SCALE Healthcare Leadership Conference on October 18, 2023 at 8:00 AM-6:00 PM. Click here to register
Member Login

What To Do When It All Goes Wrong – A Glimpse into MSO Turnarounds

Bulletin Board Overview

Over the past two quarters, we have seen greater activity amongst lenders focusing on, and in certain cases assuming ownership of, underperforming assets. 

Here are the top recurring pain points in the MSO market today:

  1. Failure to meet the phase-specific needs of an MSO as it evolves from an independent platform to first institutional ownership to a regional MSO to a multi-regional / national MSO.
    • Strategy & value proposition
    • Management experience relative to MSO size & complexity
    • Systems & integration
    • Reporting & analytics
  2. Gaps in accrual revenue collection and conversion
  3. Overpaying for add-on acquisitions is due to either (i) prioritizing growth over sustainable performance or (ii) weak diligence or deal structuring resulting in meaningfully higher than anticipated effective multiples.
  4. Subpar:
    • Provider recruitment, retention & engagement
    • Provider compensation models
    • Performance transparency, reporting & analytics.
    • Add-on integration – cultural, systems, operations
  5. Confused strategy around centralization vs. local / regional management & infrastructure resulting in bloated overhead, suboptimal performance results, and weak controls
  6. Poor controls around inventory management and tracking of COGS, especially for expensive, low margin drugs and medical supplies.

Turnaround Execution

Partial and siloed project teams are often insufficient to get the job done. It is the core multidisciplinary project teams with strong representation across the below skill sets that are conditioned for success:

  • Robust, well-resourced generalist team that has experience managing the urgent performance “crisis”
    • Project Management
    • Analytics
    • Presentation & Communications
  • Coordinated Specialist Teams
    • Clinic Operations
    • Provider Liaison
    • RCM
  • Macro Controls
    • Chief Financial Officers
  • Successful turnarounds often require cultural change. This delicate process requires investment in internal marketing to promote transparency and build / rebuild trust & positive momentum.
  • Real estate will be a big part of the story – make sure your MSO is proactively organized on its real estate inventory and strategy to avoid a scramble during periods of underperformance. There is often insufficient time to focus on real estate optimization by the time a turnaround is required as such, potential real estate savings or concessions are often missed or delayed.
  • Turnarounds in the MSO market take time and require laborious and iterative efforts. Patience and persistence are required.
  • Well informed stakeholders and strong alignment across the lender, owner and management team is critical. Gaps between these stakeholders often results in delayed action, overly expensive processes, and ultimately failed turnarounds.

Join as an Individual

Enhance the performance of your healthcare company with an Individual SCALE Membership.

JOIN US

Join as an Organization

Drive success across your organization and empower each member of your team with a SCALE Organizational Membership.

JOIN US

Elevating healthcare solutions through research and innovation on a global scale.

© 2024 EDUCATION by SCALE Healthcare.
All rights reserved. 
About
ASK AN EXPERT
Subscribe to our Newsletter
Facebook-f Twitter Instagram Linkedin Youtube

Log in

If you are a community member

OR

Thanks for visiting!

Put your email and we promise we won’t spam you. We have so much to show you.

Close

Join SCALE Community

We are excited for you to share in the benefits of SCALE community’s healthcare focus materials. If you are not currently a member sign up now to get unlimited access to all our materials.
Join Now
Log In
  • © 2023 All rights reserved.
Linkedin Twitter Instagram Facebook-square Youtube