Ask medical professionals what motivated them to enter the world of medicine and most will probably talk about their deep desire to help others, their fascination with scientific breakthroughs perhaps, or often the fulfillment they find from the human connections that are created between professionals and patients.

What nobody ever hails as a reason for choosing the physician’s life is a love of coding and billing, of working with collection services, accounting, payroll and numerous other business management tasks.

Throw in the fact that often many of these necessary non-medical jobs are outsourced to several different contractors at a variety of locations and it’s blatantly clear that the complexities of running a medical practice as a successful business take time and energy away from bringing medical aid and care to people who most need it.

And that’s where (the rise in utilization of an) MSO or Management Services Organization comes into the picture. It’s essentially a one-stop shop for all those business needs of a growing medical practice, from human resources and accounting to payroll to business technology and purchasing equipment and services.

MSO’s, like LBMC’s Single Source, can offer scalable services such as Accounting, Human Resource Outsourcing/ PEO (Professional Employer Organization), Technology Solutions, and Revenue Cycle Services.

Efficient healthcare revenue cycle management is key to the success of any practice. Essentially, this encompasses the management of all the financial processes (administrative and clinical) that practices use to manage the administrative and clinical functions from claims processing, payment, and revenue generation to the collection of patient service revenue. If this system isn’t working correctly, practices close their doors. It’s as simple as that.

Nationally respected healthcare veteran Andrew McDonald heads up LBMC’s Physician Business Solutions. McDonald recently explained at an Executive Roundtable discussion alongside LBMC colleagues Tammy Wolcott and Ron Perry how LBMC manages revenue cycle management within an integrated management services organization. The recording of the discussion is available as an LBMC podcast

Benefits from a one-stop shop

McDonald’s department, he explains in the podcast, ‘primarily focuses on the revenue cycle piece…we provide an I.T. solution that is Cloud based, on a percentage of collections type arrangement.”

The cloud-based technology is cutting edge and solves countless software issues, but McDonald sees the integration of services as key to the success for practices who benefit from a one-stop shop system. All the data from the revenue cycle, he explains, feeds automatically to the finance and accounting divisions. The benefit? McDonald explains it simply. “Instead of running 12 months’ worth of reports and handing that big stack to your accountant to have some idea about how we did this year, we’re offering real time information.”

Efficiencies using same systems

According to Tammy Wolcott Chief Executive Officer, LBMC W Squared LLC, there are many benefits from finance and accounting services being housed under the same roof and within the same set of systems as revenue cycle management.

“So, along with the system that Andrew’s using,” Tammy explains, “we use Sage Intacct so we can integrate the systems and make it a real time monthly trended financials. We use fractional resources, so we’re able to not just use a single book-keeper, which is typically what you see in a physician office. We use a fraction of a CFO, fraction of a controller, fraction of an AP clerk, so that we’re sure that you’re getting the services at an expert level, but only in the share that you need them.

This brings highly qualified financial expertise at a lower price for the practice. Costs come down with the ability to aggregate. As Tammy explains it, “if you spend $1 million, you qualify for a certain percentage discount with the GPO for that item. If you spend $1 million and I spend $1 million together, our $2 million qualifies us for a higher discount and we both get to recognize that discount.”

The Power of Many

The other key piece in an MSO offering is Human Resources. Ron Perry, founding partner of LBMC Employment Partners, LLC, sees a key benefit in systems integration within an MSO. “Our payroll system is totally integrated with Intacct, which is what Tammy uses in her group for those practices,” he says.

Being a part of a PEO (professional employer organization) is one area where the one-stop shop model really comes into its own. There’s no more need to hire a broker and a payroll company and an H.R. company and someone else to work on Workers’ Comp. When a practice works with an MSO, a variety of costs drop. Workman’s Comp goes down and the cost of employee benefits also drops significantly.

The financial power of aggregating is especially powerful when it comes to H.R. Ron Perry explains this succinctly in the podcast, “As opposed to Dr. Smith and Dr. Jones and four staff and 10 employees total, we go to the marketplace as a group of 3,500. The scale is there for not only employee benefits, but for life insurance, long and short-term disability insurance, Workers’ Compensation insurance, employment practices liability insurance, all of those things and then everything that has to do with HR compliance.”

Looking ahead to 2020, we anticipate a continued escalation in the popularity of MSO’s adoption across the nation as physicians find ways to better manage the financial components of their practice.

Concerned about switching to an MSO system? Don’t be. Many companies like LBMC have plenty of experience in transitioning businesses and have a dedicated implementation team who take time to understand the uniqueness of every practice. As Tammy Wolcott says, “successful businesses breed successful businesses. I think we have seen a lot of successful businesses between the groups here at LBMC. We know what those look like so we can help physician practices find that magic piece that maybe they were missing.”