How much should you really pay a locum tenens agency? 2026 markup rates explained

Ask a locum tenens agency what their markup is and watch what happens. You'll get a bill rate. You'll get a list of everything that rate includes. You'll get reassurance that it's competitive. What you almost never get is the number itself: the percentage of your spend that goes to the agency rather than the clinician.

That number exists. Every agency knows theirs to the decimal. Here's what the market actually looks like in 2026, and what you should be paying.

The short answer

Traditional locum tenens agencies keep 30 to 50 percent of what you pay. On a typical hospitalist engagement billing $540 to $600 an hour, the physician takes home somewhere between $240 and $360, and the agency keeps the rest. Physician communities that compare notes report an even wider spread, anywhere from 15 to 60 percent depending on specialty, geography, and how badly the facility needs coverage.

For context, general temporary staffing markups across all industries most commonly land between 30 and 75 percent, and healthcare sits at the higher end because of malpractice, credentialing, and compliance costs. So locum markups aren't an outlier. They're just unusually well hidden.

Newer platform models run much leaner, typically 15 to 22 percent, because they've stripped out recruiter commissions and layers of account management. More on that below.

Bill rate vs. pay rate: the math nobody itemizes

Three numbers matter in every locum contract. The pay rate is what the clinician receives. The bill rate is what you pay. The gap between them is the agency margin.

The problem is that most contracts only show you one of these. The bill rate arrives as a single bundled figure, and the agency has no obligation to break it down. This is standard practice, not deception, but the effect is the same: you're negotiating a number without knowing what's in it.

Run the math on a real engagement. A 13-week hospitalist contract at 40 hours a week and a $600 bill rate costs your facility $312,000. At a 45 percent markup, roughly $140,000 of that never reaches the physician. At a 20 percent markup, the agency's share drops to about $62,000, and either your cost falls or the physician's pay rises. Usually some of both, which matters for retention on longer assignments.

What the markup actually covers

Agencies do real work for their margin, and it's worth being fair about what that includes.

Malpractice insurance is the big one. Most agencies cover clinicians under their own policy, and occurrence-based coverage for a high-acuity specialty is genuinely expensive. Credentialing and licensing support takes staff time, often weeks of it. Travel and housing coordination, payroll processing, and the financial risk of paying the clinician before you pay the agency all cost money.

A reasonable estimate is that these hard costs consume 10 to 15 percentage points of the markup. Everything above that is recruiter commission, account management overhead, and profit. On a 45 percent markup, that means roughly two-thirds of the agency's take is structure, not service.

That's the part worth negotiating. You can't argue malpractice premiums down. You can absolutely ask why you're funding a national agency's four layers of account management.

Why nobody publishes this number

The opacity is structural. NALTO, the industry trade association, sets standards of practice for its members, but itemized pricing isn't one of them. Bundled bill rates are the norm because they're simpler to quote and harder to compare.

There's also a quieter reason. Markup varies enormously by desperation. A rural facility that's been trying to fill an anesthesia gap for eight months will pay a markup that a suburban health system with three competing agencies never would. Publishing a standard rate would cost agencies their pricing flexibility, so nobody does it.

The result is a $9.6 billion market, per Staffing Industry Analysts, growing toward a projected $9.9 billion in 2026, in which the single most important price component is invisible to the buyer. Physician shortages are worsening through 2037 by HRSA's projections, so demand isn't going to fix this. Only buyer behavior will.

What you should actually pay in 2026

A fair traditional agency relationship in 2026 looks like a 25 to 35 percent markup with full itemization. Below 25 percent, a conventional agency struggles to cover malpractice and credentialing on physician placements. Above 40 percent, you're paying for overhead that doesn't benefit you.

Platform models change the range. Marketplaces that connect facilities directly with credentialed clinicians typically charge 15 to 22 percent, because software handles the matching and credentialing workflows that agencies staff with people. If you're weighing a platform against a national agency you already use, see how DirectShifts compares to AMN Healthcare on pricing structure. The tradeoff used to be service quality. That gap has mostly closed, and credentialing speed now often favors platforms, with some completing in around three weeks against the industry's typical 60 to 90 days. How that works in practice is covered in our licensing and credentialing guide.

Specialty matters too. Expect higher markups on hard-to-fill roles like CRNAs, psychiatry, and rural anything. Expect lower markups on advanced practice providers, where supply is growing fast. If an agency quotes you the same markup for an NP and an interventional cardiologist, one of those numbers is padded.

Four questions that change the conversation

Before signing anything, ask for the bill rate broken into physician pay, malpractice, travel and housing, and agency margin, each as its own line. Any established agency can produce this. Refusal tells you something.

Ask whether the malpractice policy is occurrence or claims-made, and who pays for tail coverage. A cheap markup with claims-made coverage and no tail can cost you far more later.

Ask what happens to the margin on extensions. The agency's work is heaviest in the first month. If a clinician extends for a second 13-week run, the credentialing is done and the travel is settled, yet most agencies keep the same markup. Negotiate a step-down.

And benchmark before you talk. Rate calculators and specialty-specific market data give you defensible reference points, and so does comparing quotes across models. Our DirectShifts vs. OpenLoop breakdown shows what the same role costs under two different structures. An administrator who walks in knowing the going bill rate for hospitalists in their state negotiates a different deal than one who doesn't.

The bottom line

You should pay for what an agency actually does: coverage, credentialing, insurance, speed. You shouldn't pay a premium for opacity, which is what an unexamined 45 percent markup mostly is. In 2026 there are enough transparent alternatives that the black box is a choice, and it's yours, not the agency's.

DirectShifts operates on a platform model with transparent pricing, so facilities see exactly what clinicians earn and what the platform charges. If you're benchmarking your current agency spend, request a rate comparison for your specialty mix. It takes a day and it's free.