ABSTRACT
A Management Services Organization (MSO) is an organization owned by a group of physicians, a physician–hospital joint venture, or investors in conjunction with physicians. In some cases, the hospital owns the service bureau that sells various management services to medical staff. MSOs generally provide practice management and administrative support services to individual physicians, Independent Practice Associations (IPAs), Physician Hospital Organizations (PHOs), or small group practices. MSOs can act as Group Purchasing Organizations to help members of IPAs, PHOs, and group practices purchase their services more economically instead of individually, to achieve economies of scale. Faced with the decision to move ahead with MSO affiliation, the providers need to move to the next step of a “make-or-buy” decision. MSOs come in a variety of arrangements. Hospital administrators who may have never administrated a provider practice feel that their management expertise and experience in hospital systems management transfers over to management of the day-to-day operations of a small, nondepartmentalized business unit.
