Your MSO wouldn’t have acquired that physician group or practice if you didn’t see exciting growth and opportunity ahead.
Once that location starts to grow, your MSO can access new revenue streams, invest in advanced technology, and strengthen your competitive position in the healthcare market – all exciting prospects.
Still, navigating provider growth in today’s uncertain market takes skill, even a mix of both artistic and financial acumen. Perils lie ahead.
Should the acquired provider staff begin to resent new technologies and processes, revenue is at risk. Then, given the capital expenditures (which rarely meet budget) involved, spending must be carefully orchestrated to meet long-term goals. We cover more of these potential trouble spots below.
However, the pros of healthcare organization acquisitions clearly outweigh the cons.
Private-equity-backed MSOs have spent $1 trillion on 8,000 healthcare acquisitions in the last 10 years, and most of these alliances have generated positive changes like location modernization, lower costs, and staff stability. MSOs have kept countless healthcare providers’ doors open.
Consider:
- Struggling St. Francis Medical Center was able to emerge from bankruptcy after its acquisition by Prime Healthcare. Prime invested in the center’s infrastructure, unleashing its MSO on the center’s new EHR and RCM systems. Today, St. Francis is thriving and serving its community efficiently.
- North American Partners in Anesthesia (NAPA) - both a physician group and an MSO – opened its own dedicated MSO arm, NAPA Management Services Corporation (NMSC). NMSC has helped its healthcare organizations consistently achieve a 95%-96% collection rate, amounting to 5%-20% improvements over in-house RCM.
Navigating provider growth carefully ensures you, too, achieve successful partnerships like these.
Usher your practice acquisitions to success with these steps. Demand for healthcare is only rising, surging even. Keep more healthcare organizations open, thriving, and serving when you shepherd your acquisitions through bumpy growth phases. And growth is ahead, you bet.
What is navigating provider growth?
Navigating provider growth is the strategic process of scaling healthcare organizations while maintaining operational efficiency, quality care, and financial stability. This involves integrating newly acquired practices or expanding service lines in a way that aligns with long-term goals and addresses challenges such as regulatory compliance, workforce management, and technology adoption.
Key components of navigating provider growth include:
- Operational integration: Standardizing processes across locations, optimizing workflows, and ensuring seamless technology integration to prevent inefficiencies.
- Regulatory compliance: Adhering to federal and state regulations like HIPAA and Stark Law to mitigate legal risks during expansion.
- Workforce management: Addressing staffing shortages, preventing burnout, and fostering cultural alignment between MSOs and providers.
- Financial optimization: Securing capital for acquisitions, managing costs, and achieving economies of scale to sustain profitability.
- Patient-centric care: Enhancing patient experience through improved access, care coordination, and value-based care initiatives.
Ultimately, successful navigation of provider growth requires a balanced approach that prioritizes both scalability and sustainability while addressing the complexities of the healthcare landscape.
A firm foundation for navigating provider growth
Establish solid operations
Once the agreements are signed, you begin the hard work of aligning your new acquisition’s operations with yours. Make clear, reliable operations the rich soil your practice’s growth springs from.
As we discuss in our MSO Operations post, operational stabilization of the acquisition must take place first so that stable growth can follow. An organization marked by confusion, poor processes, and substandard care won’t develop the reputation that grows naturally in the community. It’s far easier to promote a well-run, high-quality practice or physician group than one known for losing records, billing weeks after treatment, and providing inconsistent or unsatisfactory patient experiences. A strong reputation is built on reliability, efficiency, and exceptional care, all of which are essential for fostering trust and driving organic growth through patient referrals.
As you’re creating your partnership, you must dovetail these operational aspects:
- Legal
- Finance
- HR
- Culture
- Clinical operations
- Administration operations
- Communication
- Revenue cycle management
- Technology
The first task is integrating the new acquisition into your preferred EHR and PMS tools as well as your financial, communications, and RCM platforms. It also includes getting the acquisition to communicate well with your HR, IT, RCM, legal, and financial departments.
