Published - August 1998

By Dave Jakielo


This month I want to spend some time talking about MSO's, more commonly know as Medical Service Organizations. However, before I get into these newer phenomena I'd like to invite one and all to visit my new web site. Yeah, Jakielo is finally catching up to the nineties. It can be accessed at comments and feedback are always appreciated and welcomed.

Well back to our story. What is an MSO? I don't know an exact definition because something that I'll relate to you that may, or may, not be a surprise is:

When you've seen one MSO, you've seen one MSO.

I know people take liberty with the English language and have given new meaning to common words but this MSO term gets batted about like baseballs off of Mark McGwire's bat.

Regardless of what people mean when they mutter MSO, I'd like to offer my viewpoint because no matter how it is used or abused it means:

M = Multitude of
S = Service
O = Opportunities

A Medical Services Organization is an association of medical groups who come together for any number of reasons. Formation of an MSO could be instigated by a physician group or by a hospital. It could have a multitude of purposes but some of the most common are to:

Gain market share.
Reduce operating costs. e.g. billing
Obtain increased negotiating power with third party payors'.
Expand medical service capabilities.
Better serve the patient population of a given area.
Etc., Etc., Etc...

When the organization comes together it faces new challenges in providing and enhancing services relating to the "Business" aspect of running a practice. They all have had to deal with the normal issues of negotiating managed care agreements, staffing a business office, buying billing hardware and software. Once in a new MSO the needs change.

The simple old "billing" software that could get a claim out the door just won't cut it anymore. The sophistication level changes to now needing information not just data. This challenge just doesn't double or triple it increases exponentially. Also many other practice management services will be required.

Contract negotiations with healthcare providers, insurers, vendors' etc.
Hiring and development of competent billing staffs.
Selections of practice management hardware and software.
Acquisition of office space.

This is where you can come in. Depending on what areas of expertise you now have versus what areas you would like to develop opens a fantastic opportunity to "Grow" quickly or at an alarming rate. Most MSO opportunities will have a minimum revenue range (Meaning what the client pays you) of around 1million annually.

At this point you may be saying, "Where do I find one." However a few words of caution, there are some thing's you must consider before you get what you wish for. Ask yourself these questions:

1. Do I have the capabilities of expanding my staff by 17 employees? This is usually what is needed for a 1 million-dollar client. And if I can find them can I train them?
2. Will my system support the added volume and is it a recurring account number system with line item posting capabilities. This is a must.
3. Will I be able to provide the client with computer terminals in their offices and provide training and support? TIP: Always have them buy their own hardware. When they buy it they respect it.
4. Can I support a multi specialty environment? Learn new coding, sub specialize my patient services area. Because talking on the phone with an office based patient population requires different skills than talking with the hospital associated physicians' patients.

Yes there are additional areas to examine before you jump on the MSO train. However, listed above are some of the most critical. So if you answer no to any of the above questions, don't panic. It just means you have to first develop a plan to solve the above before you go huntin' for bear.

Remember this monthly feature will address topics of interest to you. I really appreciate your input and suggestions. Please send your questions or ideas on topics that you would like addressed, to: Dave Jakielo, Seminars, Training and Consulting, 86 Hall Avenue, Pittsburgh PA 15205. Phone and Fax number 412-921-0976. Email = - I wish you continued success.

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