To MSO or not to MSO – is the answer in the data?

A virtual raising of hands: How many caregivers love the administration side of your healthcare organization? Do you love doing the accounting, finance and regulatory compliance? How about identifying growth opportunities, potential threats and ways to make the practice run more efficiently? Physician’s Outlook may have put it best in a 2020 article, when they wrote,

“Medicine is a profession. Health care is a business.”

Most caregivers we speak with prefer to focus on delivering the best care possible, not the business of healthcare. However, they do want their organizations perform well, and ensure their financial futures. Hence the opportunity for an MSO or Managed Service Organization. Built to handle the business side of healthcare, MSOs provide the administrative support to caregivers; from paying the bills and scheduling appointments to looking after the financial success of the practice.

While there are certainly pros and cons to this, we continue to see more and more MSOs as part of our healthcare family at Sage Intacct. These come in many sizes and flavors, and include physician, dental, veterinary, physical therapy, and optometry practices–to name a few. However, there is one commonality that we see across all; the need to access, consume and understand the business data. Not just the financial, but statistical, clinical, and regulatory data. This allows the MSO to understand the true health of the practice and make the necessary adjustments to ensure success. And because the MSO is doing this for many like practices, they can look across the entirety of their portfolio and create benchmarks and key indicators of success.

For example, some of the top key performance indicators (KPIs) MSOs are tracking include:

• Revenue Per Clinician
• Revenue Per Treatment
• Number of Patients Served
• P&L by Location
• P&L vs Actual Budget

Just as importantly, the MSO will look at costs and how to allocate them across their portfolio. Dynamic allocations allow the MSO to capture true business performance due to costs and revenue sources that aren’t directly controllable or traceable to important drivers of the practice. This includes allocating indirect costs or revenue across departments, clinic locations, products, projects, funds, or other critical dimensions. A great example of this is allocating corporate expenses across locations–could be based on the number of doctors or staff at each site and take into account the size of each location.

The MSO will also use the data to create economies of scale. Cope Health Solutions talks about this in a blog on MSOs,

“Centralization of administrative and management functions across an enterprise increases efficiency and standardizes services while creating an economy of scale on a per member, per month (PMPM) basis. By creating economies of scale, a MSO incentivizes the health system to seek partnerships that will increase membership and reduce PMPM administration costs.”

So if you are thinking about going the route of an MSO–or you are an MSO looking to up your game–the answer could very well be your data.