PHSO: Supporting physicians on the journey toward population health management

It’s time to revive the management services organization (MSO) and modify it to support the needs and demands of changing medical practices.

MSOs were prevalent in the 1990s, supporting practices that were transiting to managed care and creating efficiencies in physician practice management. Since then, MSOs have continued to support physician practices through waves of healthcare changes by helping smaller practices decrease overhead and retain autonomy.

But over time, many MSOs have found it difficult to offer increasing value to medical practices. Often, the focus has been on billing and coding, group purchasing or other back-office functions. As a result, many MSOs have disappeared; those that remain primarily assist with managing their employed or affiliated medical groups.

The transition to value-based payment systems has medical practices aligning with accountable care organizations (ACOs) and clinically integrated networks (CINs), which requires a new level of support to medical practices. A true population health support organization (PHSO) can be a perfect fit in a dynamic medical practice setting. (For a comparison of key features of the MSOs of the past and PHSOs of the future, see the table below.)

Role of the PHSO 

The PHSO is a key platform for physicians to transition into the new world of healthcare. It provides infrastructure for physicians to reshape and drive patient-centered wellness and engagement, and efficiently manage a population of patients. The PHSO is a sound structure for those starting and maintaining a CIN, or simply for those managing evolving medical practices to meet the demands of the future delivery system. Much like MSOs of the past, a well-designed PHSO could also support physicians who wish to remain in private practice but still collaborate with other providers across the continuum. Bottom line, the PHSO should strategically integrate providers, hospitals, payers and services across the continuum of patient care to reduce the barriers associated with fragmented patient care.

To improve patient loyalty and experience, a PHSO must support physicians in sound financial management, quality improvement and infrastructure needed for population health. These include moving the needle on quality measures and outcome performance, controlling total cost of care and providing improved patient access to medical care. The PHSO also acts as a conduit for the transfer of knowledge critical to success in managing the health of populations.

Benefits of the PHSO

The PHSO is a vehicle to connect all the dots for the transformation from fee-for-service to the new value-based payment models. There are many benefits to organizing and operating a PHSO to support physicians’ transition to value-based care delivery, including:

• Integrating physicians with the organized delivery system of care, which supports ACO and CIN initiatives, such as improved transition of care and reduction in care gaps. The PHSO infrastructure allows and supports providers to take on risk and manage it effectively.
• Enhancing system interoperability to exchange and share data among the providers to support care delivery.
• Reducing overall physician losses and complexities of practice management.
• Ensuring compliance with Centers for Medicare & Medicaid Services (CMS) Quality Payment Programs, such as the Merit-based Incentive Payment System (MIPS) and alternative payment models (APMs), and avoiding payment reductions and potentially receiving positive payment adjustments.
• Supporting consumerism by creating a unified brand focused on consumer experience and loyalty.
• Managing the revenue cycle to support value-based contracts.
• Providing education and support for new coding methodologies and nuances specific to managing risk and value-based agreements (i.e., diagnosis coding, chronic care management requirements, hierarchical condition category (HCC)/risk adjustment factor (RAF), etc.).

Whether physicians are employed or independent, the PHSO supports them equally and provides a vehicle for improved operational and financial performance.

Making it happen 

To transition to a PHSO, begin by assessing the organization’s employed medical groups and conducting outreach to independent, affiliated medical groups to determine needs, capabilities and available infrastructures to support the value-based transition and identify the gaps. These become the starting place for core PHSO services.

Next, consider whether the organization already has a CIN or is planning a CIN implementation. If so, does the organization have an existing MSO? That entity could evolve into a PHSO supporting employed and independent, affiliated medical practices. The key to success is either designing a new organization or adapting an existing one to fill the identified gaps of support services needed to be successful under changing reimbursement and care delivery models.

Finally, make it a partnership. Use the PHSO to gain new alliances and strengthen existing relationships with physicians. Ultimately, partnerships will allow the collective organizations to improve the health of the populations they manage.

The healthcare delivery system and corresponding reimbursement structure are undergoing significant change, which is unlikely to slow down. The old ways of practicing medicine will no longer work in a value-based payment system. Transforming the current practice structure, business strategy and partnerships along the continuum of care is key to finding success in the new world of healthcare.