How to Get the Most From an MSO or Buying Group

Buying groups and member services organizations (MSOs) play an important role in the HME industry. A group of businesses with limited buying power can band together to gain volume sales discounts from various vendors. And with an MSO, a provider can not only take advantage of group purchasing power, but leverage educational services, networking opportunities and a multiplicity of other services.

Buying groups have a fairly deep history in healthcare. In fact, the very first group purchasing organization in the United States was the Hospital Bureau of New York, which was formed nearly a century ago in 1910. However, the growth of healthcare buying groups was so slow that there were still only 10 such groups more than a half century later, in 1962.

Medicare and Medicaid changed all that. A dozen years later, 40 such groups had been formed, and that number expanded to more than 120 by 1977. Today, the overwhelming majority of acute care and community hospitals participate in group purchasing. And, of course, the HME industry has been leveraging the value of group purchasing power for some time in order to get solid deals on what is often very expensive medical equipment.

Like their members, HME buying groups have evolved beyond group purchasing into member service organizations (MSOs), and play a much broader role in the HME industry. They offer professional education, webinars, conferences and even help providers fight regulatory threats to the industry. So, how can a provider get the most from its membership?

The services of MSOs and buying groups have greatly expanded over the years. With the constantly changing economic, healthcare and funding environments, the services these groups provide have evolved with their members’ needs. Services can include items such as liability insurance and surety bonds; equipment financing; web design and search engine optimization; managed care network contracting; design and production of marketing materials; live and online educational offerings; and regulatory and government affairs assistance.

If you are a member of a group, make sure you have a thorough understanding of what your membership brings you. You might be pleasantly surprised. If you are a prospective member, remember that you will save money not only through product discounts, but increased efficiencies, networking opportunities and up to date government and regulatory information that can protect your funding, as well.

What should a provider research before getting involved with an MSO or buying group? If you’re not yet a member of a buying group, you should be, given the bang for the buck they offer. There are various items you should consider when reviewing groups that you are considering for membership. Spend some time getting to know each organization. The various organizations in the industry are not the same, and each have their strengths. Things to compare include each groups’ service offerings; the members, staff and culture of the organization; and of course the return on investment. In terms of price, MSOs and buying groups have different prices structures. Some might be flat and others might be tiered by company size.

If you’re unsure of which organization is right for your business, you might be able to give some of them a trial run. Some groups require no term commitments for membership, so that if a provider doesn’t like a group’s member services after all, it can end its membership. Joining an MSO or buying group is a relatively simple process with most just requiring a provider to fill out an application. The application is quickly reviewed by the group, which then gets back to the provider with any further questions, if need be.

Maximizing membership. Once a provider has joined an MSO, the key is to make the most of it. The provider has joined because of the package of services offered, so now is the time for that provider to take full advantage of these services. In most cases, the more services a member utilizes and maximizes, the more its business directly benefits, whether that is through the discounted prices it pays, or the efficiencies it gains. Don’t just focus on one or two services; use them all. And if you find that is difficult, then appoint staff to approach membership by committee to help integrate more of the group’s services into your business on a faster timeline.

Networking opportunities. Networking is perhaps the hidden gem of MSO and buying group membership. The best way to learn new business strategies, operations efficiencies and approaches to patient care is to get them straight from your peers. Most groups opportunities for members to meet with one another in order to share experiences and insights. Some of them are quite large and essentially count as industry events, such as The VGM Group’s Heartland Conference, or the MED Group National Rehab Network Summit. Moreover, many of these groups also provide electronic networking opportunities, such as listservs and discussion forums. All of these opportunities let you ask your peers questions, evaluate the answers, and apply them to your business.

Points to take away:

  • MSOs and buying groups offer a variety of member services beyond just group purchasing.
  • Their services have evolved over the years to include marketing support, insurance, surety bonds, educational events and networking venues.
  • The key to MSO and buying group membership is to just do it. Like state and national association membership, the ROI pencils out.
  • When researching these groups, weigh the various services they offer and the costs for each. In fact, you might be able to give them a trial run if their commitment terms are on a monthly basis.

Learn More

Here is a list of some of some key MSOs and buying groups in the industry:




This article originally appeared in the July 2009 issue of HME Business.

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