By Sri Vanamali, CEO of GEX Management, Inc., a corporate advisory firm to high-growth and VC-backed companies.
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Having invested, operated and identified efficiencies in multiple management service organizations (MSOs) throughout my career, I have gained several valuable insights into the complexity and nuances of successfully managing healthcare-focused MSO operations. In this article, I would like to discuss the role of an operating partner in running a successful private-equity-backed healthcare MSO and the key attributes that are essential to the success of both the MSO and the practice clinic. As an MSO operating partner, you will be responsible for working closely with the clinic’s management team to improve operational efficiency, reduce costs and increase revenue. Here are five ways to succeed as an operating partner in a PE-backed healthcare MSO model.
1. Develop A Deep Understanding Of The Healthcare Industry
To be an effective operating partner in a healthcare MSO, it is essential to have a deep understanding of the healthcare industry. This includes knowledge of healthcare regulations, healthcare technology, healthcare finance and healthcare operations. Understanding the regulatory environment is critical, as it can have a significant impact on the clinic’s operations and revenue.
One way to do this is to regularly attend industry conferences and events where experts discuss the latest developments and best practices. Another option is to participate in professional associations and networks that provide resources, training and opportunities to connect with peers in the industry. Additionally, staying connected with government agencies and monitoring relevant publications can help you stay informed about changes in regulations and policies that impact the healthcare industry.
Furthermore, understanding healthcare technology is vital in today’s digital age. As technology continues to evolve, it is important to be aware of new systems, software and platforms that can improve the clinic’s operations. For instance, electronic health records (EHRs) may be able to improve patient outcomes, reduce costs and enhance the efficiency of the clinic’s operations. By staying current on industry trends and developments, you can provide valuable insights and guidance to the clinic.
2. Build Strong Relationships With Clinic Leadership
Building strong relationships with the clinic’s leadership is essential for the success of the practice. This includes developing a strong rapport with the clinic’s management team, understanding their goals and identifying areas where you can provide support. By building trust and open lines of communication, you can work collaboratively with the clinic’s leadership to achieve success.
One strategy you can use to do so is to regularly schedule meetings with key stakeholders to discuss goals, challenges and opportunities for improvement. By keeping the communication channels open, you can quickly address any issues that arise and work collaboratively to find solutions. Additionally, actively listening to feedback and concerns from the management team and leadership can help you build trust and demonstrate your commitment to their success. By incorporating their input into your decision-making process, you can foster a culture of transparency and collaboration that strengthens the relationship between the MSO and the clinic.
Finally, as an operating partner, you should be available to the clinic leadership team and provide guidance and support as needed. You should be responsive to their needs and concerns and maintain a positive relationship with them.
3. Focus On Operational Efficiency And Process Improvement
Operational efficiency and process improvement are also important to the success of a healthcare MSO model. As an operating partner, you should focus on identifying areas where the clinic can improve its operations, reduce costs and increase revenue. This may involve implementing new technologies, improving patient care processes or optimizing revenue cycle management.
To improve operational efficiency, you should work with the clinic leadership team to identify inefficiencies and areas of waste. For instance, you can conduct a thorough analysis of the clinic’s supply chain to identify areas where costs can be reduced. You can also review the clinic’s billing process to identify opportunities to improve revenue cycle management.
4. Be Proactive And Flexible
In a rapidly changing healthcare industry, it is essential to be proactive and flexible as an operating partner. This means anticipating challenges and opportunities, staying current with industry trends and adapting quickly to changes in the market.
This may involve attending conferences, reading industry publications and networking with other healthcare professionals. You should also be willing to adapt quickly to changes in the market. For instance, if there is a shift toward telemedicine, you should be prepared to help the clinic adopt this technology and integrate it into its operations.
5. Foster A Culture Of Collaboration And Continuous Improvement
A key element of success in a healthcare MSO model is fostering a culture of collaboration and continuous improvement. As an operating partner, you should encourage open communication, collaboration and a willingness to try new approaches. By promoting a culture of continuous improvement, the clinic can stay agile and responsive to changing market conditions.
One strategy I have adopted in the past to achieve this is to regularly collect and analyze data on key performance indicators (KPIs) to identify areas for improvement. By setting specific, measurable goals and regularly tracking progress toward those goals, you can motivate the clinic’s staff to continually strive for excellence.
Another strategy I have adopted is to encourage staff at all levels to provide feedback and suggestions for improvement. By creating a culture where staff feel empowered to share their ideas and contribute to the clinic’s success, you can foster a sense of ownership and accountability that drives continuous improvement.
Additionally, you should implement regular training and professional development opportunities to help staff acquire new skills and stay up to date on the latest industry trends and best practices. By investing in your staff’s growth and development, you can create a culture of continuous learning that supports ongoing improvement and innovation in the clinic.
By following these guidelines, you can help the clinic achieve success as a dynamic operator and thrive in a rapidly changing healthcare landscape while helping your PE partners achieve long-term success with their investment and business goals.
