Current State

Locum tenens physicians—temporary specialists who fill gaps that full-time hires are either unavailable or unnecessary to maintain long term —are no longer a "stop-gap" measure. Persistent clinical labor shortages, rural access hurdles, specialty gaps, and seasonal and acuity volatility have transformed locums into a critical and permanent fixture of the American health system. Derived from the Latin phrase "holding the place," these providers do exactly that; however, the very traits that make them valuable (speed and flexibility) also create systemic vulnerability.

The ease of bypassing lengthy hiring processes is precisely what makes unmanaged locum usage problematic. For many healthcare organizations, locum tenens has never really been managed in a structured sense. This lack of workforce governance and centralized oversight can create significant financial, operational, and compliance risks. Health systems that want to remain resilient must adapt from their current fragmented, reactive model to one of strategic, structured control.

The Challenge: Locum Tenens Without Governance

This fragmentation and lack of governance create immediate financial risk and operational volatility through uncoordinated, decentralized spending and limited workforce visibility. Without centralized oversight of rates, stipends, supplier negotiations, and active assignments, individual departments often manage locum physician engagements independently, with little visibility into total clinical labor costs or a clear understanding of how many locum physicians are active across the system, where they are deployed, or which specialties they support.

The result is significant variation in what facilities pay for the same specialty, while travel and housing stipends (often negotiated on an ad hoc basis) can escalate quickly without standardized controls or market benchmarking. These obstacles become even more pronounced during periods of high demand, when urgent coverage needs make spending, workforce planning, and resource allocation particularly difficult to track, manage, and optimize.

The top challenges are:

• credentialing complexity,
• supplier fragmentation,
• and cultural resistance.

Credentialing Complexity

Credentialing a locum physician means more than verifying a license. It involves hospital-specific privileging and approvals that vary by facility. When managed inconsistently across departments, this results in compliance gaps that carry real regulatory and reputational risks, and in the worst cases, patient safety risks.

Beyond regulatory risk, credentialing delays are also a major source of frustration for healthcare leaders. Without a structured, well-governed process for collecting and verifying required documentation, organizations can face lengthy back-and-forth communication, slowing the completion of credentialing packets and potentially causing providers to miss committee review windows. The result is delayed deployment and prolonged coverage gaps when talent is needed most.

Supplier Fragmentation

Most health systems rely on multiple staffing vendors for locum coverage, each operating with its own invoicing stream, screening standards, and contract terms. The administrative burden on internal teams is disproportionate, accountability is spread thin, and enforcing any kind of standard across suppliers becomes nearly impossible.

The Human Element: Cultural Resistance

Bringing structure to locum programs means navigating a human challenge as much as a process one. Locum physicians, who are often high-caliber specialists with careers built on independence, can be resistant to additional oversight or paperwork, worrying about disruption to clinical flow. Medical teams with long-standing agency relationships may see centralization as an inconvenience rather than an improvement. Any effective solution has to account for this.

Importantly, a temporary reduction in locum usage wouldn’t solve any of this. Without governance in place, organizations continue to face:

• Spend visibility gaps
• Rate inconsistencies across vendors and engagements
• Compliance and credentialing risks

These underlying challenges remain exactly where they are, regardless of fluctuations in locum usage.

The Solution: A Shift to Strategic, Vendor-Neutral Governance

The answer to fragmentation is careful structure through a strategic transfer of spend. A vendor-neutral Managed Service Provider (MSP) model creates a centralized governance layer that manages all suppliers, all compliance, and the total clinical spend, without being financially tied to any single staffing agency. That independence matters: an MSP that also owns a staffing agency has an inherent conflict of interest. A vendor-neutral MSP selects the best supplier for each role from across a managed network based on clinical fit, not internal revenue.

Learn more about the benefits of vendor neutrality.  

Consolidating and transferring all locum activity into a single managed program provides an immediate operational upgrade, including:

• A single point of contact for invoicing and reporting
• Standardized stipend caps
• Structured financial and operational controls
• Market-rate intelligence across specialties and geographies

 In addition, duplicate payments are eliminated, and cancellation terms are enforced consistently.

Under a structured MSP, credentialing becomes a coordinated, auditable process rather than a departmental burden. Screening is standardized across all suppliers, compliance is tracked consistently, and risks are mitigated across facilities. Organizations that move to this model often discover that their previous compliance structure was less comprehensive and robust than they assumed, exposing them to hidden risk.

