After a multiyear turnaround from bankruptcy to profitability, Brentwood, Tenn.-based Quorum Health is preparing to launch a management services organization aimed at helping rural hospitals streamline IT and revenue cycle operations.
CEO Chris Harrison, who has led the for-profit health system through a post-bankruptcy restructuring from 21 to 12 hospitals, believes launching this MSO with an operator’s mindset could reshape rural hospital support.
He sees the MSO as part of a broader vision to help independent and struggling operators manage some of their largest nonclinical expenses, including EHR implementation and maintenance, front- and middle-end revenue cycle management, and core IT and data infrastructure support.
The idea for the MSO was born in crisis. In late 2023, after Quorum acquired two hospitals in West Texas from the now-defunct Steward Health Care, the company was informed that Steward would no longer honor transition service agreements unless fees increased significantly.
“We were facing this issue where we had to pay the increased fee or find another solution,” Mr. Harrison said during a Nov. 5 session at Becker’s CEO and CFO Roundtable. “We weren’t alone; there were multiple operators in the same situation.”
As a health system leader who had previously overseen asset sales and TSAs, Mr. Harrison saw an opportunity when Steward — amid its bankruptcy — could no longer support TSAs for hospitals Quorum had acquired. He realized Quorum might be able to purchase the supporting business, including its infrastructure and staff.
By March 2024, Quorum had acquired those operations and about 650 employees, laying the foundation for a new rural-focused MSO.
“Through that acquisition, we now have the framework to stand up an MSO to support rural healthcare and support other operators struggling with rising costs, how to scale and how to better execute back-office administrative work,” Mr. Harrison said. “We hear so much about AI and innovation, but what you don’t hear is there’s not a lot of people wanting to do this type of back-office work. I think that’s where there’s a big gap in the market and where rural healthcare has a real need.”
Unlike traditional vendors, Quorum’s MSO is being built with an operator’s mindset.
“We’re not aiming for 20%, 25% margins on this,” Mr. Harrison said. “The goal is to offset the $50 million to $60 million we spend annually on IT and revenue cycle services and help others do the same.”
The MSO will initially support Quorum’s own 12 hospitals but leadership is already in active discussions with other rural health systems and independent hospitals. Mr. Harrison noted that several large rural operators are considering pooling their resources and rural health expertise to help scale the initiative collaboratively.
The timing is strategic. Quorum has improved its margin from negative territory in 2020 to low double digits in 2025.
Meanwhile, national focus on rural health equity is accelerating and a $50 billion Rural Health Transformation Fund is drawing interest from consultants and vendors. Mr. Harrison said his goal is to build something by rural providers, for rural providers, before outside entities with less mission alignment dominate the space.
The MSO’s core offerings will include:
- EHR support: Implementation and maintenance, often at lower cost than third-party vendors.
- Revenue cycle support: Front- and mid-cycle functions handled in-house; back-end collections may still be outsourced.
- IT infrastructure: Cybersecurity, help desk, systems access and server maintenance.
Mr. Harrison described the MSO as a group purchasing organization-style model for IT and RCM that delivers scale, efficiency and cost reduction across participating organizations.
“We think we can offer a compelling model at a much more effective cost than rural providers may get from some of the larger third parties and players,” he said.
