 26% the previous year. Locum compensation for family medicine doctors shows no disparity, with both men and women earning an average of $117 an hour.
General surgeons earned an average of $423,000 in 2023, though gender-specific data was not provided. Interestingly, in locum positions, female general surgeons earned 11% more than their male counterparts. Women earned an average of $179 an hour, while men earned $159 an hour.
While Medscape did not report on the gender pay gap for neurologists, the average compensation rose from $313,000 in 2022 to $343,000 in 2023, a nearly 10% increase. In locum roles, male neurologists made about 5% more than female neurologists, with average hourly rates of $255 and $242, respectively.
The field of obstetrics and gynecology has one of the smallest pay gaps in medicine. In 2022, male OB/GYNs earned an average of $349,000, while female OB/GYNs earned $329,000, a 6% difference. By opting for the latest locum jobs, women earned slightly more than men, with hourly rates of $164 for women and $161 for men.
These figures are averages, and individual compensation can vary widely within each specialty. Nonetheless, there are ways for physicians, regardless of gender, to increase their earnings:
By leveraging locum opportunities, understanding their worth, and negotiating effectively, physicians can work towards closing the gender pay gap and ensuring fair compensation for their expertise and hard work. Visit the ProLocums website to find more locum opportunities.
07/12/2024
Physicians venturing into locum work, or considering it, often have numerous questions regarding the process, benefits, and what to expect while on assignment. To address these queries, ProLocums has created a comprehensive series of FAQs. Keep reading to learn more.
Working with a locum staffing agency offers several advantages. Agencies provide access to multiple opportunities, both regionally and nationally. For instance, a physician might work at a large metropolitan teaching hospital one month and a remote Indian Health Service clinic the next. If a physician prefers a particular practice style, such as rural medicine, agencies can often provide consistent work that aligns with these preferences. Additionally, agencies like ProLocums propose varied support services that save doctors energy and time significantly. Furthermore, working through an agency also helps doctors stay busy, minimizing downtime between assignments.
While some providers prefer negotiating their own locum jobs to secure higher pay rates, using an agency simplifies the process. ProLocums can help locate the ideal assignment, whenever and wherever you expect. With agency assistance, physicians are well-prepared for their next exciting opportunity. Although online job boards exist, many healthcare organizations prefer working with locum staffing agencies to fill positions quickly. Agencies not only provide physician staffing services but also manage contracts, paperwork, state licensing, and the credentialing or privileging processes required for each position, enabling physicians to start work as soon as possible.
A reputable, full-service locum staffing agency typically offers the following:
To maximize locum work opportunities, maintain regular contact with your recruiter and foster a good relationship. Being proactive in communication will secure more jobs than waiting for the agency to contact you. Be specific about your preferences and keep your CV updated with your latest experience and goals.
Yes. As an independent contractor, you have the freedom to choose where and when you practice. You can select from the opportunities presented by the agency and decide which assignments to take. Agencies should not dictate your work schedule or location.
Your first contact with a locum staffing agency is usually through a recruiter who will gauge your interest in locum practice. The recruiter will gather information about your medical training, licensure, and personal and professional interests. They may also contact you about specific opportunities and coordinate logistics like licensure, credentialing, travel, and accommodation.
Some agencies, like ProLocums, allocate a staffing consultant to each doctor and client. This consultant ensures coordination of all assignments and works with both the Licensing and Credentialing Departments to ensure that physicians have all necessary documents for each assignment.
Finding the best locum agency requires some research to ensure they meet your needs in terms of:
No, locum agencies do not deduct any amount from your salary. Instead, they charge the hospital a fee for finding you, ensuring compliance, and managing the booking process.
Ideally, begin the registration process 45 to 60 days before you want to start work. This timeframe allows enough time to complete registration and handle any issues or delays. It also provides the opportunity to book popular shifts in advance, which can fill up quickly as the start date approaches.
For more information about working on a ProLocums assignment, please contact us today or visit our Job Search page.
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