The steps to creating an MSO are rather straightforward.  However, while they are easily described, the simplicity of the structure can be deceiving.  Developing the MSO takes a great deal of hard work, planning and communication.  It should be developed by experienced teams who are comfortable and effective in implementing successful physician practice management services.
The following steps may be helpful.

  1. Review the medical staff development plan to ensure that it is up to date and functional.  It is important to construct MSO programs which complement rather than compete with other efforts. If this is a private physician initiative, the membership and proposed customer base should be the focus of the analysis.

  2. Relate the medical staff planning function to a financial payback or cost\benefit analysis. Expenditures are going to be required, there must be a payback for any new initiative that is going to sustain the health care system’s support through trying and competitive times.

  3. Perform an assessment of the services available to physcians in your local community, both from the health care system and from the marketplace.  In all likelihood, physicians know what is available and you must also before initiating a competitive program.

  4. Develop a short list of likely customers (candidates for both service provision and board participation).  These potential customers must be successful players (not candidates for a rescue mission).  The practitioner must be one whose practice is relatively stable and one which contributes to the goals of the institution or the overall group.

  5. Develop a listing of resources and services that the MSO might provide, hopefully those which the group can launch with an efficient and effective startup.  They should have universal appeal and they should have a financial impact on the practice.  They should be well defined (billing, collection, personnel management) rather than generic (education, coordination, consulting).

  6. Develop a pro forma which capitalizes the business and initiates the core services at a cost recapture level.  The board of consumer physicians will monitor the process.

  7. Plan initial meetings to prioritize activities, address membership and customer issues, plan for intermediate and longer range services, fine tune governance and qualify additional activities.  The goal is to allow the initial group to succeed and build a base of services which can attract other practitioners through an obviously successful track record.

  8. As mentioned earlier, the MSO model is not the only option to physician integration, but it is an important transitional structure which can be used effectively in developing medical staff relationships.  While many people may claim to know where the industry is going (i.e. group practices and the community coordinated models), few can figure out the most effective way to get there.  This stage offers one step which will help to build inter-relationships between providers and at the same time put potential competitors into a collaborative model which can then be used to develop a stronger business partnership.
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