Equity MSO (management services organization) benefits hospital and physicians

Equity MSOs offer an alternative to hospital's employment of physicians and acquisition of their practices. In one example, several primary care physicians, organized into a single professional corporation, entered an agreement with a hospital to establish an equity MSO that was jointly owned by both parties. The partnership enabled the physicians to negotiate managed care contracts more skillfully and improve their bottom line. Under the agreement, the physicians' income is determined by their productivity. The hospital is confident that this new entity will help it sustain relationships with the physicians.