April 2024

Nothing moved quickly once the documents went out. That was the first real adjustment James had to make. The early conversations had created a sense of direction, maybe even momentum, but once the financials were in their hands, everything slowed to the pace of scrutiny.

Requests came in layers. First high level, then more specific, then the same questions again but phrased differently, as if they were testing whether the answers would hold. James didn’t push. He had been on the other side of this often enough to recognize the rhythm. You don’t accelerate diligence. You survive it.

Elise managed most of the flow. She translated what they were asking into something that could actually be answered, then shaped the responses so they wouldn’t be misread. She removed noise without hiding complexity, which was harder than it sounded.

“They’re going to focus on what they don’t understand,” she told him one afternoon as they reviewed another round of questions. “Not because they think something is wrong, but because uncertainty looks like risk to them.”

“It is risk,” James said.

“It is, but not always the kind they think it is,” she replied. “They’ll try to flatten it. That’s what models do.”

He nodded. “And it won’t flatten.”

“No,” she said. “It won’t.”

By mid-April, they scheduled a longer call. Fewer people this time. The medical director, the operations lead, their finance analyst, Elise, and James. Michael had reviewed the materials separately and didn’t join, which James preferred. This wasn’t a legal conversation yet. It was interpretation.

The operations lead started. “We’ve gone through the financials in detail. There are a few areas we need to understand better before we can finalize our assumptions.”

James said nothing. He had learned that answering too early only created more questions.

“There’s variability,” she continued. “Month to month, both in volume and revenue per case. It’s not trending in a straight line.”

“It never has,” James said.

The finance analyst spoke next. “Can you explain the spikes in Q3 last year? There’s a jump that doesn’t appear tied to a seasonal pattern.”

“That was a single client increasing volume temporarily,” James said. “They were between pathologists at their usual lab. It corrected the following quarter.”

“So that’s not recurring,” the analyst said.

“No.”

“And the drop in January this year?”

“Two high-volume dermatologists reduced submissions. One moved part of their work in-house. The other shifted payer mix.”

The analyst nodded but didn’t look convinced. “So both volume and reimbursement are sensitive to individual relationships.”

“Yes,” James said. “That’s the structure.”

The operations lead glanced at her notes. “That’s what concerns us from a modeling standpoint.”

James leaned back slightly. “You’re trying to normalize something that isn’t normalized.”

“We’re trying to forecast,” she said.

“You can forecast volume,” he replied. “You can’t forecast behavior.”

There was a pause. Not tense, but it held weight.

The medical director stepped in. “Help us understand how stable your client base is.”

James thought about the question. It sounded simple, but it wasn’t.

“It’s stable as long as the relationships are intact,” he said. “It’s not contract-based stability. It’s relational stability. That’s harder to measure, but it’s not random.”

“And if the relationship changes?” the analyst asked.

“Then the volume changes,” James said. “Sometimes quickly.”

Another pause. This one longer.

The operations lead shifted the conversation. “Based on what we’re seeing, we’re not ready to commit to adding another dermatopathologist immediately.”

James didn’t react. He had expected that.

“Not at this stage,” she added.

He looked at her. “What would need to change for that to happen?”

“We’d need to see sustained volume post-transition,” she said. “Not projected. Actual.”

“And during that period?” he asked.

“We would manage within current capacity.”

James held her gaze. “With one dermatopathologist.”

“Yes.”

“Handling an increase in volume.”

“Yes.”

He nodded slowly. “Turnaround time will be affected.”

The medical director didn’t answer right away. “We’ll monitor it closely.”

“That’s not the same as preventing it,” James said.

“No,” he agreed. “It’s not.”

The room quieted. No one disagreed, but no one offered an alternative.

Elise spoke then, her voice even. “If turnaround degrades, what’s your threshold for adding capacity?”

The operations lead glanced at the medical director. He answered. “We would evaluate based on sustained backlog and client feedback.”

“How long does that evaluation take?” Elise asked.

“Case by case,” he said.

“That’s not specific,” she replied.

“It can’t be,” he said. “We don’t have enough data yet.”

Elise didn’t push further. She had made the point.

James watched the exchange. He understood what was happening. They were not wrong. They were protecting themselves. But the protection created a lag, and that lag would be felt somewhere.

He shifted the discussion. “Staffing.”

The operations lead nodded. “We’d like to begin interviews.”

“When?” James asked.

“Within the next two to three weeks.”

“In Carson?”

“Yes.”

James thought about the drive. About who could make it work. About who couldn’t.

“You’ll need to schedule carefully,” he said. “Some of them won’t be able to take full days off easily.”

“We can stagger interviews,” she said. “Half-day blocks.”

“That will help.”

“And we’ll be clear about roles and compensation before any offers,” she added.

“Before execution?” Elise asked.

“Yes.”

Elise nodded once. “Good.”

James continued. “Devon should be among the first you meet.”

The medical director didn’t hesitate. “Agreed.”

“His role needs to be defined before anything moves forward,” James said.

“It will be discussed,” the operations lead replied.

“Defined,” James repeated.

She met his eyes. “Defined.”

That was as close to a commitment as they were going to give.

Equipment came next. The list was shorter than James had hoped, but not surprising. Processors, selected microscopes, some ancillary pieces. The rest they didn’t need or didn’t want to integrate.

“These numbers reflect current secondary market value,” the operations lead said.

James looked at the page. “They reflect replacement avoidance, not value.”

She didn’t argue. “We’re not valuing the practice.”

“I know,” he said.

He let it go. That wasn’t where this would be decided.

The call ran longer than planned. When it ended, there was no conclusion, but there was structure. Timelines. Next steps. Interviews. Additional data requests.

Elise stayed on the line after the others disconnected.

“They’re slower than you expected,” she said.

“They’re exactly as slow as they need to be,” James replied.

“They’re not committing to capacity,” she said.

“No.”

“They’re waiting for your volume to prove itself inside their system.”

“Yes.”

“And if it doesn’t behave the way they expect?”

James didn’t answer immediately. He looked at the notes in front of him. Numbers, names, questions that had no clean answers.

“They’ll adapt,” he said.

“How?” she asked.

He didn’t answer. Because he already knew. Longer days. Delayed sign-outs. Quiet pressure that wouldn’t show up in any report until someone complained.

“They’re not wrong,” Elise said.

“No,” James agreed. “They’re not.”

“They’re just early in the curve.”

“Yes.”

She paused. “And you’re further along.”

He gave a small nod. “I’ve already seen what happens when capacity lags.”

Elise closed her laptop. “You’re still going forward.”

It wasn’t a question.

“Yes.”

She watched him for a moment. “Then we control what we can,” she said.

“And accept what we can’t,” he replied.

She didn’t respond. She didn’t need to. The call ended.

James sat alone for a while. He opened the financials again, not because he needed to review them, but because he wanted to see them the way they saw them. As numbers. As patterns. As something that could be modeled if you believed enough in the model. He understood why they hesitated. What they didn’t understand yet was how those numbers behaved under pressure.

He closed the file and leaned back. The deal was still moving. Slower than before. More defined. Less forgiving. He wrote one more note at the bottom of the page. Capacity will be tested, not assumed. Then he set the pen down and sat quietly, knowing that whatever happened next would not be decided in a meeting.

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