Management services organization

A management services organization (MSO) is an organization owned by a group of physicians,a physician hospital joint venture or investors in conjunction with physicians. In some cases the hospitals owns the service bureau that sells various management services to medical staff.

MSOs generally provide practice management and administrative support services to individual physicians or small group practices. One purpose of MSOs is to relieve physicians of non-medical business functions so that they can concentrate on the clinical aspects of their practice.

Because MSOs purchase their services as a group instead of individually, they can generally achieve economies of scale. These cost savings may be passed on to physicians, who may use this cost advantage when negotiating with health plans and healthcare purchasers.^[1]

In some cases, MSOs simply provide business services to providers for a fee. In other cases, MSOs purchase the tangible assets, such as buildings, equipment and supplies, of their client physicians and lease these assets back to the physicians. In these situations, the physicians continue to own their own medical records and health plan contracts and continue to practice in their own offices. This arrangement relieves physicians of yet another non-medical aspect of running a practice.

In several case MSO have been able to develop malpractice discounts, discounted equipment leasing, shared staffing and benefits, electronic billing and EMR. In recent situations we have seen the core MSO operate as a "group practice without walls".^[2] The advantage is to develop clinical guidelines and care standards for the practices thereby meeting clinical integration definitions and also being able to harvest a shares savings relationship with third party payers including insurance companies and employers.^[3]

Many of these groups without walls also enter the pharmacy trials business reporting characteristics and outcomes of defined populations of patients in a given specialty.

See also

• Independent practice association
• Integrated delivery system

References

1. ^ Managed Care Contracting Wendy Knight Aspen Publications 1997
2. ^ Advanced IPA Contracting, Direct Contracting William J De Marco 1999
3. ^ Physician Driven Health Plans William De Marco MA CMC 1998