This blog post is the first of a four-part series that highlights ECG’s perspective on implementing, growing, and optimizing management services organizations (MSOs) to generate the most value for providers, investors, and the community at large.
- As the investment in physician practices continues to heat up, it is imperative for healthcare organizations to develop an alignment model that provides value and best-in-class support to patients and providers. Health systems and corporate entities such as health plans and private equity firms are increasingly seeking alignment with physician groups and practices with the goal of broadening referral networks, growing practices, and capturing increased direct or downstream revenues. Regardless of the type of organization seeking alignment with providers, an MSO can provide a mutually beneficial financial and operational collaboration tool.
- Successful MSOs need to be more than a third-party transactional relationship. Instead, the MSO needs to build upon a strategic foundation with clearly aligned objectives and goals. To really generate value, MSOs must enhance the capabilities of the practices and provide a vehicle for improved coordination among the MSO member practices through successfully coordinating care, using advanced analytics, and maximizing the upside of value-based care arrangements.
- Strategically implemented MSOs can enhance collective value. Creating or choosing to work with an MSO simply to reduce costs for short-term margin improvements is a narrow way of thinking. While there are cost savings from economies of scale, truly successful MSOs focus on revenue generation. Volume growth through improved patient access, revenue capture improvement, expanded clinical services and programs, and increased support of value-based care programs can promote operational and financial growth for all parties.
- The benefits of a well-orchestrated MSO model extend beyond financial performance to quality of care and the patient experience. With the right investments and as the MSO expands its client base of practices, economies of scale allow the network to access more advanced technologies and expertise that help support quality and access improvements. Additionally, depending on the members of the MSO, there can be greater collaboration among primary care providers and specialists. The MSO must become the platform that unlocks value and financial and strategic options to all parties.
Published June 22, 2022
