I’ve written a lot about the barriers to entering the OBL world as an IR. One of the biggest hurdles for all of us physicians is the business side of a medical practice. When you are working in a hospital, there is an army of hospital administrators and other non-clinical support staff that will handle the behind the scenes things like scheduling, billing and compliance. Where do you even start with this if you are interested in opening your own shop?
Enter the world of Managerial Services Organizations (MSOs). These entities exist to provide resources and administrative support to practices. Here are specific tasks that an MSO can execute for your practice:
- Design and build-out your office interventional suite
- Implement and manage human resources and payroll systems
- Insurance contracting and credentialing
- Billing and collections
- Revenue management optimization
- Regulatory compliance
- Assist with pricing and provision of medical equipment
- Providing professional support for physicians through network contacts.
Ultimately, the role of an MSO can be characterized into several broad categories:
- Building an OBL and staying in business.
- Managing employees and creating systems for daily workflow.
- Collecting and handling money.
Pricing for MSOs varies depending on the level of service, but in my experience a good full-service MSO for an OBL is generally a low five figure amount monthly. This is usually distinct from a separate billing charge which generally hovers around 4-5% of collections.
While there are some MSOs which will gladly provide a good service at a fair monthly cost, many are now requiring equity stake in your practice, usually 25% or more to make it “worth their time.” This is a nice way of saying that they want to maximize profits as much as possible without having to play an active role in perpetuity. This is how business people think and you need to adopt this mindset to play in this arena.
With all this being said, I’m of the personal belief that you need to hire help to deal with non-clinical aspects of an OBL. Practicing IR is hard enough. Dealing with the administrative and regulatory issues inherent in modern healthcare is unfortunately a full-time job. Whether you do it through a one-stop shop like an MSO or hire out specific non-clinical tasks and roles a la carte, it is important that we as physicians acknowledge our shortcomings. We certainly have the intelligence to deal with this on our own, but it certainly isn’t the best use of our time. We are experts in taking care of patients and that is where our primary focus should be.
Unfortunately, we as physicians have taken the mantra of focusing on patient care a little too far. As a result, we have been reduced to worker-bees who exist to generate revenue for other people to manage. We continue to devalue ourselves and in my opinion make it even harder for our nascent specialty to evolve. Managerial Services Organizations have clearly caught on to the market forces at play and use general healthcare trends to their economic advantage. By giving an MSO keys to ship including significant equity in the practice, they will do what they do best which is running a business. In the business of healthcare, the physician has sadly been reduced to a necessary expense. We are often viewed as replaceable without real acknowledgement of the significance regarding doctor-patient relationships and even doctor-doctor relationships.
I remember when opening our new OBL, my former partner wanted the MSO he hired to figure out a compensation plan for me as a minority partner. A former nurse now working for the MSO on their operations team simply went on Google and typed “interventional radiology salary,” and proceeded to call me to give me the range she thought would be reasonable. She had no idea what she was doing and it was very clear that these organizations really don’t know how to value physicians. I ended up having a higher level conversation with the COO, a CPA by training, who pretty much gave me the skinny on how they view physician compensation making me quickly realize that the goal is to limit compensation in order to maximize profits. The entire process was incredibly informative, but unfortunately made me even more bitter than my usual baseline. My general attitude towards for-profit medicine with lack of physician oversight remains what it is today. I believe it’s a feeling a lot of physicians have and it’s sad because medicine truly is an amazing profession.
What do we do about this? Well, there are different schools of thought. One thought is to just accept it for what it is and work on our individual physician mindset. Maintaining positive attitudes, acknowledging that the work we do is truly a privilege and the only thing we can control is how we take care of patients and each other. I think all these thoughts are helpful, but this mindset bothers me in that it inherently suggests the role of the physician-leader in medicine as a “lost cause.” Another school of thought is to be outspoken and maintain your independence at all costs. I definitely vibe with this, but it’s also short-sighted because it’s nearly impossible for us to exist without non-physician help.
Physicians need to be at the table making decisions for their practice. In order to do so, they must understand the landscape in which they practice and know who the different players are. In the OBL world, this involves understanding basic financial principles and knowing how MSOs make money. I think there are tremendous opportunities for physicians to be involved in MSO leadership. Specifically, there is a great need for physician mentorship and support as more IRs realize that going into the OBL as an entrepreneur (or even intrapreneur for the organizations they currently work for) is a path that allows them to practice in a clinically oriented fashion and reap the financial benefits of their hard work. Specifically this may mean creating protocols for MSOs, training other physicians on new procedures or providing clinical support and being involved in quality initiatives and research endeavors. MSOs need physicians on their teams to provide optimal service and create meaningful relationships.
The role of an IR as an executive is in its infancy as new OBLs continue to come on-line. Market forces will likely promote consolidation of OBLs which creates a greater need for physician leadership roles in organizations involved in the management of OBLs. This process has already played out in the hospital world and there’s a lot we can learn from recent history.
So before you open your OBL, realize that intellectual laziness regarding business and management will cost you significant money and control which will come back to bite you. Take the time to study, ask questions and learn from the experiences of others before making the leap.