Another corner of your growth foundation is the standardization of workflow processes. As such, training will take up much of your initial weeks together. Emphasizing the benefits of these changes to all involved and demonstrating respect for former workflows helps change rollout more smoothly.
Stabilize operations with proactive change management
During the COVID pandemic, so much change occurred so fast, it drove healthcare clinicians and administrators to the exits. An NSCBN study finds that 100,000 nurses left the workforce at that time.
Valerie DeCaro, VP RCM of DOCS Dermatology MSO warns healthcare executives to take care during transitional times. She recently shared with us,
“Change is hard. Getting your groups on board and then motivating them to be successful takes careful planning. The change occurring fuels the high attrition rate.”
Our change management post goes into detail about executing a plan that helps all involved feel more in control and heard once an MSO has become involved. MSO business managers using proactive change management plans keep disruptions manageable, a move that reassures provider staff.
Conversely, ineffective or non-existent change management can create confusion, mistakes, lower staff morale, and pushback against new processes, ultimately impacting the quality of patient care. In extreme cases, it may lead to operational breakdowns and jeopardize patient safety. Implementing a strategic approach to change management is essential for healthcare organizations.
It’s good to know that getting and keeping provider stakeholders on your side is straightforward.
A study based on interviews with 30 healthcare professionals found that successful organizational changes in healthcare occur when those involved:
- Understand and align with the purpose and value of the change. This means you’ll need to share values, vision, and goals early.
- Get the opportunity to implement the change gradually and systematically.
- Have a chance to contribute to or even initiate the change themselves. Set up communication channels that enable them to participate.
- Feel adequately prepared to adapt to the change. Let them know what’s coming early.
- Clearly recognize the benefits of the change, particularly its positive impact on patient care.
These few extra steps help clear the runway to growth.
Transition to the cloud during stabilization
MSOs are often scooping up smaller organizations that are still using on-premise servers. These servers impede your MSO’s data management, compliance, and – most importantly – growth. The answer here is a shift of all data to the cloud.
While local servers may reduce exposure to external breaches, they often introduce delays in data extraction and integration, which can hinder decision-making and performance tracking. Organizations need a strategic approach to align systems, enhance security, and enable real-time data access and analysis.
Cloud-based systems provide the best solution for tackling cybersecurity and data management. Cloud solutions offer superior visibility, control, and security compared to on-premise servers. However, transitioning to the cloud demands careful planning to ensure compliance and safeguard sensitive information. When implemented correctly, cloud systems can boost efficiency but must be paired with robust cybersecurity measures to mitigate potential risks.
Avoid these stabilization-phase growth killers
Avoid these missteps as you begin your journey with your new acquisition.
- Poor Communication: Ineffective communication can result in misunderstandings, confusion, and difficulty gaining stakeholder support. Leaders must consistently articulate the importance and purpose of the change, ensuring that everyone understands the "why" behind the transformation to foster alignment and engagement.
- Weak Leadership: A lack of strong, visible leadership can undermine the change management process, leaving employees without clear direction or motivation. Effective MSO business managers should remain actively involved, clearly defining the scope of the change, its rationale, and its impact on both staff and patients.
- Overwhelming Change: In healthcare organizations, simultaneous changes can lead to change fatigue, causing disengagement, burnout, and resistance among employees. To mitigate this, leaders should carefully manage the pace of change and ensure individuals can adapt effectively to new initiatives.
By steering clear of these common pitfalls, your organization will be better positioned to navigate the complexities of transformation and achieve long-term growth.
Navigating provider growth opportunities and challenges
With IT, HR, RCM, and more departments buttoned up, the practice is ready to scale. Now you can shift your focus away from managing operations to adding additional services, driving revenue growth.
When healthcare organizations experience rapid growth, they face a mix of challenges and opportunities across staffing, capital, and operations. Watch for these challenges, and be ready with the solutions that address them.
