An unfilled physician seat costs a hospital about $6,500 a day in forgone net revenue on average, and closer to $9,000 to $10,000 a day in the procedural specialties. The median search runs 118 days before a contract is signed, and the seat stays empty for months after that while credentialing runs. But the daily number hides where the pain lands. The cost is not uniform across specialties, and the most expensive mistake is not the empty seat. It is filling that seat fast with a physician who does not fit.
The best public number comes from the Merritt Hawkins 2019 Physician Inpatient/Outpatient Revenue Survey, which asked hospital CFOs what each physician generates in net revenue for the hospital. The average was $2,378,727 a year, or about $6,517 a day. That average is not the number to plan with. The survey breaks it out by specialty, and the spread is the whole story.
Cardiovascular Surgery. $3,697,916 per year. $10,131 per day.
Cardiology, invasive. $3,484,375 per year. $9,546 per day.
Neurosurgery. $3,437,500 per year. $9,418 per day.
Orthopedic Surgery. $3,286,764 per year. $9,005 per day.
Gastroenterology. $2,965,277 per year. $8,124 per day.
General Surgery. $2,707,317 per year. $7,417 per day.
Internal Medicine. $2,675,387 per year. $7,330 per day.
Cardiology, non-invasive. $2,310,000 per year. $6,329 per day.
Family Practice. $2,111,931 per year. $5,786 per day.
OB/GYN. $2,024,193 per year. $5,546 per day.
Psychiatry. $1,820,512 per year. $4,988 per day.
Source: Merritt Hawkins, 2019 Physician Inpatient/Outpatient Revenue Survey. Sixty-two completed CFO questionnaires covering 93 hospitals. Daily figures are annual net revenue divided by 365. Hospitalist and Emergency Medicine were not measured in that survey, so no figure is claimed for them here.
The reason is simple. Procedural, revenue-generating specialties drive the loss. An orthopedic seat left open three months forgoes about $821,691 by AMN Healthcare's own proration of that survey. The daily figure is real, but it lands hardest where the missing physician was billing procedures.
The vacancy that hurts is not the one most administrators expect. Hospitalist and Emergency Medicine seats can usually be covered, so an opening there rarely empties the building. The seats that bleed revenue are the procedural, revenue-generating specialties. Orthopedic Surgery. Inpatient OB/GYN and the deliveries that come with it. Psychiatry and mental health, where community-wide demand never meets supply. Gastroenterology. Any service that performs procedures and brings revenue into the hospital. When one of those seats sits open, the hospital loses margin and leaks patients to the system down the road.
For Hospitalist and EM, the cost shows up differently. The physicians who stay absorb the empty shifts and burn out. Or the hospital pays a premium for a last-minute locum to plug the hole. And every time a hole gets plugged by a physician who was not properly vetted, the hospital inherits a coverage problem dressed up as a solution.
Longer than the budget assumes. The AAPPR 2025 Physician Recruitment Benchmarking Report, covering more than 15,000 searches, puts the median physician search at 118 days from launch to signed contract, with oncology searches running a median of 332 days. AAPPR's 2026 report, covering searches active in 2025, lands at 119 days. CHG Healthcare's 2025 State of Locum Tenens report lands in the same place at a 129 day median.
Those figures stop at the signature. Credentialing, privileging, licensing, and onboarding come after. AAPPR's 2026 report found the typical physician began work 229 days after the position was posted. Multiply the daily figure above by the real number of empty days and a single procedural vacancy is a seven-figure line.
The true cost of a locum is the bill rate plus the costs the bill rate hides. Premium charges for last-minute placement. The internal time spent re-vetting a physician an agency did not screen. And the downstream cost of a poor fit, which can exceed the vacancy itself. The lowest bill rate is not the lowest true cost. A cheaper, faster fill that does not fit is the most expensive option a hospital can choose.
Start with the margin. Most agencies price wide. Markups commonly run 30 to 50 percent above what the physician is paid. AMN Healthcare, the largest publicly traded healthcare staffing firm, reported a 26.1 percent consolidated gross margin in the fourth quarter of 2025, roughly a 35 percent markup over clinician pay. That spread funds corporate overhead and layers of sales staff between the hospital and the physician. The hospital pays for all of it inside one blended rate it never sees itemized.
Admiral Healthcare was built the other way. Physician owned and run lean, with no layers between the hospital and the physician doing the work. Admiral treats a hospital's budget the way a good department chief treats a service line. Every dollar has to earn its place. That stewardship keeps the margin modest and puts more of the rate where it belongs, with the physician at the bedside.
The honest way to read the number is to align all three sides. The staffing firm, the hospital, and the physician should sit inside one financial structure that does not pull against itself. When the firm's margin is lean and visible, the hospital is not paying a tax to end a placement, and the physician is paid fairly enough to stay for the length of the assignment. That alignment is what keeps a placement stable instead of turning it into a countdown to the next vacancy.
Run the comparison on the revenue side, not the invoice side. A general surgeon generates about $2.7 million a year for the hospital by the Merritt Hawkins survey, about $7,400 a day. A well-matched locum surgeon who keeps that service line open is paid for out of revenue that would otherwise not exist. The savings are real. They only show up when the fit is real.
A bad-fit hire costs more than the vacancy it filled. Writing in NEJM CareerCenter, Jackson Physician Search president Tony Stajduhar put the total cost of hiring the wrong physician above $1 million once the pre-hire investment of up to $250,000, onboarding and credentialing of $200,000 to $300,000, and lost revenue of $130,000 to $150,000 a month are counted. The peer-reviewed literature agrees on the scale. Shanafelt and colleagues in JAMA Internal Medicine put the cost of replacing a physician at two to three times annual salary, which most health systems read as $500,000 to more than $1 million per departure.
The mechanism is brutal. A fast fill that fails creates patient-safety risk, care delays, premium replacement cost, and lost revenue from weak documentation, all at once. Speed-to-fill is the wrong metric. A fast hire that does not fit is just a future vacancy with a higher bill attached.
Here is one real case. A locum Emergency Medicine physician was credentialed quickly for a hospital in Kentucky. She started shifts and talked up her range of procedures and the cases she had handled. Within one to two shifts it was clear she could not do the job. She treated sepsis with the wrong antibiotics and did not draw blood cultures before starting them, which is a SEP-1 bundle failure and a patient-safety event. She could not carry the volume at a lower-acuity ER. Her notes were thin and missing the pertinent findings.
The cost stacked fast. She was pulled off the schedule mid-shift. The hospital scrambled to call in a replacement, which delayed patient care and cost more to compensate. The weak documentation lost charge capture on top of it. One unvetted fill produced a safety risk, care delays, premium replacement cost, lost revenue, and quality-measure exposure in a single shift.
This is why fit beats speed every time. A physician-led vetting process catches what a fast credential cannot. A clean background and a quick name-clear tell you the paperwork is in order. They do not tell you the physician can run your ER on a Saturday night. The screen has to be a clinical judgment made by a physician, not a resume match made by a recruiter racing a clock.
Admiral Healthcare is physician owned and physician led by an active clinician. Fahhad Farukhi, MD MBA MA, is a practicing hospitalist who works in hospitals and understands FTE holes, ED admit and transfer patterns, credentialing timelines, and the economics of a service line from the inside. Every other agency blog on this topic is written by a marketing team. This one is not. The vetting standard described here, the Name Clear and the Presentation, is run by the physician who wrote this page.
Fahhad Farukhi, MD MBA MA. Practicing Hospitalist. Board-Certified Internal Medicine. Managing Partner, Admiral Healthcare.