Are you searching for information on how an MSO works with a healthcare entity?  An MSO or Management Services Organization is a legal and ethical strategy for streamlining supporting services and facilities for your healthcare practice or medical entity.  It provides the ability to explore new opportunities for reducing costs and increasing profitability during one of the most challenging periods in recent history.  There are risks for licensed medical practitioners and it is important to understand those risks and develop strategies to reduce or eliminate exposure.

The MSO allows medical professionals to draw upon the broad base of available investment capital searching for entry into the healthcare industry.  It also allows medical practitioners to partner with business operations experts who can provide streamlined operations to reduce cost and increase profits.  As long as there is clear line: Here in California, our laws require at least one licensed physician (or a group of licensed medical professionals) to hold the majority interest in any healthcare or medical entity.  In an MSO, non-licensed partners can hold a minority or majority investment position providing a sound legal and business strategy for connecting medical and financial related interests.

An MSO works with a healthcare entity in many ways.  One of the most common is for the Management Services Organization to acquire facilities and lease them back to the medical practice or healthcare entity.  The MSO can manage many types of contracts with vendors and those who might distribute products of the firm.  Electronic data systems, furniture and equipment can be provided in a cost-effective manner.  In addition, mundane and often expensive overhead expenses such as billing, collections, tax compliance and governance can be consolidated more efficiently and cost effectively in the MSO.

An MSO works with a healthcare entity by modernizing the business practices and supportive services and streamlining expenses.  It provides integrated services which ultimately should allow an entity to provide better healthcare services to its patients, improve the “experience” of the patient with the facility and it’s providers while reducing overhead and improving profitability.

Pro-Tip: “Consider an MSO like your administrator for your business. But if you’re in the healthcare business, your administrator can’t do it all. It’s complicated. And there are actual schools that can take people to learn some of the things that your administrator’s supposed to do, like coding, like billing, like compliance, like HR, like leasing, like software programs. So many things that you have to deal with so many more clients, patients, you have to do so much that MSOs are a good option. Also, you can get non-doctors to partner with you and invest in your company to make you more profitable while you focus on being a doctor.

Some of your biggest organizations in the United States are run by MSOs or a combination of MSO and other entities. Sometimes you get so big you have to have individual contracting entities that just do that. Yes, they go out and find you the best pricing, or they’ll work with a multitude of other healthcare practices and do a group location of better pricing and contracts for the doctors.

MSOs are different for every kind of practice. And every kind of practice has a classification under the code as to what they can’t do, who they can’t hire, and who they can practice medicine with, or who can supervise who.  And we do that with various different types of ancillary service organizations, which means like X-ray companies, MRI, PT, physical therapy, imaging, all those things that you run your business with and the rules on how you can and cannot work with them, those can be covered with your MSO.” – Dan Watkins, Founding Partner

Would you like to learn more? The Watkins Firm has served San Diego’s medical and healthcare community for more than four decades. We invite you to review our podcast Episode 30 – Management Services Organizations as well as the strong recommendations of our clients and contact the Watkins Firm or call 858-535-1511 for a complimentary consultation today.