As consolidation accelerates, many independent physicians are weighing whether to partner with a Management Services Organization (MSO), sell to private equity, merge with another practice, or join a hospital system. While these options are often discussed interchangeably, they differ significantly in structure, control, risk, and long-term implications.
MSOs generally fall into two categories:
- Ownership-based MSOs (often PE-backed):
These involve partial or full sale of the practice. Transactions are typically complex, with extensive due diligence, staggered payouts, earn-outs tied to future performance, and mandatory work-back periods (often 2–3+ years). Physicians usually give up a degree of autonomy and may transition to employee status, with changes to staffing, scheduling, referrals, and vendors. Financial upside can be meaningful—but comes with execution and performance risk. - Non-ownership MSOs (services-only):
These MSOs provide business, operational, and administrative support under long-term contracts, without acquiring equity. Physicians retain full ownership and control but receive no liquidity event. While not an exit or succession strategy, this model can improve efficiency, scalability, and recruiting without limiting future partnership paths.