Locum Tenens vs. Permanent Practice: A Physician's Guide
The decision between locum tenens and permanent practice is no longer binary. It is a strategic calculation physicians make, and remake, at every career stage. With the locum tenens market projected to reach $9.9 billion by 2026 and a national physician shortage intensifying annually, this guide provides a structured framework for comparing both models across the dimensions that matter most.
What Is the Difference Between Locum Tenens and Permanent Physician Jobs?
How Locum Tenens Assignments Work
Locum tenens physicians fill temporary clinical needs at healthcare facilities nationwide, working as independent contractors. A staffing partner manages contracts, licensing, privileging, housing, malpractice insurance, and travel, all at no cost to the physician. You select assignments aligned with your clinical interests, geographic preferences, and availability.
How Permanent Physician Positions Work
Permanent employment follows the traditional model: a salaried position with a health system, group practice, or academic center. Benefits typically include health insurance, retirement plans, PTO, and CME allowances. In exchange, physicians accept fixed schedules, call obligations, and limited geographic mobility.
Is the Locum Tenens Market Growing in 2026?
Yes. The market is projected to rise from $9.1 billion in 2024 to $9.9 billion in 2026. Several forces are driving this growth:
- Physician shortage. The AAMC projects a shortfall of up to 86,000 physicians by 2036. HRSA modeling suggests the gap could reach 187,130 by 2037.
- Aging workforce. More than a third of active physicians will likely retire within the next decade.
- Burnout. Fifty-five percent of physicians report debilitating stress and 54% report burnout, pushing many toward models offering greater autonomy.
An estimated 56,000 physicians now work locum tenens — a number that continues to grow.
Comparing Compensation
Permanent compensation typically combines salary with employer-sponsored benefits. Locum tenens compensation is structured around per diem or hourly rates, with agencies covering travel, housing, and malpractice insurance. The independent contractor classification also opens tax deductions unavailable to salaried physicians. Avoid simple rate-to-salary comparisons and factor in covered expenses, benefits, and tax implications.
Schedule Flexibility and Work-Life Balance
In permanent roles, your schedule is employer-determined. In locum tenens, you build your schedule around your life. If you like, you can choose to work intensively for months, then take extended time away. With burnout at pandemic-era levels, schedule autonomy is increasingly a clinical sustainability strategy, not a luxury.
Credentialing, Licensing, and Regulatory Considerations
The Interstate Medical Licensure Compact now includes 42 states plus Washington D.C. and Guam, enabling qualified physicians to obtain new licenses in an average of 19 days. AMN Healthcare's in-house credentialing and licensing teams manage documentation, coordinate with facility medical staff offices, and track timelines — so you focus on patient care, not paperwork.
Clinical Variety and Professional Development
Each locum assignment exposes you to different healthcare systems, EHR platforms, and patient populations. This builds clinical adaptability that single-institution careers cannot replicate. Many physicians discover their ideal permanent positions through connections made during locum assignments.
Which Path Is Right for You?
- New attendings can explore settings and regions before committing long-term. 14.9% of physicians took their first locum assignment right after residency.
- Mid-career physicians increasingly adopt hybrid models, maintaining permanent positions while taking locum assignments during scheduled time off. Nearly half of physicians who have worked locums entered mid-career.
- Late-career physicians use locum tenens to reduce volume and eliminate call obligations while maintaining clinical engagement. 35.9% first worked locums after retiring from permanent practice.
