Interest in MSO is surging as the complexity of the market grows and as health systems work to define how to help independent physicians cope with that market. Traditionally, HSG has advised clients that MSOs created more risk than reward, but that balance may have shifted.

Client hospitals are expressing renewed interest because:

  1. MACRA/MIPS create complexity that small to medium sized practices will find difficult to manage. Understanding the regulations is one level, but on a deeper level having the management depth and time to implement the processes required is a challenge. An MSO could help with education, and provide assessments which define the gaps and opportunities within individual practices. HSG has developed a participation readiness assessment tool to assist with this process.
  2. Contracting with insurers has traditionally been a role that some MSOs provided, and more often IPAs provided. In the era when payments are at greater risk, skill in contracting has never been more useful. Providing that resource through an MSO is one option. (As a side note, HSG is seeing IPA interest in MSOs grow as well)
  3. Be the nucleus for Population Health or Clinical Integration through the use of MSO services. The MSO can supply the practices with the needed analytic services and expertise that don’t exist today.
  4. EHR complexities continue to stretch independent practices. Sharing the hospital’s EHR and associated support can be a positive.
  5. As complexity grows, the educational needs of independent practice managers will grow as well. We see clients developing resources to help address this gap, in the form of quarterly half-day programs to address trends, core skills the practice managers need, and gaps that the managers themselves define. HSG can help with that curriculum and its delivery.

Many health systems have the resources to provide these MSO services. The management of the employed physician group is grappling with the same issues. Additionally, all employed groups seem to be concerned about how they interact with private doctors, and this is one mechanism to be helpful.

Traditionally, HSG has cautioned health systems about MSOs. We have seen too many disasters where systems got involved in physician revenue cycle, and were unable to fix it. At that point, the hospital owns the doctor’s revenue shortfall, not a position you want to be in.

But there are other, worthwhile issues, the health system can help with. Given the value private physicians bring to hospitals, it is likely worth a reevaluation.

Neal D. Barker

Partner and Managing Director, Compensation and Compliance