Hundreds of management service organizations debuted in recent years. Already, some of them are coming apart at the seams.
That has brought a new mission to Health Capital Consultants, a St. Louis-based consulting firm that has developed more than 35 MSOs.
"We have been doing a lot more remedial work over the past couple years, where we keep them together or patch them back up," says Robert J. Cimasi, the firm's president.
Health Capital is known as a hospital valuation firm, but physician integration strategies have grown to 40% of its business, Cimasi says.
Cimasi promises a shoot-from-the-hip discussion on the problems of MSOs in his talk titled "Anatomy of a Management Service Organization Gone Wrong." It will be presented on Tuesday, March 4, from 2 p.m. to 5 p.m.
He will describe the problems of an MSO and present ideas on how they could have been prevented. Typically, MSOs have been established and jointly owned by hospitals and physicians. They provide a wide and varying range of services, such as information systems, to networks of physicians who contract as a unit.
An MSO's process is its product, Cimasi says, and often the toughest task is establishing clear procedures.
Aside from the operational issues, MSOs often fall short in education and communication, he says. Hospitals tend to oversell MSOs, and physicians end up disappointed. Also, education, particularly regarding capitation, "has to constantly be pushed," he says.
Finally, MSOs have to instill a sense of mission. "If the group itself isn't sure about why they're together, it's going to hinder their ability to survive in the marketplace," Cimasi says.
More and more MSOs are being developed by physicians as an alternative to selling their practices to hospitals or physician practice management companies. Physicians believe running their own MSOs will let them keep autonomy, Cimasi says. The doctors also are concerned about how they will be perceived if they affiliate with a Wall Street-financed company.
In some cases, he says, hospitals offer financial and management assistance in the hope that it will lead to future ties.
Physicians' expectations are often dashed because they're not used to running themselves as an integrated business. "To have leverage in the marketplace, they have to give up a little autonomy," Cimasi says.