Many non-healthcare professionals these days work as independent contractors. They choose this because it allows them more job mobility, independence, and often higher tax savings. Engineers, consultants, information technology experts, and even some lawyers.
In medicine, an independent contractor is often referred to as a per diem. I won’t explain the terminology further since it’s not always consistent. This post will focus on pursuing a per diem career and how to transition from an associate role into a per diem one.
It can be a little scary making the switch from a full-time or part-time physician to a per diem physician. Specifically, it’s the loss of the benefits and the security of the job.
My residency buddy remained a per diem out of residency for 4 years before accepting a job. Another friend did per diem hand surgery until he could land a full-time gig.
Personally, I really struggled with the decision to switching to per diem. All the factors which I’m about to address came to the surface. And now when I look back, I should have made the transition much sooner.
Healthcare professional employees who get work-benefits from an employer are often called associates in medicine or simply employees. Other terms used are pre-partners and eventually partners.
Benefits For Associates
A full-time employee (associate) gets retirement benefits in form of 401k’s or other defined contribution plans such as 403b’s or 457’s. As you vest into the company you might even be eligible for a pension or a cash balance plan.
Health insurance, life insurance, and disability insurance are the other job benefits offered by employers. These are group policies which are fairly inexpensive for the employer but terribly bloated. They offer way too much in some areas and are inadequate in others.
Paid time off, educational leave, CME money, or reimbursement of licensure are other common offerings by employees.
In this previous post I discussed all the different benefits offered by employers and what they are worth. So I won’t spend much time getting into that again here.
Job Security As An Employee
There is a common misconception out there that you cannot be fired on a whim as an employee. It’s believed that you have some specific rights which required your employer to ‘prove’ that you needed to be let go.
This is false. Essentially, your employer can let you go for no reason except for discriminatory or retaliatory reasons.
The reason you see employers going through such great lengths to give a valid reason for letting an employee go is because they don’t want the legal hassle of someone coming back and suing for wrongful dismissal.
Per Diem/Independent Contractor Work
As a per diem you still sign an employment contract but there is nothing owed or promised to you. The employer gets to have you see their patients without having to offer you health insurance, retirement benefits, or workman’s comp.
On the flipside, you don’t have to sit through boring fucking meetings, you don’t need to be on backup, you don’t deal with office drama, and you have the freedom to work when you want, for whom you want.
Almost always malpractice insurance is offered since that protects the company as much as it protects you. I haven’t yet come across a per diem gig that didn’t offer malpractice.
To replace the benefits offered by a traditional employer, you will only need the following as the basic items:
- health insurance
- disability insurance
- (life insurance)
Benefits You May Not Need
There is no need for life insurance if you don’t have dependents. It costs often less than $500/year if you were going to purchase your own.
You wouldn’t need any retirement accounts since you are still able to save and invest your money without a 401k. Alternatively, you can establish your own individual 401k or a SEP IRA which are often much more efficient than anything your employer would provide.
You can even create your own pension, such as in a cash balance plan.
If you aren’t yet financially independent and you have dependents and you spend to what most healthcare professionals spend then you likely will need disability insurance. I disagree with the blanket statement that everyone needs disability insurance.
Statistically, most disabilities are very short-lived; often less than 3 months and easily covered with your emergency funds.
I don’t pay for my own disability insurance because I am both self-insured and would likely qualify for government disability.
Making The Transition
For those who are ready to make the transition I have a checklist of things to do before taking the leap.
Transitioning to per diem for me meant:
- more freedom
- more job opportunities
- a higher hourly income
- a tax advantage
- no longer being on backup
- not having to deal with management & bosses
4 Steps Before You Leave
- figure out your budget to cover household expenses
- start working for a per diem gig on the side
- shop for your own health insurance ($150-300/month)
- shop for your own disability policy ($300-500/month)
You don’t need a per diem gig that will pay you the same as you are getting paid in your full-time employment. You can always piece together multiple per diem gigs to earn more, if needed. That will come with time.
You don’t need to sign the contract for health insurance or disability insurance until you have left your current employer. Just shop around so you get pricing ideas.
You also don’t need to worry about taxes or retirement accounts until you’ve started working on your own. That stuff can wait until it’s time for you to file taxes.
Let’s address job security. I have never been let go from a per diem gig. And I can’t even imagine how a medical group could run without a per diem pool.
Furthermore, I am more secure as a per diem physician because I have multiple companies for which I offer services. Should one decide to let me go, I have others to fall back on.
Leave Of Absence
If you are currently working as an associate, whether full or part-time, you can request an approved-leave from your employer with the option to return.
Most well-organized medical groups will have such an option available and you can give any reason you like. Your current benefits and your position will be held for you for up to 12 months, should you return.
In that 12 months you can try out the per diem lifestyle.
You can buy your own health insurance and disability policy to start.
Then try out different/multiple per diem gigs.
And if you are unhappy with the per diem lifestyle at the end of the 12 months then you can always return. Because this would be considered an “excused leave” or a “leave of absence”, you would return to exactly where you left off.
Looking For Per Diem Jobs
I started moonlighting in residency and my fellow residents either didn’t moonlight because they weren’t comfortable being on their own or weren’t able to find per diem gigs.
The latter group complained that either the application process was too tedious, or there were no shifts available, or that no company was hiring, or that they didn’t even know where to start. Of course, these weren’t accurate impressions of the moonlighting pool in Los Angeles.
Contact The Clinics/Hospitals
Google “medical clinic [your zip code]” and you’ll find a ton of different healthcare groups. Go on their website and send an email to HR. If HR isn’t listed, send a copy of your resume with the subject: Per Diem to their ‘contact’ email and ask for it to be forwarded to HR.
50% might not get back to you. Send them a follow up email until you are connected with the right person. And finish by asking them to keep you in mind for future per diem opportunities if nothing is currently available.
Don’t wait until jobs are listed. Jobs often don’t get listed.
Ask The Moonlighters
If you want to know where there are per diem jobs, then ask the doctors who are per diems. They have most of the up to date scoop. Residents are especially full of this sort of knowledge.
A simple question like “where else do you moonlight?” is all you need. Most will share that information with you readily. You’ll even hear some good insight about how each gig compares to another.
Get On LinkedIn
Per diem pools are hard to come by for most medical groups. You see, people start out per diem and soon thereafter they will leave for an associate roles. So the medical group is often desperate to maintain their per diem pool.
In order to accomplish this, they send out their ads to recruiters who get paid for each healthcare professional they recruit. These headhunters are plentiful on LinkedIn.
On your profile there is a specific section for recruiters and employers that you can fill. This lets them know that you are interested in moonlighting and per diem roles only.