Framing the Clinic Expansion
A community health network is deciding whether to open a satellite clinic in a fast-growing suburb. The CFO frames it as a capital-allocation question: build for $2.1M, break even in year four, IRR of 9%. The medical director frames it as an access question: the suburb has 14,000 residents and the nearest clinic is 22 minutes away by car, with no public transit. The board chair frames it as a reputational question: the network's mission statement promises 'care within reach.' A consultant's memo warns that a competitor is rumored to be evaluating the same suburb. The network has $2.1M available but only enough operating cash to absorb one loss-making year. Two board members have publicly opposed any expansion, and one of them chairs the finance committee. The CEO wants a recommendation in six weeks.
1. Compare the three framings and assess what each one makes visible and what it hides.
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The CFO's capital-allocation frame makes visible the cost, payback period, and opportunity cost of the $2.1M; it hides the distributional question of who currently lacks access and the strategic value of a first-mover position. It also treats a 9% IRR as the whole answer, when the real constraint is the single loss-making year the network can absorb. The medical director's access frame makes visible the 14,000 residents, the 22-minute drive, and the absence of transit; it hides affordability - access without a viable payer mix can produce a clinic that closes in year two. The board chair's mission frame makes visible the network's identity and the reputational cost of inaction; it hides the fact that mission language can justify almost any project and provides no stopping rule. A good process does not pick one frame. It asks which frame answers the question the board must actually decide - here, whether the network can carry the operating risk of a single loss-making year - and then uses the other frames as constraints. The competitor rumor should be logged as an unverified input, not allowed to drive the timeline.
2. The CEO wants a recommendation in six weeks. Propose how to reframe the decision so the board can act, and identify the key test the recommendation must pass.
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Reframe from 'should we build?' to a sequenced choice: 'what is the smallest commitment that preserves the option while testing the two biggest unknowns - payer mix and competitor entry?' That reframing turns a binary into a staged decision. Concretely: a leased, staffed-to-minimum site with a contractual expansion trigger, or a partnership with an existing provider, at a fraction of $2.1M, with a go/no-go gate at month nine based on actual patient volume and payer mix. The key test the recommendation must pass is the downside test: if volume comes in 30% below forecast and the competitor enters, can the network still absorb the loss within its one-year operating cushion? If not, the staged option is the only responsible one regardless of IRR. Secondary tests: does the proposal state the specific evidence that would trigger abandonment, and does it survive the finance committee chair's scrutiny on cash rather than on mission language? Answering those in the memo converts an ideological standoff into a decision the board can actually make.