Management Services Organizations: How They Work, and Why Healthcare Practices Use Them

Running a healthcare practice entirely on your own can be extremely burdensome. You may prefer to focus on patient care but feel strained by the administrative tasks that make up your daily workload.

Many medical practices have begun turning to management services organizations (MSOs) to take some of the load off their practice management. These entities centralize administrative and operational functions to support your practice’s efficiency and patient outcomes.

Learn more about MSOs, then explore Weave’s communication platform as an alternative approach to streamlining operations.

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What are management services organizations (MSOs)?

Management services organizations are third-party entities that handle administrative services and practice management for healthcare providers. Outsourcing these tasks allows providers to focus entirely on patient care services.

MSOs may handle any of these non-clinical administrative services:

• Billing and revenue cycle management
• Human resources
• Information technology (IT)
• Compliance with federal and state regulations
• Facility operations
• Marketing

These entities also provide flexibility in the types of operations they handle. Your practice can pick and choose which services to delegate to the MSO while retaining in-house oversight of other services.

Running a modern healthcare practice requires attention to a range of operational tasks beyond patient care. With an MSO, you can better manage these services and spend more time on healthcare.

Why management services organizations are important in healthcare

A recent shift toward value-based care, replacing the traditional fee-for-service model, has left many practices in the healthcare industry seeking ways to improve the patient experience. There has also been a trend toward population health management, which seeks to improve clinical outcomes at the community level rather than just the individual level.

These shifts require providers to spend ample time to spend on patient care. But the increasing complexity of healthcare operations means that running a practice is a balancing act that includes a range of non-clinical administrative functions.

MSOs help healthcare providers manage these operational tasks so they can better meet their healthcare goals.

How a management services organization works

MSOs partner with healthcare providers or health systems to provide centralized management of administrative and operational functions. The services they offer can be customized based on the organization’s needs.

MSO partnerships also follow specific governance structures to comply with strict corporate practice of medicine laws.

Core functions of an MSO

Management services organizations can provide administrative services such as billing, HR, IT support, and marketing for healthcare practices. The providers retain control of clinical services, while the MSO handles select non-clinical functions. This ultimately improves practice efficiency and gives providers more time to focus on patient care.

MSO governance and structure

Corporate practice of medicine laws often require that healthcare practices be owned and operated by licensed medical professionals rather than corporate entities. As a result, ensuring the proper MSO structure is important for maintaining compliance.

When a healthcare practice partners with an MSO, the practice is usually divided into two distinct entities. The Professional Corporation (PC) is the clinical entity owned by licensed physicians. The Management Services Organization is the business entity that handles non-clinical functions.

MSO relationships are generally governed by management services agreements (MSAs), which set the terms and conditions of the partnership.

Benefits of a management services organization

Partnering with an MSO offers several benefits for healthcare organizations:

• Improves office efficiency by centralizing and outsourcing non-clinical services
• Enhances healthcare quality and potentially improves clinical outcomes by allowing providers to focus their full attention on the clinical practice
• Supports expansions into a second or third location without administrative burdens
• Allows practices to see more patients each day, improving profitability
• Enhances patient experiences by reducing the wait times that often result from overwhelmed office staff

Challenges and considerations

This healthcare business model also presents a few challenges that you should consider for a balanced perspective:

• Integrating with an MSO can significantly alter your daily operations and may require a learning curve before it feels natural.
• This process requires detailed planning and cost modeling to ensure sustainability.
• You need to ensure that the partnership meets strict compliance requirements.
• Partnering with an MSO requires you to give up autonomy over administrative functions, and the MSO may not handle operations the same way you would.

Be sure to evaluate your infrastructure closely to determine whether the MSO model aligns with your goals.

When should a practice consider an MSO?

You might consider partnering with an MSO if any of the following are true:

• You want to scale operations or manage growth without increasing administrative burdens.
• You prefer to focus more on clinical tasks than on operations.
• You want to legally navigate corporate practice of medicine laws while allowing investors or business owners to “own” the practice.

The role of technology in MSO success

The right technology makes running a healthcare practice simpler, whether or not an MSO manages it. Practices that use integrated communication and workflow systems benefit from greater operational efficiency.

Your practice can look for tools that automate scheduling, reminders, payment processing, and review management to further reduce administrative workloads. These tools can also facilitate consistent communications to improve patient retention and satisfaction.

Improving communication across the organization

Centralized communication systems improve collaboration throughout your practice. When you rely on a single platform for phone calls, texting, emails, and scheduling, your practice can work more efficiently and avoid overlooking conversations.

Turning to systems with automation tools can improve patient communication by sending texts and emails at optimal times.

How Weave supports management services organizations

Weave’s all-in-one platform centralizes communication across teams and locations. Features include two-way texting, scheduling, reminders, payments, and more, all designed to improve patient satisfaction and operational efficiency. Our platform is scalable for MSO operations and multi-location practices, with flexible features to accommodate your facility’s needs.

Build a more efficient and scalable healthcare organization

Management services organizations improve scalability and efficiency in healthcare practices, allowing providers to focus on patient care. If you are looking for other ways to streamline administrative tasks, Weave can help. Request a demo to explore Weave’s capabilities for healthcare providers.