By Bharat Sundaram, CEO, Hallmark
Key takeaways:
- Physician and APP shortages are turning locum tenens from a stopgap into a core workforce strategy. Unfilled roles now threaten patient access and revenue directly, with HRSA projecting a shortage of roughly 141,000 physicians by 2038.
- Health systems increasingly want visibility into locums costs, performance, and credentialing, not just a fast fill. Agencies that explain their pricing and consistently deliver will out-position those competing on rate alone.
- Centralizing requisitions, vendor comparisons, and “name clear”/credentialing processes cuts disputes and revenue loss, letting agencies compete on service and specialty expertise instead of database size.
For many years, healthcare staffing agencies have played an invaluable role in helping health systems address labor shortages. Their speed, relationships, and access to talent remain critical. But as physician and APP (collectively “provider”) shortages persist, labor costs rise, recruitment competition increases, and health systems work to preserve patient access and protect revenue, locum tenens staffing is becoming a more critical part of workforce strategy.
This shift brings both opportunity and challenge. Health systems need reliable provider coverage, but they also want greater visibility into costs, supplier performance, credentialing / privileging status, and the sourcing process. Agencies that rely solely on transactional relationships may see partnerships strained. Those that help build a transparent, responsive locums strategy can become indispensable partners.
Beyond simply filling positions
An unfilled provider role affects far more than one department. It can restrict patient access, place added strain on existing staff, delay procedures, and impact revenue. In many cases, securing a locum is not simply convenient. It is a necessary response to an urgent operational and patient care need.
The need is likely to grow. The Health Resources and Services Administration projects a shortage of approximately 140,000 providers through 2036, further emphasizing the vital role of versatile and reliable provider staffing strategies.
Healthcare leaders also want a clearer understanding of physician and APP coverage costs. Staffing, scheduling, excess shift pay, incentives, credentialing status, and agency expenses are often managed by different teams in separate, standalone systems. This fragmentation makes it hard to evaluate in real time the tradeoffs among hiring permanent staff, asking clinicians to work additional hours, or engaging locums talent.
Workforce costs rose 5.6% in 2025, creating further pressure on health systems to make better, more informed labor decisions.
Harnessing transparency as a competitive advantage
Health systems increasingly expect visibility into workforce spending, supplier performance, and outcomes. They want confidence that they are paying an appropriate rate for physicians and APPs, accounting for any variation in costs based on specific specialties, unique skills, and differentials for certain locations. Metrics such as fill rates, submission / response times, assignment completion, and submission quality are becoming more important.
Transparency does not mean agencies must disclose every component of their internal pricing. It does mean creating productive conversations about performance, market conditions, and value. A higher bill rate may be justified when demand is urgent, a specialty is scarce, or a role is located in a difficult-to-staff market. Agencies that provide that context, and consistently deliver, will be better positioned than those that focus only on submitting a rate.
Rethinking the locums supply chain
The locums market is substantial and growing, with an estimated value of $9.6 billion in 2025. Yet the market is also concentrated: a limited number of major firms with smaller agencies competing for the remaining share. For health systems, that concentration can raise questions about supplier choice, speed, and competition on rates and coverage. For agencies, it can make it harder to compete on relationships and quality alone.
A vendor-neutral workforce model can help. A centralized process paired with a purpose-built technology platform for distributing requisitions, comparing responses, and evaluating partners against consistent criteria enables agencies to compete on service, speed, specialty expertise, and performance, not simply size.
For staffing agencies, the goal should be to become trusted partners that health systems can rely on for strategic collaboration and to support patient care. This creates more meaningful competition and broader growth opportunities.
Simplifying name clear and credentialing complexities
Locums staffing presents unique operational challenges, particularly around “name clearing,” determining which agency has the right to represent a physician or APP for a specific opportunity. Unlike other staffing categories, physicians (and in some cases APPs) may have agreements that limit how and when they can be presented to a client.
When name clear processes are unclear and not thoroughly documented, disputes can slow submissions and place health systems in the middle of conflicts between agencies. Medical staff privileging, credentialing, and payor enrollment present other potential barriers when coverage is urgently needed. The lack of a single system bringing all these together can lead to uncertainty on whether a provider is cleared to work as well as potential revenue loss if payor enrollment status is not readily available when making staffing decisions.
Technology, workflow automation, and clear processes can help validate name clear status, document activity, improve visibility into credentialing status, and reduce avoidable issues. Agencies that operate effectively within these systems can help clients move faster and more effectively while protecting trust across the supply chain.
The opportunity ahead
Locum providers are a growing and increasingly critical part of a healthcare organization’s ability to ensure access to care for their patients. As the physician and APP shortage becomes more pronounced, the need for locums will likely increase, and managing this part of the workforce more strategically is imperative to a medical group’s clinical, operational, and financial success.
From an agency perspective, locums staffing offers meaningful growth opportunities for those ready to adapt. By focusing on transparency, collaboration, performance, and efficiency, agencies can meet urgent coverage needs while becoming more strategic partners with health systems.
The agencies that win will not be defined solely by the size of their candidate databases. They will be the ones that help health systems make better workforce decisions, protect patient access, and create a more transparent and effective locums supply chain.
Partnering the right technology with the right agencies and the right processes can support a more strategic approach to managing the locums provider workforce for both healthcare organizations and the agencies that support them.
Bharat Sundaram is the CEO of Hallmark, Healthcare’s Workforce Operating System designed to help health systems and large medical groups nationwide optimize scheduling, staffing and compensation across their physician enterprise. Built by operators who have lived and led inside health systems, Hallmark pairs purpose-built technology with hands-on expertise to ensure that workforce strategies translate into measurable results and high-quality patient care.