Holistic View and Analytics

When all locum spend and activity are transferred into a single program, it integrates seamlessly into the broader MSP framework. This allows healthcare leaders to view locum tenens holistically alongside nursing, allied health, and other contingent labor categories.

Through a centralized analytics dashboard, leadership gains real-time insight into physician deployment across:

• facilities,
• locations,
• specialties,
• and assignment durations.

This consolidated data platform replaces fragmented spreadsheets with actionable market intelligence. The conversation instantly shifts from "we need to fill this gap now" to "here is our holistic workforce picture." That is the fundamental difference between reacting and strategizing.

For internal teams, the operational relief is immediate. Vendor management is consolidated into a single relationship, and workflows are standardized across all facilities.

A Human-Centered Approach to Address Resistance

 Making this transition requires more than new policies or governance structures—it requires changing perceptions and behaviors. Effective implementations should be phased and tailored to an organization's existing supplier relationships, locum volumes, and program maturity, with a strong emphasis on communication and stakeholder engagement.

Changing culture is not achieved through mission statements alone. It requires leaders to model desired behaviors, create space for open dialogue, and reinforce accountability. Resistance often stems from concerns about disruption, loss of autonomy, or added administrative burden, making active human connection essential.

A vendor-neutral MSP can help facilitate this change by serving as an objective partner focused on organizational goals rather than supplier preferences. Because the MSP is not tied to any single staffing agency, it can build trust through transparent, data-driven decisions based on clinical fit, quality, compliance, and cost-effectiveness.

At the same time, a well-managed program improves the physician experience through streamlined onboarding, standardized processes, and clear communication that reduce administrative burden and accelerate time-to-start. For medical leadership, greater visibility into spend, compliance, and workforce performance transforms governance from a perceived obstacle into a tool for better workforce outcomes.

The Results: From Volatility to Workforce Control

Health systems that have made this transition report the same outcomes: decentralized spend is captured, operational risk is reduced, rates and stipends are brought under control, and compliance, reporting, and credentialing become consistent. Furthermore, talent is activated faster, and leadership achieves a clear view of the physician workforce for the first time. Locum tenens moves from being an unmanaged, siloed expense to a strategic workforce asset.

For one healthcare system, RightSourcing by Magnit improved provider deployment speed and workforce planning through a proactive, data-driven approach. A vetted provider pool spanning multiple facilities, combined with advance credentialing at more than one location, enabled qualified providers to be redeployed and onboarded in approximately 50% less time than a full credentialing process. Regular forecasting sessions with hiring leaders helped identify staffing needs 60–90 days in advance, reducing reliance on temporary privileges, lowering compliance risk, and increasing planned starts from 7% in 2024 to 38% in 2025. Strategic, market-based rate adjustments further improved hiring outcomes, reducing the average time from request approval to candidate acceptance from 20 days to just 6 days while accelerating candidate engagement and placement.

Locum Tenens as Part of Workforce Resilience

Locum tenens is a structural feature of the healthcare system as a whole: a necessary response to systemic workforce volatility and physician shortages. And it’s not going away. Health systems that try to reduce locum reliance purely in the name of cost control often end up trading one crisis for another.

The real challenge is integration. No single staffing model works in isolation. Permanent hires, travel staff, and locum physicians each serve a distinct role and need to be managed under a single umbrella of visibility. Vendor-neutral governance is what makes that possible, delivering the flexibility and insights health systems need without the compliance risks or operational chaos that unmanaged programs create.

Locum tenens will remain essential, but the era of the unmanaged locum program is no longer sustainable. Organizations that transfer their decentralized spend into a centralized governance infrastructure will be far better positioned to weather whatever workforce volatility comes next.

Discover the strategies and solutions healthcare organizations are implementing to overcome staffing challenges when you check out our eBook, “Best Practices and Evolving Strategies for Building an Internal Agency in Healthcare.”

Disclaimer: The content in this blog post is for informational purposes only and cannot be construed as specific legal advice or as a substitute for legal advice. The blog post reflects the opinion of Magnit and is not to be construed as legal solutions and positions. Contact an attorney for specific advice and guidance for specific issues or questions.