I recently had the opportunity to check in with Kenneth Fenchel, Co-Founder and CEO of Independent Practice MSO (IPMSO), to discuss why the time was right for a ‘different’ type of Management Services Organization (MSO) and where the company sees its role in meeting the needs of independent practices.
T: I know that you have spent over 25 years assisting medical practices to grow and thrive, especially in the area of finance and cost savings. From your perspective, what are some of the best practices, or tips, that you most commonly tell your clients to implement in those areas?
K: Too often practices have been using the same workflows and ordering patterns from the same vendors and suppliers that they signed with at the birth of the practice. Often, it’s just easier to do things this way. It takes a significant amount of time and effort to vet new vendors and suppliers and to confirm that you are (or are not) getting the best pricing from those companies. In most cases, the practice is missing out on discounts and savings because they just do not know they are available. And as all who run medical practices know, they are bombarded daily with different sales reps promising discounts and savings but that in the end simply may not be there. Despite the red herrings, it is important for practices to review pricing for all medical suppliers and services on a regular basis. Most vendors do not notify you of price increases – only potential, hard to achieve discounts – and that of course can result in costs creeping ever upward. Cost / overhead containment is an ongoing process. This can be hard to control but it can and must be done for the health of the practice.
T: We deal with a lot of MSOs and MSO-type companies on behalf of our clients at The Verden Group. And we see that many practices consider outsourcing their core practice functions to these types of companies. Why do you think that many organizations are heading in this direction?
K: Small and medium size practices do not have the purchasing power of large organizations and therefore often cannot get quantity discounts. And they do not have the time to fully vet all of the vendors in the market to see what pricing and discounts are available. I think it’s a combination of the time, plus the honest desire to offload some of these decisions so that they can focus on actually delivering quality healthcare.
T: You have mentioned to me before that the impetus for creating IPMSO was to offer something ‘different’ than other MSO-type companies. Can you elaborate?
K: The IPMSO was created to be an organization that independent practices can use to gain volume price discounts that only large organizations now receive. There are two things that make us different from other MSOs. First, we do not want to run or manage your practice – most MSOs contractually retain the right to have impact on your decision making and control how practices run. Contrary to that model, we offer discount prices and services in an ‘a la carte’ manner, so that practices can choose to take advantage of just one or all of our services based on their immediate needs,. Secondly, there are no long- term commitments or contracts. A practice may use our services for a one- time situation then decide to take over the process internally once the issue has been resolved. A common example of this may be when a practice hires a new physician. Some practices utilize our services to get the physician credentialed and contracted, then take the process back in-house to keep all documents up to date and manage re-credentialing activities. Other practices like us to continue to monitor and update CAQH and supply insurance companies with documents and information as requested. We are happy to work with practices either way that best fits THEIR needs.
T: I understand HR functions are one of the most challenging issues faced by medical practices – it can be daunting to learn about labor law, stay in compliance and juggle all of the aspects inherent in managing employees. What IPMSO doing to tackle this area?
K: I am glad you asked that question. Human resource (HR) functions can truly be a drain on any practice’s financial and staff resources. In smaller practices, these functions are likely falling onto one of the physicians or partners – certainly not the best use of that doctor’s time! So we offer a range of solutions to meet the specific needs of our members. One such solution that we use ourselves is the use of a national Professional Employer Organization (or PEO). The Verden team had researched this last year (see https://verdenviewpoint.com/2016/03/is-a-peo-right-for-your-practice/) and ultimately decided to move forward with that solution themselves. Essentially, the PEO is the staff’s employer and effectively we reap the benefit of streamlined payroll services, enjoy compliance assistance, maintain up-to-date employee handbooks, and can offer a full package of medical, dental and vision coverage, along with 401(k) plans, life and disability insurance and a range of other perks that just wouldn’t be possible for a small firm like ours. There is nothing quite like vetting a vendor directly: between reaping large savings (about $1000 per employee per year compared to before we joined the PEO) and receiving peace of mind by outsourcing the HR aspects, our experience has made us big fans of this solution. Furthermore, we really like that this solution meets our mission head on in helping smaller practices to stay independent by competing with larger organizations, as this PEO has affordable health insurance plan offerings available to practices as small as two employees . . .
T: Do you see IPMSO as having a role in actively helping practices to navigate towards financial improvements and improved process goals?
K: Absolutely. The company was started out of the identified need to help independent practices to not just survive but to actively thrive in this market, so a natural starting point for us is in helping our members to cut costs that improve the bottom line. We aggregate discounts, services, pricing and rebates through our custom negotiated contracts and links into national buying contracts with vendors like McKesson and PracticeWell, as well as niche services where we seek out best pricing, best service and best solutions for our participants. It’s not only satisfying to put these best-in-the-nation deals together, it’s also really fun to calculate the savings for each participant practice as they evaluate our offerings! I didn’t know that saving practices significant cash could be so rewarding, but here I am, enjoying every minute of it. But to get back to your question about actively helping practices to navigate – you can’t do that without actively listening to clients. Changes in a practice can occur weekly with the rapid pace of business that we are in. We continually talk through what problems need to be addressed and what solutions we can bring to bear on the situation. In fact, we consider ourselves not just problem solvers: rather we subscribe to The Verden Group’s motto of being ‘solution creators’. Why wait for a problem when you can create a solution before it becomes an issue in the first place? That’s what we are about. We deliver savings to help practices get immediate relief, then we discuss the issues and goals of the practice and develop plans to prioritize solutions. Working in such a collaborative way enables us to curate the best solutions for each individual group and provides the back up and resources the practice needs to thrive independently.