Becoming an independent contractor

Sandeep K. Aggarwal, MD, talks about overcoming his fear of going independent and how he prepared for life as a locum tenens physician.

We all tend to be creatures of habit and settle into our comfort zones — albeit at times to a fault. We don’t always allow ourselves to explore new opportunities, either within an organization or out. It’s just easier to continue with the status quo, even if it’s painful. However, some have an entrepreneurial spirit and are willing to take risky, though calculated, moves to possibly improve their current position, find a new position, or enhance both. There is always fear of the unknown, but I find with careful analysis that this can be lessened. It is not to say that it will be abolished but at least reduced to an acceptable level.

Not knowing what to expect

When I started looking into locums, I really didn’t know what to expect. I had never experimented with short stints, but rather I thought — given the current healthcare paradigm — that perhaps now was a good time to make the leap. I had run my own solo practice at one point, which did involve leaving the security of a group private practice, so I had some familiarity with venturing out of my comfort zone. But it wasn’t easy then, and it certainly wasn’t easy now. Plus, the process of setting up an LLC wasn’t that foreign to me given my prior experience.

A leap of faith

I had already contacted my recruiter and begun discussion on the logistics of starting a full-time locum practice. Due to the nature of my current employment at that time, I wasn’t permitted to moonlight, so it was all or nothing. Given my skills as a general neurologist, I felt I could always find a job at another facility if this didn’t work out. I had my reflex hammer and tuning fork in tow and could deploy at a moment’s notice.

I also had to think of my family and how this would impact them. At this point, my wife and I were empty nesters, so that part was taken care of. She was quite busy in her job as an independent career woman in the healthcare industry. With technology these days, it would be rather easy to keep up with each other on smartphones, facetime, and old-fashioned phone calls. Traveling was also easier for quick jaunts back and forth. I likened the job to consultants who travel for work during the week and return home on the weekends. Since I felt fit, I thought I could accomplish this quite readily.

Learning the ropes

Once I linked up with my recruiter and got the ball rolling, we spoke about opportunities. I chose a firm that was NALTO-certified and worked with a variety of hospitals around the country. I provided my skill set, and we started the process of matching prospective facilities. I was somewhat naive in the beginning but later heavily relied on the job description — just like I did when I was an employer hiring staff for my solo practice. I felt that adherence to these requirements led to more satisfaction all the way around. I also learned that there are idiosyncrasies and quirks inherent to each facility related to credentialing and privileging and to the paperwork and time required to accomplish these tasks.

With locums comes some flexibility and freedom. The latter is especially important because one is not restricted by a solo practice or employment contract. If a facility isn’t a good fit for either side, there is a 30-day grace period. Since there are plenty of hospitals that have shortages of physicians, it is not altogether that difficult to find a locums job.

a neurologist looking at MRI cross-sections

Taking time for yourself

Locums is a great way to explore areas of the country where ordinarily one would not go to. There are so many beautiful small towns and friendly people dotted across our magnificent land to explore and learn about. There is the possibility of working full- or part-time. The finances will dictate this part as holidays and vacations are not reimbursed like they are in employment situations. Like someone in solo practice, there is also a loss of income when taking time off, but there are no overhead expenses to cover.

Running your business

During the early stages of deciding on a full-time career in locums, one has to think about the finances, especially related to taxes, retirement, and health insurance. Since a locum provider is considered an independent contractor (Form 1099), all expenses are assumed by the individual. A locum is typically paid with a gross salary on a weekly basis. It is then incumbent on the provider to pay both state and federal taxes on a quarterly basis as an estimate based on the tax bracket.

One advantage is that a locum can set up a simplified employee pension plan (SEP) that allows a rather substantial amount of pretax funds to be diverted. Other tax entities can be discussed with the accountant based on the needs of the individual. Finally, health insurance is not covered and can be quite costly unless someone is older and on the Medicare system. In that case, this would have to be a serious consideration. Some providers have spouses that have insurance through their companies and are part of a family plan.

Thoughtful preparation and flexibility

The transition to locums has to be thoughtful and studied quite carefully. Even with this preparation, there are always glitches along the way that require flexibility. Once the new job starts, there is some stability, but it is always good to stay in touch with the recruiter and have back up plans in place. It’s a dynamic and capricious business.