Choosing Between Two Expansion Proposals
Your 4-site primary care group is financially stable but has thin margins. Two proposals reach the board. Proposal A: open a fifth site in a fast-growing suburb, projected to break even in 24 months, requiring $1.2M in build-out and a new provider recruit who is hard to find. Proposal B: expand behavioral health and care management at existing sites, projected to break even in 18 months, requiring $400k and leveraging existing staff, but with uncertain reimbursement because the main payer has not finalized rates for collaborative care codes. The board chair favors A because 'growth is visible.' The CEO favors B. You are asked for a recommendation. Local data show 38% of your patients screen positive for depression or anxiety, and ED utilization is concentrated among a small group of high-need patients.
1. How do you structure the recommendation so it is defensible rather than a preference contest?
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Use a structured comparison against explicit criteria, not advocacy:
- Define decision criteria up front: strategic fit, financial return and risk, execution risk, patient need, and reversibility. Weight them with the board before scoring either option.
- Score both proposals on each criterion with the data you have:
- Need: 38% positive behavioral-health screens and concentrated ED use strongly favor B on patient need.
- Financial: A has a longer payback and higher capital; B has lower capital but reimbursement uncertainty.
- Execution: A depends on a hard-to-find recruit (single point of failure); B leverages existing staff.
- Reversibility: B is more reversible; A locks in $1.2M of build-out.
- Make uncertainty explicit: B's payer rates are unresolved - model best/base/worst cases. A's recruit timeline is unresolved - model a delayed-open scenario.
- Separate 'visible growth' from 'value': the chair's criterion is presentational, not financial; name that respectfully and ask the board to weigh it deliberately.
The judgment is converting a personality-driven choice into a transparent, criteria-based one where disagreements become about weights and assumptions, not turf.
2. The board asks you to 'just pick one.' What do you recommend, and how do you manage the risk you are accepting?
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Recommend B, with conditions and a staged commitment, because it better matches patient need, capital constraints, execution risk, and reversibility - while explicitly managing its main weakness (reimbursement uncertainty):
- Stage the investment: fund a pilot at two sites first, with go/no-go criteria tied to enrollment, reimbursement confirmation, and clinical outcomes.
- De-risk reimbursement: pursue the payer rate decision in parallel; do not scale until rates are confirmed or a bridge is secured.
- Preserve option value on A: keep the suburb site on the strategic roadmap and monitor the provider market, but do not commit $1.2M and a fragile recruit now.
- Set metrics: depression remission, care-management enrollment, ED visits among high-need patients, and payback.
Acknowledge the chair's concern directly: visible growth has value, and B can produce visible results (new services, improved access) without the capital lock-in. Document the recommendation, the assumptions, and the conditions so the decision is auditable. The tested judgment is choosing under uncertainty with staged, reversible commitments rather than an all-or-nothing bet.