What is an MSO?
Medical practices often use MSOs to support them with administrative duties and managing the practice’s infrastructure. By delegating these non-clinical responsibilities to MSOs, practices can focus more on providing quality patient care.
What is the purpose of an MSO?
MSOs do not typically deal with any medical-related tasks, but they can help with your business infrastructure, technology and related components that are essential to running your business smoothly. Their primary goal is the smooth running of patient services, improving patient safety and creating a centralized hub for medical safety and compliance expertise.
Services an MSO offers
The specific tasks the MSO handles can vary based on your needs, such as:
- Human resources
- Payroll services
- Benefits
- Financial management
- Education and training programs
- Billing and collections
- Compliance
- Risk management
- Contract management
- Patient care coordination
- Technology and IT services
- Office space and equipment leasing management
Benefits of using an MSO in healthcare
When considering an MSO in healthcare, consider the benefits, including:
- Time savings: By delegating administrative tasks, your staff can focus on providing the best possible patient care.
- Access to experience: An MSO gives you access to experts in administration, which can improve your processes.
- Improved patient care: The goal of working with an MSO is to improve patient care by letting your staff physicians focus more on the clinical side. The MSO can also suggest ways to streamline your practice and offer additional options for patients.
- Money savings: MSOs are often large corporations that have better buying power than a small practice, which can save you money.
- Maintain independence: While an MSO can often be considered a form of merger or acquisition, small medical practices may be able to maintain independence.
Best practices for using an MSO
To get the most out of your MSO, consider the following best practices:
- Read the contract. Review the agreement fully, so you understand what its terms and conditions would entail for your business. The contract should specify the services the MSO will provide and all terms of the arrangement.
- Consider your exit options. In case you wish to exit the MSO arrangement, learn about any exit options available to you, such as succession planning or transferring ownership.
- Set boundaries. Ensure you and the MSO agree on what constitutes medical or clinical activities, since the medical practice remains solely responsible for these.
MSO structures
Different MSO structures typically support different business needs, such as operational efficiency, legal compliance, risk mitigation and financial flexibility. There are a few different structures that could meet your requirements:
- Traditional practice sale: This model involves selling your practice to a buyer, which means that you can focus solely on providing clinical care rather than managing medical business operations. You then become their employee and they handle all aspects of running the practice. If you lose all ownership in the deal, you might be subject to the MSO’s decisions on your hours, vacation time, benefits and other details, just like any employee.
- Joint venture model: This model involves selling 60% to 90% of your practice to a buyer, but while maintaining equity. One of the benefits is that this model allows for financial growth as a business while you guide the direction of the business. Like with the traditional practice sale model, you also become the larger organization’s employee.
- Equity roll: Like a traditional practice sale, this involves selling 100% of your business; however, you retain some equity.
