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Can CAH's MSO Expansion Unlock Growth in Specialty Care Delivery?
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Key Takeaways
Cardinal Health expects MSO platforms to contribute to growth in fiscal 2027, boosted by Solaris.
CAH's MSOs span fragmented markets, including urology, GI, oncology and autoimmune care.
Cardinal Health plans to expand its MSO services and integrate them with its broader Specialty ecosystem.
Cardinal Health (CAH - Free Report) is increasingly using its multi-specialty management services organization (MSO) strategy to expand its presence in specialty care delivery. The company expects its MSO platforms to contribute to growth in fiscal 2027, with the recently completed Solaris acquisition providing an incremental contribution before Cardinal Health reaches the acquisition anniversary in the second quarter of fiscal 2027.
The strategy extends beyond urology. Cardinal Health has invested significantly in MSOs serving autoimmune care, including gastroenterology (GI), oncology and urology. Management noted that while the company has achieved meaningful scale, particularly in urology and GI, these markets remain highly fragmented, leaving substantial room to expand physician networks and scale operations.
Cardinal Health is not focused solely on adding practices. Management intends to expand the services provided through its MSOs, creating greater capabilities for physicians and patients. The company sees these specialized and fragmented markets as opportunities to build scale while improving service delivery.
The MSO strategy also aligns with Cardinal Health’s broader Specialty ecosystem. Management said its MSOs, Biopharma Solutions and associated services are contributing to broad-based growth, with the different parts of the business increasingly working together to improve products and services for customers and patients.
This integrated model could help Cardinal Health increase access to specialty therapies by combining physician-facing capabilities with its broader specialty infrastructure. The company specifically views expanding MSOs and the services attached to them as significant opportunities.
Peer Updates
McKesson (MCK - Free Report) is expanding its MSO and practice-management capabilities by deepening its oncology and multispecialty platform. MCK now serves more than 14,000 providers across community-based specialties, while the US Oncology Network has grown to approximately 3,400 providers who cumulatively treat more than 2 million patients annually.
PRISM Vision adds more than 200 providers across 97 locations, extending McKesson’s physician network into retina and ophthalmology. The company expects continued provider additions to drive growth across practice management, GPO services, data and analytics, and clinical research support. By integrating these capabilities with specialty distribution, McKesson can strengthen physician relationships while expanding community-based patient access.
Cencora (COR - Free Report) is building its MSO strategy around oncology and retina practices, using management services to help physicians navigate access, reimbursement and administrative complexity while maintaining a community-based care model. Cencora’s OneOncology and RCA platforms performed ahead of expectations in the third quarter, with OneOncology demonstrating an ability to attract physicians to the MSO platform.
Management outlined three phases of value creation — integrating MSOs into Cencora, sharing capabilities such as clinical-trial resources, and developing new services including analytics and insights. Cencora also plans to expand physician networks through tuck-in acquisitions and individual physician additions, creating opportunities to broaden specialty services and patient access.
CAH’s Price Performance, Valuation and Estimates
Shares of CAH have gained 9.8% so far this year compared with the industry’s 2.2% growth.
Image Source: Zacks Investment Research
From a valuation standpoint, Cardinal Health trades at a forward price-to-earnings of 17.55X, above the industry average. However, it is trading lower than its five-year high of 22.19X. CAH carries a Value Score of A.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for Cardinal Health’s fiscal 2027 earnings implies an 11.5% rise from the year-ago reported number.
View the Zacks #1 Rank List
Image: Bigstock
Can CAH's MSO Expansion Unlock Growth in Specialty Care Delivery?
Key Takeaways
Cardinal Health (CAH - Free Report) is increasingly using its multi-specialty management services organization (MSO) strategy to expand its presence in specialty care delivery. The company expects its MSO platforms to contribute to growth in fiscal 2027, with the recently completed Solaris acquisition providing an incremental contribution before Cardinal Health reaches the acquisition anniversary in the second quarter of fiscal 2027.
The strategy extends beyond urology. Cardinal Health has invested significantly in MSOs serving autoimmune care, including gastroenterology (GI), oncology and urology. Management noted that while the company has achieved meaningful scale, particularly in urology and GI, these markets remain highly fragmented, leaving substantial room to expand physician networks and scale operations.
Cardinal Health is not focused solely on adding practices. Management intends to expand the services provided through its MSOs, creating greater capabilities for physicians and patients. The company sees these specialized and fragmented markets as opportunities to build scale while improving service delivery.
The MSO strategy also aligns with Cardinal Health’s broader Specialty ecosystem. Management said its MSOs, Biopharma Solutions and associated services are contributing to broad-based growth, with the different parts of the business increasingly working together to improve products and services for customers and patients.
This integrated model could help Cardinal Health increase access to specialty therapies by combining physician-facing capabilities with its broader specialty infrastructure. The company specifically views expanding MSOs and the services attached to them as significant opportunities.
Peer Updates
McKesson (MCK - Free Report) is expanding its MSO and practice-management capabilities by deepening its oncology and multispecialty platform. MCK now serves more than 14,000 providers across community-based specialties, while the US Oncology Network has grown to approximately 3,400 providers who cumulatively treat more than 2 million patients annually.
PRISM Vision adds more than 200 providers across 97 locations, extending McKesson’s physician network into retina and ophthalmology. The company expects continued provider additions to drive growth across practice management, GPO services, data and analytics, and clinical research support. By integrating these capabilities with specialty distribution, McKesson can strengthen physician relationships while expanding community-based patient access.
Cencora (COR - Free Report) is building its MSO strategy around oncology and retina practices, using management services to help physicians navigate access, reimbursement and administrative complexity while maintaining a community-based care model. Cencora’s OneOncology and RCA platforms performed ahead of expectations in the third quarter, with OneOncology demonstrating an ability to attract physicians to the MSO platform.
Management outlined three phases of value creation — integrating MSOs into Cencora, sharing capabilities such as clinical-trial resources, and developing new services including analytics and insights. Cencora also plans to expand physician networks through tuck-in acquisitions and individual physician additions, creating opportunities to broaden specialty services and patient access.
CAH’s Price Performance, Valuation and Estimates
Shares of CAH have gained 9.8% so far this year compared with the industry’s 2.2% growth.
Image Source: Zacks Investment Research
From a valuation standpoint, Cardinal Health trades at a forward price-to-earnings of 17.55X, above the industry average. However, it is trading lower than its five-year high of 22.19X. CAH carries a Value Score of A.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for Cardinal Health’s fiscal 2027 earnings implies an 11.5% rise from the year-ago reported number.
Image Source: Zacks Investment Research
The company currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.