Early this year, prior to the launch of STRATUS, the WellPath Strategy and Real Estate Teams were tasked to find a location for a primary care practice in one of their outlying markets. When they began looking into possible sites, the leader of the medical practice group, Dr. Shelton, recommended a few parcels of land just outside one of their main service areas.
While the property was in the general service area they were targeting and the price was reasonable, the team wasn’t certain if this was the optimal location. They spent several months and dozens of meetings trying to come to a decision, but the majority of the discussion seemed to be based on gut instinct and local market influences, while the limited data points presented simply were not enough to give them the confidence they needed to pull the trigger.
The team was divided. The analysts felt fairly certain that the proposed parcels would not yield the volumes the business case stated was necessary, but the clinical leadership, led by Dr. Shelton, disagreed, stating that the property was in a new growth area, with private and municipal development plans in discussion that would lead to large growth in the near future.
In fact, Dr. Shelton, who had dabbled in commercial real estate over the last several years was sure that this was the right location at the right price. In his view, the analysts’ hesitance didn’t take into account his “gut feeling”, honed by years in medicine and a few successful real estate deals under his belt.
In his defense, it’s difficult to argue with emotion when objective facts are scarce and unconvincing.
It soon became clear that a part of Dr. Shelton’s insistence about Parcel 001-019-05 had a bit to do with the fact that the owner of the property was an old school mate of his. Despite this revelation, he remained adamant…and the team remained stuck, caught between a desire for data and someone in a powerful position who “didn’t need data”.
Luckily for the team, and for the organization, this all came to a head right around the time that STRATUS was launched at WellPath. After the whitespace analysis was complete, it became crystal clear that not only would this site not be optimal, but the team now had undeniable data stating that the site being proposed would have most likely resulted in an utter failure—something the practice could ill afford if they were going to continue on their growth trajectory.
With STRATUS, the Strategy and Real Estate teams were able to create a custom scenario for the site in minutes and compare it to other opportunities identified from the whitespace analysis. And, to ensure that they adequately addressed the claims about large growth in the area, the teams also created a custom scenario with inflated growth projections exceeding many times the highest national percentiles. Even under this scenario, the projected performance still remained well below other existing opportunities in the market.
During the next team meeting, the reports were brought in. There was some initial pushback from Dr. Shelton, but the facts were indisputable. The RES team was also present to answer the clinical team’s questions about the data and methodology, including assurances that growth in the area was already “baked in”.
While he was still not pleased with the result, Dr. Shelton wisely decided to re-route the discussion to a site that had been validated by STRATUS and progress resumed with the team presenting clear projections on volumes and staffing needs at the new location. With the assurance that this new practice was ultimately going to prove to be a success, Dr. Shelton’s mood brightened considerably and Parcel 001-019-05 was never mentioned again.
Over the last two weeks, the team has also been working closely together to narrow the whitespace analysis results to identify the next two practice locations where they can begin working on approval documents. And, with solid data that the whole team now trusts, the process is expected to move quickly to decision—something that will greatly help WellPath stay ahead of their competition in the market.