What is a fair bill rate for allied health travelers

Most allied health travelers have heard of the bill rate. That mysterious number that is supposed to hold all the secrets of our worth. Some recruiters will tell us the number. Some are not allowed to. And many are a bit nervous to tell us, knowing that the first time a traveler hears their bill rate number they might be mad and confused. At face value, it could sound like agencies are taking too much of our hourly rate and it feels unfair. Well, let’s break down what this number is and learn what might be fair or not fair for us travelers.

The bill rate is the amount of money a hospital is paying for each hour a travel tech works. This hourly rate is paid to your recruiting company. One important thing to make sure you heard: It is paid to the agency only on the hours you work. If you call off sick or you don’t work all your hours for any reason at all, the agency made zero that day too.

The bill rate is everything in this industry.

  • It pays for us travelers.
  • It pays for the VMS/MSPs.
  • It pays for agencies and recruiters and the coffee they brew in their break room.
  • It pays for the rent for the office that holds that break room.
  • It pays for liability and insurance coverage.
  • It pays for medical malpractice lawsuits.
  • It pays for the agencies to go to conferences like TravCon to market to you.
  • It pays for a Christmas gift from your agency.
  • It pays for your stipends and travel expenses to get to your contract.
  • On and on I can go.

Let me be clear. There is no money outside of the bill rate.

Everything that has a cost inside travel healthcare industries is paid for from this number. And it is all paid for only when and if we allied health travelers actually work.

The goal of the whole industry is to get qualified and skilled allied health travelers (us!) to a place that needs us to fill a gap in their patient care for usually 13 weeks at a time. The place that needs us decides a number they are willing to pay per hour to have us come. It’s a pretty high number because they know it needs to be high enough to cover the high cost of us PLUS the cost of the agencies that find us and employ us.

The agencies do a ton of work for the facilities (which we talk details about in other blogs) and they also take away some of the liability. If something happens where an allied health traveler gets sued (which happens every day) the agency takes the hit and does the mounds of paperwork for that instead of the hospital. The agency is our employer after all and everything from medical malpractice suites to medical insurance to short and long term disability is paid for by them. These things are crazy expensive. And (you guessed it) they only get that money from the bill rate.

The bill rate is not “our” money as travelers. Only part of it is (the pay rate). The bill rate was designed to be shared between us and every player who helped get us to that job.

Bill rates don’t cover allied health traveler orientation?!

The bill rate is not just one set number. Contracts have all kinds of incentives and clauses in them. Many contracts do not pay agencies for orientation hours (or they are way less). Many contracts have discounts in them for overtime hours. And many contracts pay agencies net 30 or net 60 or net 90– meaning the agency is paying us, travelers, each Friday but they will not see that money until after the contract is over. And they also pay us for travel expenses and licensure expenses before they ever get money from us working.

Take into account travelers who cancel their contracts. Agencies can get penalized thousands of dollars for our lack of integrity and also, they will never make up for the money they already gave us for travel reimbursements and orientation hours and licensure and drug screens (etc etc). Every time we sign a contract with an agency they are taking a chance on us to work the hours we said we would so they can make some money too.

What are the common bill rate numbers?

$65-75 an hour is a common bill rate for a travel SLP, PT, or OT.

That is for your normal hours. Orientation may be fully unpaid or paid at only a fraction of the bill rate. Again, inside of that hourly rate has to come to your insurance, your liability, your credentialing, your travel reimbursement, you licensure reimburse, etc.

So when you see $65 an hour, much of that rate is already eaten up by these things. Then the company has to take the money it costs to run their company (overhead costs) plus take a profit before we ever get to talk about our pay package.

Who decides an allied health travelers’ bill rate?

The MSPs/VMSs are a big influencer in bill rates. These are the middlemen between most of the hospitals and our agencies. MSPs can negotiate bill rates with the hospitals to have the hospital pick them to represent them. If one MSP can offer a lower bill rate than the other MSP, they will be more likely to win the contract.

So the MSPs and VMSs did lower the bill rates a bit when they got popular. They also standardized the bill rates more so we see less fluctuation than in the past. There are many great things that came with the MSP and VMS popularity but for bill rates, it mostly drove them downward.

