$150K to $300K per quarter. That is what a single unfilled specialist seat costs your organization in locum coverage alone.
    Healthcare Cost Avoidance

    Stop Paying Locum Agencies. Start Retaining Your Physicians.

    Every month a physician position sits unfilled, your organization pays locum agencies, loses patient volume, and burns out the staff covering the gap. A $5,250/year student loan benefit eliminates the vacancy that creates the spend.

    March 20, 2026 8 min read + calculator BenefitPlus Editorial
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    What Is Locum Tenens and Why Does It Cost So Much?

    "Locum tenens" is Latin for "placeholder." In healthcare, it refers to a physician, nurse practitioner, or other licensed provider who temporarily fills a position while an organization works to recruit a permanent hire. Hospitals, health systems, and private practices turn to locum agencies when a physician resigns, retires, or takes extended leave, when a newly recruited provider has a delayed start date, when a department is scaling faster than the hiring pipeline can fill, or when a specialist seat goes uncovered between departures and new hires.

    Locum tenens is not a staffing strategy. It is an expensive bridge that signals a retention or recruitment problem. And the costs compound faster than most administrators realize.

    $2,200
    Average daily rate across physician specialties
    $66K+
    Typical 30-day gap cost (before agency markup)
    $200K+
    Typical 90-day specialist gap cost
    $5,250
    Annual cost of a Section 127 SLRP benefit

    What Locum Coverage Actually Costs by Specialty

    Locum tenens providers are billed through agencies at daily or hourly rates. The table below reflects industry-estimated daily rates across the most common locum specialties. These figures do not include agency markups (typically 25% to 40%), travel allowances, housing, or malpractice tail coverage, all of which can add significantly to the total.

    SpecialtyDaily Rate (Est.)30-Day Gap90-Day Gap
    Surgical Specialties
    Orthopedic Surgery$2,500 – $3,500$75K – $105K$225K – $315K
    General Surgery$2,000 – $3,000$60K – $90K$180K – $270K
    Anesthesiology$2,500 – $3,500$75K – $105K$225K – $315K
    Medical Specialties
    Cardiology$2,200 – $3,200$66K – $96K$198K – $288K
    Gastroenterology$2,000 – $2,800$60K – $84K$180K – $252K
    Pulmonology / Critical Care$2,000 – $2,800$60K – $84K$180K – $252K
    Neurology$1,800 – $2,600$54K – $78K$162K – $234K
    Radiology$1,800 – $2,800$54K – $84K$162K – $252K
    Hospital-Based / Emergency
    Emergency Medicine$1,800 – $2,800$54K – $84K$162K – $252K
    Hospitalist / Internal Medicine$1,500 – $2,200$45K – $66K$135K – $198K
    Psychiatry$1,600 – $2,400$48K – $72K$144K – $216K
    Women's Health
    Maternal-Fetal Medicine (MFM)$2,200 – $3,000$66K – $90K$198K – $270K
    Urogynecology (FPMRS)$2,000 – $2,800$60K – $84K$180K – $252K
    General OB/GYN$1,400 – $2,000$42K – $60K$126K – $180K
    Primary Care / Advanced Practice
    Family Medicine$1,200 – $1,800$36K – $54K$108K – $162K
    Nurse Practitioner / PA$800 – $1,400$24K – $42K$72K – $126K

    Sources: Locum tenens agency rate surveys, CompHealth and Staff Care market data, AMN Healthcare Physician Solutions, 2025. Rates represent estimated ranges and vary by geography, contract terms, and availability.

    The Math That Changes the Conversation

    The cost comparison between locum coverage and a student loan repayment benefit is not close. It is not even in the same order of magnitude. Whether you run a rural hospital with two hospitalists, a multi-specialty group practice, or a large health system staffing emergency departments across a region, the arithmetic works the same way.

    ScenarioCostNotes
    BenefitPlus annual employer cost (per provider)~$5,250$437.50/month, tax-free under IRC Section 127
    One 90-day specialist locum gap avoided$150K – $315KVaries by specialty. Agency markup adds 25%+.
    Net employer savings (one gap avoided)$145K – $310KBenefit pays for itself many times over
    The framing for your CFO or COO: "Every month a specialist seat sits open, you are either paying a locum or leaving revenue on the table. A tax-free student loan repayment benefit is one of the fastest levers to make your offer competitive against health systems that can match on salary but cannot match on a personalized financial benefit."

    Why Retention Is the Real Locum Strategy

    Locum agencies do not solve the underlying problem. They manage the symptom. The root cause is one of two things: physicians leave because a competitor offers a more attractive total compensation package, or new recruits take longer to close because the offer lacks differentiation.

    Student loan debt is the lever. Specialists carry $200,000 to $350,000 in education debt. Hospitalists and emergency physicians carry $180,000 to $280,000. Psychiatrists carry $170,000 to $250,000. Nurse practitioners carry $50,000 to $115,000. When an organization offers a tax-free student loan repayment benefit, two things happen simultaneously. Current providers are less likely to leave because the benefit creates a financial incentive to stay, especially when paired with a vesting schedule. And new recruits close faster because the benefit differentiates the offer from competitors who can only compete on salary.

    The result is fewer vacancies, shorter vacancy windows, and dramatically less locum spend. SHRM data shows that employers offering student loan repayment see a 26% reduction in turnover and employees are 2.4x more likely to remain with their current employer.