Staffing
Rapid expansion pressures the existing workforce. Burnout among healthcare professionals and insufficient recruitment further strain staffing efforts, impacting patient care quality and employee satisfaction. Rapidly growing organizations that depend on manual processes and human labor must also establish robust back-office departments like HR and IT, adding complexity and costs.
Many healthcare organizations today remedy their staffing shortages with AI-driven software, which can handle 80% of menial tasks involved in claims submission, contract management, denials, coding, scheduling, and more steps in the revenue cycle. When this software is introduced as supporting a staff member rather than threatening their job, adoption goes more smoothly.
One key advantage of using software when demand is in flux is that it can easily be ramped up or trimmed back, given patient volume flux. Hiring and firing employees is far more costly and cumbersome.
Take a quick, self-guided tour through a powerful contract management and underpayments identification tool:
Navigating provider growth without overwhelming staff
To manage rapid growth while maintaining staff well-being, MSOs can adopt the following strategies:
1. Develop standard operating procedures (SOPs)
Standardize processes so that staff has consistent directions to rely on. This step gives them confidence and reassurance.
2. Leverage automation and technology
In addition to adopting workflow automation technology as mentioned above, MSOs should standardize technology across locations, including electronic health records (EHRs) and patient access platforms, to ensure seamless integration and reduce staff frustration with inconsistent systems.
3. Prioritize staff training and development
Create repeatable training models for new systems and workflows to ensure employees are equipped to handle changes associated with growth. Offer continuing education programs and leadership training opportunities to keep employees engaged and motivated.
4. Optimize workload distribution
Assess current workload distribution and reassign tasks where necessary to prevent burnout. Utilize tools like task management software to monitor workloads effectively. Encourage regular breaks and downtime to maintain mental health and productivity.
5. Engage staff in decision-making processes
These processes should be related to task allocation and workflow adjustments. When executed with respect, they foster a sense of autonomy and collaboration.
By implementing these strategies, MSOs can scale their operations efficiently without overwhelming their teams, ensuring sustainable growth while maintaining high levels of employee satisfaction.
Capital spending
Scaling operations requires significant financial resources, but access to capital can be challenging. Acquisitions often depend on outdated legacy software, medical equipment, and facilities. Organizations may need to optimize existing resources or form strategic partnerships to manage costs while investing in growth initiatives.
Still, improved operating margins from growth can enable investments in IT systems, data analytics, and AI-driven solutions that enhance efficiency and competitiveness. It is a game of catch-up, however, and luckily, the MSO has support in its private equity backer.
Operations
Growth has a way of introducing operational inefficiencies, such as difficulties in synchronizing workflows across multiple locations. Without streamlined processes and technology integration, organizations risk delays in decision-making and performance monitoring.
However, when managed effectively, practice growth can also drive significant operational improvements. By investing in advanced technologies like cloud-based systems and data analytics, organizations can centralize operations, improve communication between locations, and gain real-time insights into performance metrics. Standardizing workflows across sites enhances consistency in patient care, reduces redundancies, and optimizes resource utilization. Additionally, scaling provides opportunities to implement automation tools that streamline administrative tasks, enabling staff to focus more on patient care and strategic initiatives. With the right strategies, growth can transform operations into a more efficient, agile, and patient-centered model.
Navigating provider growth made simple with MD Clarity
Management Services Organizations (MSOs) have emerged as a game-changing solution for healthcare providers, enabling them to delegate non-clinical operations and administrative responsibilities. This allows healthcare professionals to focus on delivering exceptional patient care while improving operational efficiency and ensuring regulatory compliance.
But the job isn’t easy. MSOs have to track work progress, spending, KPIs, and so much more. MD Clarity has created software that removes some of the burden.
RevFind centralizes all payer contracts, digitizes rates, and terms. When a payment comes in, it compares it to the agreed-upon contract terms, automatically highlighting denials and underpayments. Leveraging real-time visibility, this platform helps ensure you pursue your payers for the money your physicians have earned.
Schedule a demo to see how RevFind can improve your net revenue and operations today.
.svg)
.svg)
