Management services organizations have become one of the most talked-about structures in independent physician practice, but few people can explain what one actually does on the ground.
Basheer Alismail, president of Capital Surgical Solutions, joined Becker’s to discuss how he and Benjamin Stein, MD, built one from scratch.
“Unlike other MSO solutions, we build ours organically and on a de novo basis,” he said.
The model is deliberately structured in what he describes as a “crawl-walk-run” approach, with each phase being earned before the next one begins.
Phase 1: Crawl
The first two years of an MSO relationship at Capital Surgical Solutions are not about consolidation or control. They’re about peer-to-peer engagement and showing groups what successful performance looks like.
Most practices have administrative teams that are stretched thin. Rather than immediately infusing capital or acquiring management rights, Mr. Alismail’s team focuses on sharing best practices across their physician groups, whether that’s upfront collection policy, scheduling strategy, ancillary program development or revenue cycle improvement. Critically, those lessons come from other practices in the network, not just from the management team.
“We connect them — physician to physician, administrator to administrator — so they’re learning from people who have actually done it,” he said. “All ships rise through access to better information, and it doesn’t require major capital investment to start.”
The “crawl” phase requires time and effort, but it isn’t capital-intensive.
Phase 2: Walk
Once a management team has demonstrated its value, the relationship can deepen into shared services. That might mean consolidating revenue cycle operations, organizing groups under a single IRS employer identification number or making collective investments in technology. Capital Surgical Solutions is currently deploying AI tools across three core workflow areas through this mechanism.
The key distinction from traditional private equity is when and how those management rights are acquired.
“That’s a fundamental difference from traditional private equity, which writes a check on day one and immediately acquires management rights,” he said.
That dynamic, he said, ensures both sides are making the right bet. Physician groups know what they’re signing up for. The management team knows it’s picked the right partners.
Phase 3: Run
The third phase is succession planning, and it arrived faster than expected. Two of Capital Surgical Solution’s current physician groups have already indicated they want to be acquired.
“We didn’t see that coming,” Mr. Alismail said. “So now we’re having to mobilize around that strategy.”
The strategy comes amid a gap in the market, where independent physician groups need a viable alternative to private equity when it comes to terminal value. Many groups want to monetize what they’ve built without simply selling to the highest bidder. Capital Surgical Solution’s model is designed to be that alternative, with a structure that keeps decision-making power in physicians’ hands.
The crawl-walk-run model isn’t the fastest path to scale. That’s why Capital Surgical Solution has intentionally stayed boutique, managing a small number of partnerships closely rather than expanding broadly.
At the Becker’s 32nd Annual Meeting: The Business and Operations of ASCs, taking place October 29-31 in Chicago, ASC leaders, surgeons and healthcare executives will explore strategies to drive growth, enhance operational performance, navigate reimbursement challenges and prepare for the future of ambulatory surgery. Apply for complimentary registration now.