What Exactly Is A Management Services Organization?
Growing and managing an independent medical practice is becoming harder with every passing day because of growing competition with health systems, the administrative burdens of constantly changing regulations, complex value-based care programs, compliance requirements that comes with big fines, and staff turnover.
The COVID-19 pandemic made things even more difficult, especially with stringent regulations put in place and workforce burnout. In the wake of this global calamity, many practice owners have either resorted to becoming hospital employees or selling their practices to a private equity company.
Innovative, forward-thinking physicians want to create modern medical practices that attract patients, payers, employers, and employees. At TRIARQ Health, we believe that independent healthcare providers should be able to grow and thrive – while also staying independent. Achieving this vision is possible through a partnership with the right Management Services Organization (MSO) which invests resources and expertise into independent medical practices to help them grow while enabling the physicians to focus on providing the highest quality patient care. In this post, we will discuss what Management Services Organizations are and why they are important.
Administrative Challenges in a Medical Practice
Medical practices, like other businesses, face a host of administrative challenges that can be difficult to manage while also handling the demanding task of providing top-notch healthcare. Management Services Organizations can provide scale and expertise otherwise unavailable to independent practices to help them:
- Grow Their Practice: Patients are consumers, and they have choices. The right MSO partner invests in their practice partners and brings the expertise required to build a modern, medical practice that is attractive to patients, employers, and payers.
- Negotiate and Manage Value Based Arrangements: Value-based care programs are growing in number and complexity every year. The practices that are prepared and ready to embrace them will grow stronger while those who do not, will fall further behind.
- Innovation: While medical technology and treatments have expanded dramatically over the last 50 years, the in-office experience is essentially the same. Successful practices always look for opportunities to try new things to improve the patient experience.
- Expert Revenue Cycle Management: Achieving the best financial results takes an expert partner with a large, highly experienced team working with a cutting edge technology platform.
- Collecting From Patients: It can be a hassle to chase patients for money and patients expect convenient, intuitive payment tools. Most Independent Practices do not have the resources to develop their own system and it can consume a great deal of valuable staff time to do the grunt work.
- Human Resource Management: Employees directly reflect the quality of a practice and have a significant impact on the patients’ experience. Recruiting, managing, and developing great employees requires and knowledgeable team that can bring focus and expertise. The right MSO partner brings professional human resource management and recruitment capabilities that attracts and manages a high-quality team.
- Ordering Medical Supplies: A medical practice needs medical supplies. These include vaccines, syringes, gloves, and bandages. Ordering medical equipment on a timely basis becomes challenging, though, especially when waiting for new deliveries.
- Analyzing Medical Data: With new payment models in place, medical practices now must manage and analyze medical data on a large scale. Small, Independent Medical Practices do not have the expertise or technology to handle this on their own.
Dealing With Administrative Challenges in a Medical Practice
Independent practice owners can take the following steps to deal with the administrative burden.
Join a Hospital System
Joining a hospital system allows medical practices to focus on patient care.
On the plus side, healthcare providers do not have to manage administrative tasks. On the other hand, there is no sense of control because the parent organization (the hospital system) owns everything.
Moreover, the cost of patient care also increases, since treating patients is more expensive in a hospital setting, where so many extra people must be paid, and more resources are consumed compared to a private practice.
Selling Practice to a Private Equity Firm
Again, the major benefit of this move is relief from administrative burden, but at the same time, healthcare providers end up losing control over everything.
More importantly, the conversion of patient care into a financial game comes with its own set of problems, not the least of which is a sense of guilt and unfulfillment.
Partner With a Management Services Organization
An MSO is by far the best way for medical practices to deal with administrative challenges.
An MSO is a company that offers a wide range of services to help manage medical practices. These may include accounting, human resources, billing and collections, administration, information technology management, and more.
Using the services of an MSO allows independent practice owners to focus on their primary objective: providing outstanding patient care. There is also a reduction in operational costs since healthcare providers do not have to pay for certain services or can benefit from economies of scale since the MSO is helping many practices with similar tasks.
How Can Medical Practices Work With an MSO?
Depending on the scope and preferences of the medical practice, there are two types of MSO arrangements they can benefit from:
Share in Equity
Medical practices can give MSOs a share of equity in exchange for their services. Doing so allows owners to retain control over decision-making while reducing their administrative burden to a significant extent.
There are also arrangements where an MSO can provides employees for medical practices, allowing the physicians to focus on patient care without hiring additional staff members.
Flat Service Fee or Share of Revenue
Medical practice owners who are not ready to give an organization a share in their ownership can pay a flat service fee or a fixed percentage of revenue to an MSO. In this case, all assets and operations ownership remain with the medical practice owner, even as they enjoy a reduced daily administrative burden.
In either arrangement, an MSO provides clients with outsourced services like:
- Accounting: An MSO can provide medical practices with regular monthly, quarterly, and/or annual financial statements to ensure timely updates on the progress of operations.
- Billing Services: One of the most vital parts of running a medical practice is collecting from insurance payers and patients. Fortunately, an MSO that provides billing services with greater efficiency, freeing up more attention and resources for healthcare providers.
- Human Resources Management: An MSO that manages HR tasks takes the responsibility for hiring qualified staff members and provides them with regular training. This ensures that patient care is not compromised even if medical practices do not have time to hire or train their own staff.
An MSO does not just provide medical practices with accounting and HR support. It also helps them provide effective patient care.
For instance, if a practice owner is having trouble with patient retention rates, an MSO can provide them with services that help streamline communication between healthcare providers and patients.
This is done by offering medical practices with patient communication tools, newsletters, payment plans, etc., which are essential for preventing patients from canceling appointments.
In summary, an MSO can make staff management and patient care much easier for medical practices by relieving them of many administrative duties.
An MSO, like TRIARQ Health, provides management services, like billing, credentialing, human resources, IT, and more. Thus, it gives healthcare providers the best of both worlds, allowing them to own their own practice without worrying about extensive administrative tasks.