Bringing medical locum recruitment in house to drive down costly agency fees

The Minns Labor Government will begin the work of setting up an internal medical locum agency to address the growing cost of attracting medical locums to regional areas.

Locums are medical officers engaged to fill a temporary vacancy – most commonly used to address worker shortages in the regions and engaged through staff hire agencies.

In 2022-23, agency commissions for locum doctors represented around $37 million, up from $20 million in 2020-21.

COVID-19 was a major factor in driving up costs. As staff availability tightened, so too did the need to source additional staff through agencies.

But the NSW Government is committed to bringing and keeping down the cost of external commission fees.

$6.3 million in the 2024-25 NSW Budget, will examine the feasibility of a NSW Health Locum Agency, including how it would work and how much money could be saved as a result.

This announcement builds on the work of the NSW Government to improve access to care in regional, rural and remote communities, including:

  • doubling rural health incentives for critical vacancies in hardest to fill roles
  • boosting doctors in regional GP surgeries as well as hospitals through the Single Employer Model
  • rolling out key worker accommodation, and
  • delivering an extra 500 regional paramedics.

NSW Treasurer Daniel Mookhey:

“This is a must-have investment in the health of regional and remote communities.

“Building an in-house agency means we can drive down rising external fees and put more money back into the health workforce.

“This $6.3 million investment marks another step in the Minns Labor Government’s pledge to build a better health system for everyone in NSW.

“We can afford this policy. Because we cut the state’s debt, we have cut the state’s interest bill.  And we can use that money to make a difference to the health outcomes of people in regional and remote NSW.”

Minister for Health Ryan Park:

“Locums and other contingent workforce are important features of our health system to enable it to remain agile, and to scale up and down as needed.

“But I’ve always said that I am determined to see more of our health spending flow directly to our clinicians, and I think that’s a very reasonable community expectation.

“The Government is focusing on strategies to address the growing cost of this service, and the proposed internal agency will help to lower external fees across the state. It will also allow medical locums to trust us to place them in our hospitals.

“Our rural and regional health staff have strong connections to the communities they live in. We acknowledge and greatly appreciate their commitment to delivering exceptional care to the people they serve.”

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