    The multiplier effect: A hospital that avoids even one 90-day specialist vacancy per year saves more in locum costs than the entire annual cost of running a BenefitPlus student loan repayment program for an entire department.
    Interactive Calculator

    Locum Cost Avoidance Calculator

    Select your specialty, adjust the inputs, and see how a student loan repayment benefit compares to your locum gap spend.

    $2,300
    $1,800$2,800
    3
    112
    10
    1100
    Cost ComparisonEmergency Medicine
    Locum Gap Cost
    $207,000
    3 month(s) at $2,300/day
    Annual SLRP Cost (All Enrolled)
    $52,500
    10 provider(s) × $5,250/yr
    Locum cost per day$2,300
    Total gap days90
    Employer FICA savings on SLRP$4,016
    Net savings (one gap avoided)$158,516
    Return on SLRP Investment3.9x

    Your organization would need to avoid just 0.8 months of locum coverage to fully pay for the entire annual SLRP program for all 10 enrolled providers. Everything beyond that is pure savings.

    Interactive Calculator

    Locum Cost Avoidance Calculator

    Select your specialty, adjust the inputs, and see how a student loan repayment benefit compares to your locum gap spend.

    $2,300
    $1,800$2,800
    3
    112
    10
    1100
    Cost ComparisonEmergency Medicine
    Locum Gap Cost
    $207,000
    3 month(s) at $2,300/day
    Annual SLRP Cost (All Enrolled)
    $52,500
    10 provider(s) × $5,250/yr
    Locum cost per day$2,300
    Total gap days90
    Employer FICA savings on SLRP$4,016
    Net savings (one gap avoided)$158,516
    Return on SLRP Investment3.9x

    Your organization would need to avoid just 0.8 months of locum coverage to fully pay for the entire annual SLRP program for all 10 enrolled providers. Everything beyond that is pure savings.

    Beyond Locum Costs: The Hidden Expenses of Vacancies

    The locum daily rate is only the visible cost. Organizations with unfilled positions also absorb lost patient revenue from reduced capacity and diverted cases, managed care contract risk if covered-lives or access-time thresholds are not met, burnout and overtime costs for remaining staff covering the gap, recruitment agency fees (typically 15% to 25% of first-year salary for physician placements), credentialing and onboarding costs for the eventual replacement hire, and lost referral volume when patients and referring physicians go elsewhere. When all of these are factored in, the total cost of a single physician departure can exceed $500,000 for a specialist and $250,000 for a hospitalist or primary care physician.

    Frequently Asked Questions

    How much does locum tenens coverage cost per month?
    Locum tenens costs vary widely by specialty. Orthopedic surgeons and anesthesiologists command $2,500 to $3,500 per day ($75,000 to $105,000 per month). Emergency medicine physicians run $1,800 to $2,800 per day. Hospitalists cost $1,500 to $2,200 per day. Psychiatrists cost $1,600 to $2,400 per day. Nurse practitioners range from $800 to $1,400 per day. These figures do not include agency markups, travel, or housing allowances.
    Which specialties have the highest locum costs?
    The most expensive locum specialties are orthopedic surgery and anesthesiology (both $2,500 to $3,500 per day), followed by cardiology ($2,200 to $3,200), general surgery ($2,000 to $3,000), and maternal-fetal medicine ($2,200 to $3,000). A single 90-day gap in any of these can cost $200,000 to $315,000 before agency markup.
    How does a student loan repayment benefit reduce locum tenens costs?
    A tax-free student loan repayment benefit under IRC Section 127 helps healthcare employers retain current physicians and close new hires faster. When a provider stays rather than leaving, or a new recruit accepts 60 to 90 days sooner because of the benefit, the organization avoids the locum coverage that would otherwise be needed to fill the gap. At $5,250 per employee per year versus tens of thousands per month in locum costs, the benefit pays for itself many times over.
    What is the ROI of a student loan repayment benefit for a hospital?
    For an organization that avoids even one 90-day specialist vacancy per year, the locum cost savings alone typically exceed $150,000 to $300,000 depending on the specialty. The annual cost of a BenefitPlus student loan repayment benefit for that same physician is approximately $5,250. That represents a return of 30:1 or higher on a single avoided gap.
    Is the student loan repayment benefit tax-free?
    Yes. Under IRC Section 127, employers can provide up to $5,250 per employee per year in student loan repayment that is completely excluded from the employee's gross income. Neither the employer nor the employee pays federal income tax, Social Security tax, or Medicare tax on the amount. The One Big Beautiful Bill Act of 2025 made this provision permanent.
    Does this work for all physician specialties?
    Yes. The Section 127 benefit applies to any employee with qualifying education debt, regardless of specialty. Whether you are retaining an orthopedic surgeon, an emergency medicine physician, a psychiatrist, a hospitalist, or a nurse practitioner, the tax-free student loan repayment benefit works the same way. BenefitPlus supports all loan types including federal Direct, Grad PLUS, FFEL, and private education loans.
    How quickly can an organization launch this benefit?
    With BenefitPlus, plan setup takes approximately one week. Employee enrollment and loan verification can be completed in week two. Payments begin flowing to loan servicers by week three. There are no payroll system changes required and no IT involvement needed.

    Your Locum Spend Is Your Biggest Argument for BenefitPlus

    Every month of locum coverage you avoid pays for years of student loan repayment benefits. Talk to us about setting up a program that retains your physicians and eliminates the vacancies that drive locum costs.

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