Ultimately though, it’s up to the hospital or facility hiring us what they are willing to pay. Recruiters can sometimes go back to the facility and ask for a higher bill rate. This is especially useful if they are having a very hard time filling the position and you are ultra qualified. Or sometimes recruiters will go in and negotiate/bid at a lower bill rate to try to make their candidate with less experience be more desirable. I personally don’t like the race to the bottom with bill rates and encourage recruiters to not to use this tactic.

For future trends, bill rates seem to be mostly holding steady.

Calculating the total amount of money

Say we have a bill rate of $65/hour. Let’s do some math to find out an example of a whole package we’re working with:

  • $65/hr bill rate
  • 13 weeks
  • 40 hours a week
  • $65 x 40 hours per week x 13-week contract
  • The total package (the amount we have to share): $33,800

Keep in mind $33,800 is if everything goes to plan: If you call in sick, the recruiting company is not paid that day and the total package goes down. If you are taking a lot of time off in the 13-weeks, same thing. Or if you cancel a contract, we can really hurt an agency since they pay so much upfront to us before we work our hours. The agency is taking much more of the risk than us at the start of a contract.

On a $65/hour bill rate, our blended rate might be around $47 hour. The reason it’s called a blended rate is that many things are included in that $47/hour, such as:

  • Taxable (w2) hourly wages (commonly around $20/hour)
  • Your tax-free money to reimburse housing (if you qualify)
  • Your tax-free money to reimburse meals and incidentals (if you qualify)
  • License reimbursement
  • Your travel reimbursement
  • Other more rare reimbursements like CEUs or sometimes scrubs
  • Bonuses (but remember, bonuses are taxed)

From this, your take-home each week might be around $1600 if you work all your hours.

What are the common profit margins?

An agency will usually take around 30% of the full bill rate and of that, profits might be around 20-25%.

Agencies usually make profits somewhere around the ballpark of $5,000 – $6,000 per 13-week contract depending on the specialty, if we work all our hours, and how big they are. An agency’s overhead costs play a big part in this. This is not what your recruiter makes- just the agency as a whole and it gets spread around to many people and places.

Here is an example of a $65 bill rate over 13 weeks:

  • $33,800 total pot (When multiplied over 13 weeks)
  • $10,000 to the agency: (This is profits + costs to do business combined)
  • $23,800 to us (That is our profits and comes to us in tax-free stipends and taxed hourly wage- about $1830 a week)

In the business world, a 20% profit is pretty average. And with the vulnerabilities in staffing and the high cost and risk of lawsuits in the medical industry, this number makes a lot of sense so that one big lawsuit can’t put a company under. A profit margin under 15%-20% indicates a high risk of negative market changes. 20% is fair.

Why can’t travelers know the bill rate?

Here are common reasons I hear:

  • “We sign non-disclosers with MSPs and are not allowed to share.”
  • “Travelers are not business people. They will hear the high bill rate numbers and not understand everything it takes to run this kind of company and think it is unfair.”
  • “It takes a long time to explain this complex subject to travelers.”
  • “It’s none of their business. Their business is learning what we are willing and able to pay them, but they don’t need to know the exact profits we are making. That is not how business works.”
  • “They don’t understand all the complexities in our contracts, like how we don’t get paid for orientation or that our malpractice price keeps going up.”

Laura’s thoughts

  • It really is true that contracts have non-disclosures and agencies can’t always share the bill rate number with travelers.
  • Instead of worrying about bill rates learn to read your pay packages and how to get high offers.
    Always calculate your true blended rate and not focus too much on just one part of your pay.
  • Also, keep in mind the benefits you need, like health insurance prices per week. This can impact your take-home pay a lot.
  • Overtime rates and extra shift bonuses can matter a lot if you like to pick up extra shifts.
    Compare your blended hourly rate to other company offers and pick the best pay and opportunity for you.
  • When you work with 3 honest recruiters and compare offers between each assignment you are setting yourself up for fair pay every time!
  • Use this fair pay calculator to help you negotiate.
  • If you don’t have 3 recruiters you love and trust yet use Nomadicare’s honest recruiter custom matching.

Cheers to fair pay!

Laura Latimer

Laura Latimer

Founder of Nomadicare

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