When we last checked in on WellPath’s journey toward ambulatory transformation, Nick Massey, WellPath’s Director of Real Estate, discussed how STRATUS has effectively bridged the difficulties of blending operational strategy and site selection.  Now that STRATUS has enabled Nick and his colleagues to make tremendous headway toward gaining internal support to pursue specific sites in the market, WellPath is now facing additional financial and execution challenges that may prevent them from realizing their strategic objectives.

Let’s take an in-depth look into some of the internal communications that highlight these challenges and see how the use of STRATUS and WellPath’s collaboration with the RES Development team enabled WellPath to continue advancing their ambulatory optimization Initiatives.

INTERNAL MEMO

TO:       SENIOR MANAGEMENT TEAM

FROM: JAMES SINCLAIR, VP of OPERATIONS

RE:       NETWORK STRATEGY FOR MULTISPECIALTY FACILITIES

DATE: JULY 1, 2019

Senior Management Team,

My Operations team is nearly complete with preparation of our network strategy business case  recommending new outpatient facilities. Once scrubbed by finance, this package will be submitted to the Building, Land, and Technology Committee (“BLT”) for approval in October. It will then be submitted to the Executive Committee in January, prior to final Board approval in February.

The business case outlines 3 markets of interest – Cherry Hill, Greenway, and Montgomery.

  • As you’re aware, Cherry Hill and Greenway have been in our strategic plan for the past 2+ years, but we were unable to reach internal consensus until STRATUS was infused into our Strategic Planning Process earlier this year. We are planning a 30,000 SF urgent care and primary care facility in Cherry Hill and a 60,000 SF urgent care, primary care, multi-specialty, and diagnostic facility in Greenway. We have sites under contract for both projects that have been vetted by STRATUS’s projections.
  • Montgomery was identified by STRATUS and is new to our strategic plan. Ever since, we have been seeking solutions for a 45,000 SF urgent care, primary care, and multi-specialty clinic and are continuing to search for acceptable land.

As you know, the goal across our network is to establish the ideal number, service line mix and facility size, and ultimate placement of sites to achieve optimal network coverage, efficient deployment of resources, and maximum revenue. Additionally, this rollout will introduce a new programmatic approach for the development of new sites, utilize our new operational design prototypes, and be the first test of our new marketing and branding plan. This new approach will make us more convenient to our patients, more visible to our community, and promote innovative multi-functional spaces for our medical group physicians.

 

INTERNAL MEMO

TO: SENIOR MANAGEMENT TEAM

FROM: SUSAN VANDROSS, VP FINANCE

RE: NETWORK STRATEGY FOR MULTISPECIALTY FACILITIES

DATE: August 5, 2019

The finance team has reviewed the initial scope and budgets for the Cherry Hill, Greenway, and Montgomery ambulatory sites. As you are all aware, historically leadership has always insisted that the system maintains ownership of all real estate.

Following this directive, we have determined that WellPath can finance the Cherry Hill and Montgomery projects —with the caveat that Greenway must be reduced from 60,000 to 30,000 SF.

Unfortunately, we are unable to approve funding for the Montgomery project at this time.

 

INTERNAL MEMO

TO: SENIOR MANAGEMENT TEAM

FROM: SUSAN VANDROSS, VP FINANCE

RE: NETWORK STRATEGY FOR MULTISPECIALTY FACILITIES

DATE: August 29, 2019

In our last communication, we had determined that we could only approve 2 of the 3 proposed outpatient sites including a downsizing of one site due to a longtime policy of funding our own projects. However, this past week, we worked closely with members of the leadership team to review ROI and other market projections.  Upon completion of our review, it is apparent that all 3 sites are highly beneficial and there are distinct competitive advantages to pursuing them all at this time. As you know, our new CEO has dictated a new directive of prioritizing first-to-market opportunities.  Thus, our finance committee has agreed to pursue new financing and development strategies that would enable us to move forward on all projects and ensure we stay ahead of our competition.

 

INTERNAL MEMO

TO: SENIOR MANAGEMENT TEAM

FROM: NICK MASSEY, DIRECTOR OF REAL ESTATE

RE: NETWORK STRATEGY FOR MULTISPECIALTY FACILITIES

DATE: September 23, 2019

Great news, team! We have spent the last several weeks looking into ways to pursue the full 60,000 SF scope of the Greenway project in addition to the 45,000 SF project in Montgomery. I am happy to report that we have been in negotiations with the RES Development team and have agreed to terms that will enable both of these projects to move forward.  For Greenway, they have proposed to act as a 50/50 Joint Venture. For Montgomery, they were able to assemble and gain control of an off-market, 4-acre site and have proposed a 15-yr build-to-suit lease structure that meets the terms required by our Finance team. In two weeks, we will be submitting a letter of intent for each of the 3 projects to BLT for approval.

 

INTERNAL MEMO

TO: SENIOR MANAGEMENT TEAM

FROM: JAMES SINCLAIR, VP of OPERATIONS

RE: NETWORK STRATEGY FOR MULTISPECIALTY FACILITIES

DATE: September 24, 2019

Excellent work, everyone. This sounds like a great plan. As discussed during our meeting this morning, we’re on the agenda for the BLT meeting in two weeks so let’s wrap up the packages quickly as we need to move on these opportunities.

I’m certain BLT will appreciate the effectiveness of combining our new data-driven strategy with this progressive financing and development.

This will definitely be a compelling package!