Management service organizations: effective strategy to assume and manage full risk agreements?

A management services organization (MSO) has emerged as one structure to manage professional and hospital risk agreements. Health plans and direct payers are transferring traditional functions to medical groups and health systems under these agreements. How does a hospital and affiliated medical group develop a strategy to assume, manage, and mutually benefit from these agreements? When do market forces dictate whether an MSO is the most appropriate organizational model to utilize? The development of an MSO can offer an effective organizational strategy to capture capitated contracts and assume responsibility for population-based medical services. This article explores the features of such an organization, areas for potential collaboration between the medical group and hospital, as well as the impact on patient care.