MSO Buying Group Membership

• By David Kopf
• Jul 01, 2011

Buying groups and member services organizations (MSOs) play an key role in the HME industry. A group of businesses with limited buying power can band together to gain volume sales discounts from various vendors. For an HME that means a big win right there. DME is expensive and in an era of declining Medicare reimbursement and outright hostile programs such as competitive bidding, as well as the complete upheaval of business models (such as what power mobility providers are facing with the removal of the first month purchase option) any way to drivedown the cost of purchasing inventory is critical.

But today’s HME MSOs have evolved to offer much more. Now, they are considered a way to gain a competitive edge in so many other respects. With an MSO membership, a provider can not only take advantage of group purchasing power, but leverage a multiplicity of additional of other services that these groups now offer to the industry.

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 and even help providers fight regulatory threats to the industry. They also host major events that can give HMEs another opportunity to network with and learn from their peers while attending seminars and conferences. Some even host small expos for seeing the vendor partners’ latest DME.

If you are not currently an MSO/buying group member, it would be a good idea to review how a membership could benefit your provider business. True, it costs money, but it could help you save even money or identify new revenue centers that could expand your business. And if you are an MSO member, you would do well to consider how you can make themost from your membership. Let’s look at some key considerations:

Current members should take stock of their membership. If you already are an MSO member, go back and review what’s available to 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.

Prospective members should make careful comparisons. 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 othersmight be tiered by company size.

Take an MSO membership for a spin. If you are considering a membership, remember that some MSOs 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.

Leverage business and financial services offered by MSOs. 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.

Look at the special programs and internal groups offered. Some MSOs offer special programs and tracks or internal groups designed to serve specific types of providers, such as respiratory or mobility providers. If your business specializes in particular types of DME, these could be critical to your success. Moreover, if you are considering expanding into new business areas, these groups can help you gain a foothold and ease your learning curve as you enter this new area.

Attend the events. As mentioned, these groups host events that include detailed conference sessions hosted by a variety of staff and industry experts; exposition halls showing off the latest DME from their vendor partners; and some fun hospitality events, to boot. Given the business intelligence they provide, the costs associated with attending these events is well worth spending.

Network. Networking is perhaps the one of the most important and least considered benefit 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. In addition to the events hosted by various MSOs, many of these groups also provide electronic networking opportunities, such as listservs and discussion forums that let you interact with your fellow HME professionals all year long.

This article originally appeared in the July 2011 issue of HME Business.