In healthcare transactions, the word “partnership” gets used early and often. It usually shows up in the first meeting, deck, and term sheet conversation.
It’s also one of the most common sources of disappointment after close.
This is one of the predictable friction points in MSO partnerships: the gap between expectation and reality.
Not because anyone necessarily lied, but because more often than not, both sides used the same word while meaning different things. One definition was relational and the other was structural. If that space isn’t closed before signing, it tends to reopen later as conflict over autonomy, decision rights, and what “changes” are allowed.
A durable partnership requires a shared definition that can survive real operations.
Two Meanings People Use
The physician definition is relational.
For many physicians, especially founders and senior clinicians, “partnership” means:
Respect for clinical judgment
A meaningful seat at the table
No surprises
Changes discussed before they happen
A sense that the practice will remain recognizable after the transaction
This definition is rooted in professional norms such peer treatment, seniority, and trust.
The MSO definition is structural.
For an MSO, “partnership” is primarily expressed through agreements and operating rules:
What services the MSO provides
What authority the MSO holds over non-clinical operations
How fees are calculated and adjusted
What decisions require physician input
How disputes are handled when people disagree
This definition is about what the documents say will happen when a decision needs to be made on an ordinary Tuesday morning. Conflict typically starts when someone tries to solve a structural issue using a relational expectation.
If a physician assumes a decision will be discussed “because we’re partners,” but the agreements grant the MSO authority to implement that change, the physician experiences it as a breach whereas the MSO experiences it as execution.
Both can be acting “normally,” and the relationship still fractures.
Translate Expectations Into Writing Before You Sign
The goal of a good diligence process is not to “lawyer everything to death.” It’s to translate the real expectations into language that can be executed.
In New York, CPOM constraints generally require a clear separation between clinical decision-making and non-clinical management. That provides an important compliance frame, but it doesn't automatically remove ambiguity.
A CPOM-compliant structure can still create stress if the day-to-day boundaries aren’t explicit. The question physicians should ask is “Do we agree, specifically, on who decides what, and how changes get made?”
The Partnership Definition Checklist
If you want to know what “partnership” actually means in a proposed arrangement, you can test it with 6 practical questions. If the answers are vague, then future friction is predictable.
1. Who controls clinical decisions, and where is it stated?
“Clinical autonomy” should be a documented fact. Physicians should confirm that clinical judgment, supervision, credentialing, protocols, and quality standards remain controlled by physicians, and that operational metrics don't indirectly override clinical standards.
2. What services does the MSO provide, and how is scope defined?
A management fee only makes sense if it corresponds to real services. The services list should be specific: staffing administration, payroll and benefits, billing operations support, equipment purchasing and maintenance, scheduling systems, call center workflows, marketing operations, vendor management, facilities support, technology systems, reporting, and other non-clinical functions.
Practical tip: If the scope is described as “comprehensive,” ask for a detailed service schedule. You need to know exactly what deliverables the management fee is buying.
3. How are fees set (FMV), and how can they adjust?
Fee predictability is a major driver of stability. Physicians should understand whether fees are fixed, a percentage, cost-based, or a hybrid; and what triggers an increase. If fees can change, the adjustment logic should be tied to scope change (more locations, more services, more staffing complexity), not clinical volume.
4. What is the governance model, and who decides what?
This is where the “partnership” becomes real. Physicians should be able to point to a clear governance process that answers:
Which decisions are physician-controlled
Which decisions are MSO-controlled
Which decisions are joint decisions
What happens when there’s disagreement
If governance is informal or based on “we’ll figure it out,” the structure is fragile.
5. What changes in Year 1, and how is that documented?
Many post-close disputes are about surprise. If the MSO plans to change systems (billing workflows, scheduling tools, payroll, marketing programs, vendor stack, staffing workflows), the general Year 1 plan should be disclosed and agreed to before signing.
A useful question is: “What will look different 90 days after close?” If no one can answer, the partnership is relying on trust instead of clarity.
6. What happens in conflict (dispute resolution and exits)?
Every partnership is easy when revenue is up and operations are calm. The structure is tested when something goes sideways and physicians should understand:
How disputes are escalated before they become legal
Whether there is a defined resolution process
What the unwind or exit options are if alignment breaks
A structure that assumes permanent harmony is usually not durable.
Why Boring Is Better
Many physicians focus on the exciting part of a transaction: valuation, growth plans, expansion opportunities, or new resources.
But long-term stability is usually determined by the boring parts: documented boundaries, governance cadence, scope clarity, and predictable change management.
When expectations are written down, they become predictable. Predictability reduces stress and prevents people from renegotiating the relationship every time something changes.
High-functioning MSO partnerships operate on clear rails because when lanes are clear, the model becomes uneventful and uneventful is what you want.
How Verdira Approaches This
Clinical decisions remain with physicians.
MSO scope is clearly defined in writing and tied to real services.
Governance is clarified before signing so expectations remain stable after close.
We build long-duration platforms and do not operate on forced exits.
If you’re evaluating an MSO partnership or successor role and want to sanity-check structure and expectations, we’re open to thoughtful conversations.
This article is for general educational purposes and is not legal advice.
