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  1. 1. The Power of Partnership:Doctors and Hospitals Benefit fromManagement Services Organizationsa report by Keith E. Chew, CMPE, Senior ConsultantMcKesson Practice Consulting Solutions, Revenue Management SolutionsAs the day-to-day operation of physician Because the MSO provides an ideal Since hospitals and health systemspractices and ancillary services becomes conduit for implementing an electronic generally have the financial wherewithalincreasingly complex and costly, health record (EHR), hospitals benefit to capitalize development of amanagement services organizations from MSO development by more communitywide EHR, many successful(MSO) are emerging as ideal vehicles effectively aligning with the local MSOs are anchored by a hospital.for addressing the needs of physician provider community and improving However, physician groups also aregroups, other service providers and continuity and quality of care. establishing MSOs. Regardless of whetherhospitals alike. the entity is organized by physicians The EHR Platform or a hospital, MSO participation canMSOs are partnerships that offer a range The emergence of the EHR has been include other community healthof support services to independent a primary catalyst behind the current organizations, such as imaging centers,physician and ancillary service provider interest in MSOs. Unlike stand-alone, physical therapy centers, rehab facilities,groups. MSOs frequently include a hospital-based EHRs developed in ambulatory surgery centers and ownership interest and are isolation, EHRs implemented within Ownership typically will reflect the capitaldesigned to assist providers with basic the framework of the MSO are more contributions of the functions like purchasing, likely to generate the critical mass ofequipment leasing, contracting and participation necessary to succeedhuman resources. They can also deliver because providers will be attracted tomission-critical services such as billing both the MSO-based EHR’s connectivityand regulatory compliance. and its support services.
  2. 2. An Array of Services Similarly, state-of-the-art revenue in attracting physicians to align withIn the past, some hospital-driven MSOs cycle management practices, rigorous the hospital. The sharing of protectedhave fallen short of their potential by compliance programs and experienced health information that would occur ismandating the services that participating managed care contracting may simply only possible by adhering to the Healthproviders were required to use as be beyond the reach of the small- to Insurance Portability and Accountabilityparticipants of the MSO. Increasingly, medium-sized practice except through Act (HIPAA) requirements. However, thishowever, MSOs are being structured an MSO or an expensive consulting adherence is not problematic under anto provide member groups with full arrangement. MSO structure.flexibility in selecting only those servicesthey need or desire. This à la carte MSOs frequently contract with Meeting the Challenges ofapproach allows independent provider outsourced medical management Today’s Marketgroups to choose from a range of companies capable of providing the For smaller provider groups, theofferings, including: heavy lifting required to operate the challenges of operating a successful entity on a day-to-day basis. National practice continue to mount. From- Billing and accounts receivable vendors often can deliver a depth of growing regulatory requirements and management resources and experience generally not aggressive enforcement to flat or falling available with smaller, local firms. reimbursements and rising expenses,- Human resources/personnel management many groups are being squeezed as The Power of Many never before.- Equipment leasing and maintenance By bringing the weight of multiple- Purchasing practices to vendor negotiations, MSOs Fortunately, MSOs can serve as a are in a position to save groups money critical lifeline for practices in today’s- Regulatory compliance on everything from medical supplies to tumultuous market. MSOs not only- Financial management equipment leasing. Some MSOs also are help control costs, boost revenue,- Managed care contracting authorized to negotiate and contract improve quality and reduce regulatory with managed care companies on behalf risk but also allow providers to focus- Services contracting of their participating provider groups. their limited time and energy less on- Information technology The collective marketshare can provide routine business matters and more on- Accounting and payroll the MSO with the muscle to win higher the services they are best equipped to reimbursements for their member provide — the delivery of patient care.- Strategic planning provider groups.- Management Provider groups also benefit fromThe aggregation of these services access to a robust EHR system. Throughunder the MSO umbrella gives provider connectivity with referring physicians,practices access to resources and independent laboratories, the hospitalexpertise they might not otherwise be and other providers, the physicianable to afford. For example, a small group is in a position to more effectivelyphysician group likely wouldn’t be able manage and provide patient hire a full-time practice manager Likewise, for the hospital, the continuitywith a master’s degree in health services of care that the EHR system producesadministration. But through the MSO not only boosts the hospital’s publicstructure, that capability is readily standing from a quality standpoint, butavailable on a part-time or full-time can also serve as a key differentiatorvirtual basis. McKesson Provider Technologies 5995 Windward Pkwy. Alpharetta, GA 30005 1.800.981.8601 Copyright © 2008 McKesson Corporation. All rights reserved. All company or product names mentioned may be trademarks, service marks or registered trademarks of their respective companies. WHT274-05/08