What is an MSO (Medical Support Organization)

MSOs Defined: What Is a Medical Support Organization?

As the healthcare industry continues to evolve, including the aesthetics and wellness sectors, more practitioners and business owners are exploring the benefits of working with Medical Support Organizations (MSOs). For practice owners considering a sale or partnership, understanding what an MSO is and how it operates is critical to making informed decisions about the future of their business. Whether you’re looking to sell a medspa, dermatology clinic, plastic surgery practice or other wellness practice, knowing how MSOs function and what they offer can help you determine if selling to an MSO is the right move for your practice.

In this blog post, we’ll explain what an MSO is, how they operate in the aesthetics and wellness sectors, and why selling to an MSO might be a beneficial option for your business.

What is an MSO?

A Medical Support Organization (MSO) is a business entity that provides non-clinical administrative services and support to healthcare practices. MSOs allow medical professionals, including those in aesthetics and wellness, to focus on clinical care while the MSO handles the day-to-day operations of running the business. These support services can include everything from human resources and payroll to marketing, regulatory compliance and supply chain management.

MSOs serve a broader range of healthcare providers, including dermatology clinics, plastic surgery practices, medspas and wellness clinics. By partnering with or selling to an MSO, aesthetics and wellness practice owners can offload the business and administrative burden, enabling them to focus on patient care and clinical services.

Key Functions of an MSO

The primary role of an MSO is to manage the operational aspects of a practice, allowing clinicians to concentrate on their core expertise: patient care. MSOs provide a wide array of non-clinical support services, including:

1. Human Resources: Managing employee recruitment, training, payroll and benefits can be time-consuming, daunting and complex. MSOs handle HR responsibilities, ensuring compliance with labor laws and industry standards while supporting staff retention and development

2. Marketing and Patient Acquisition: MSOs often have dedicated marketing teams that specialize in a range of marketing strategies to help practices attract new patients. This may include website management, SEO (search engine optimization), social media marketing and patient referral programs

3. Regulatory Compliance: Navigating the regulatory landscape is a challenge for any healthcare provider. MSOs ensure that their partner practices stay compliant with healthcare regulations, including privacy laws (e.g., HIPAA), billing standards and licensure requirements

4. Billing and Revenue Cycle Management: Handling billing, collections and revenue cycle management is crucial to maintaining the financial health of a practice. MSOs streamline these processes, optimizing billing accuracy and reducing payment delays, ensuring smooth financial operations.

5. Supply Chain and Vendor Management: By working with an MSO, practices can benefit from improved purchasing power. MSOs negotiate better deals with suppliers, ensuring that the practice gets the best prices on medical supplies, equipment and other operational needs

6. Financial Reporting and Business Analytics: MSOs provide robust financial oversight, including generating regular financial reports and key performance indicators (KPIs). This allows practice owners to make informed decisions about the future of their business and helps MSOs identify areas for potential growth and improvement

By handling these aspects of the business, an MSO enables practitioners to run a more efficient and profitable practice, with fewer day-to-day management concerns.

Benefits of Selling to or Partnering with an MSO

For aesthetics and wellness practice owners, there are several key advantages to selling to or partnering with an MSO. Below, we explore the benefits that MSOs bring to the table and why many practice owners find them an attractive option.

1. Focus on Patient Care

One of the most significant advantages of working with an MSO is the ability to focus exclusively on patient care. When practice owners no longer have to worry about running the business side of things – managing staff, dealing with insurance and staying compliant with regulations – they can dedicate their time and energy to clinical services.

For many practitioners in the aesthetics and wellness industries, this results in higher quality patient care and job satisfaction, as they can devote themselves to their craft without the added stress of running a business.

2. Operational Efficiency and Scalability

MSOs bring a level of operational efficiency that individual practices may struggle to achieve on their own. Through streamlined processes, technology integration and centralized services, MSOs can optimize the way a practice operates. This can lead to cost savings, improved patient satisfaction, and increased revenue.

For practices looking to grow, MSOs offer scalability. Whether expanding to new locations, offering new services or increasing patient volume, MSOs provide the support and infrastructure needed to grow without overwhelming the practice owner.

3. Higher Valuation for Your Practice

If you’re considering selling your aesthetics or wellness practice, working with an MSO can result in a higher valuation. MSOs are often willing to pay a premium for practices that fit into their strategic goals. By providing operational support, MSOs can make a practice more profitable and scalable, which is reflected in the purchase price.

Unlike individual buyers, who may have limited financial resources, MSOs often have significant capital to invest in acquiring and growing practices because they are typically backed by private equity. They are also more likely to see the value in a practice’s growth potential, which can lead to a more favorable sale price for the seller.

4. Access to Advanced Technology and Resources

MSOs typically invest in advanced technology platforms that improve the operational and clinical efficiency of a practice. This includes electronic medical records (EMR) systems, telemedicine platforms and patient engagement tools. Practices that partner with an MSO benefit from these technologies, which can improve patient care, streamline administrative processes and enhance the overall patient experience.

Also, MSOs have access to resources like specialized marketing teams, legal experts and business development professionals, further improving the performance of a practice.

5. Strategic Growth and Expansion Opportunities

For owners of growing practices, MSOs provide the opportunity to expand in ways that might not be feasible as an independent practice. MSOs often pursue strategies for geographic expansion, allowing practice owners to open new locations or enter new markets. By leveraging the MSO’s network and resources, practice owners can achieve faster and more sustainable growth.

MSOs can also help practices diversify their service offerings, adding complementary treatments or technologies that can bring in additional revenue and enhance the overall patient experience.

Common Misconceptions About MSOs

While MSOs offer numerous benefits, there are some misconceptions that practice owners may have about partnering with or selling to an MSO. Let’s address a few of the most common:

• Loss of Autonomy: One concern that practice owners often have is losing control over their practice after selling to an MSO. While it’s true that MSOs take over the business and administrative operations, most MSOs allow the clinical staff to maintain full control over patient care and treatment decisions. In fact, many MSOs prioritize clinical autonomy, recognizing that high-quality patient care is essential for long-term success
• Only for Large Practices: Some owners assume that MSOs only acquire large, multi-location practices. In reality, MSOs are interested in acquiring practices of all sizes. Identifying practices that align with the MSOs strategic goals is often significantly more important than the practice’s footprint. Even small practices with specialized service offerings or strong growth potential can be attractive to MSOs
• MSOs Only Focus on Cost-Cutting: While MSOs do bring operational efficiency, their goal is not simply to cut costs. Instead, they aim to optimize the practice’s performance, improve patient care and enhance profitability through smart investments in technology, marketing and staffing

Is Selling to an MSO Right for Your Practice?

Selling your practice to an MSO is a major decision, and it’s essential to weigh the benefits against your personal and professional goals. If you’re a practice owner who wants to focus more on patient care, reduce the burden of managing business operations and unlock growth opportunities, partnering with or selling to an MSO can be a smart move.

MSOs bring a level of operational expertise, resources and financial backing that can help take your practice to the next level, whether you’re looking for an exit strategy or want to scale up your business.

Closing Thoughts

MSOs are transforming the aesthetics and wellness industries by offering practice owners the chance to focus on patient care while benefiting from professional business management and operational support. Whether you’re considering selling a medspa, dermatology clinic, plastic surgery practice or any other wellness practice, working with an MSO could be a beneficial option.

If you’re interested in learning more about selling your practice to an MSO or exploring your options, contact us today. Our team of wellness practice brokers and aesthetics practice brokers has the expertise and network to help you navigate the sale process and secure the best outcome for your business.