SURPRISE VALLEY HEALTH CARE DISTRICT
value-creation walk.
7-lever RCM bridge from current EBITDA to pro-forma — denial / underpay / DAR / coding / contract / cost discipline / cash acceleration. Each lever shows current vs benchmark target with data provenance.
Bridge Realization Estimate
ML model predicts what fraction of the bridge is achievable (accuracy: 60%, n=5,839)
Expected realization: 65% of modeled bridge. Strengths: Commercial Payer %, Bed Count. Risks: Occupancy Rate, Net-to-Gross Ratio. Risk-adjusted uplift: $0.4M (vs $0.6M modeled).
EBITDA Bridge — 7 RCM Levers
Each bar shows the annual EBITDA impact at full run-rate. Revenue levers increase top-line; cost levers reduce operating expense; cash acceleration releases working capital. Calibrated to published research bands (Denial 12%→5% = $8-15M on $400M NPR).
Lever Detail
Each value shows its data source. SELLER = seller data room, DEFAULT = model default, BENCHMARK = P75 peer benchmark.
| Lever | Current | Target | Revenue | Cost | EBITDA | WC | Ramp |
|---|---|---|---|---|---|---|---|
| Net Collection Rate | 93.5% DEFAULT | 97.0% BENCHMARK | $169K | $0 | $169K | $0 | 18mo |
| Denial Rate Reduction | 12.0% DEFAULT | 6.5% BENCHMARK | $155K | $8K | $163K | $0 | 12mo |
| Cost to Collect | 4.5% DEFAULT | 2.5% BENCHMARK | $0 | $161K | $161K | $0 | 12mo |
| A/R Days Reduction | 52.00 DEFAULT | 38.00 BENCHMARK | $25K | $73K | $98K | $309K | 9mo |
| Clean Claim Rate | 88.0% DEFAULT | 96.0% BENCHMARK | $0 | $10K | $10K | $0 | 6mo |
| CDI / Case Mix Index | 135.0% DEFAULT | 142.0% BENCHMARK | $0 | $0 | $0 | $0 | 18mo |
Implementation Timing Curve
Linear ramp to full run-rate per lever. Month 0 = close date. Partners should expect 60-70% of total uplift realized by month 12.
| Lever | M0 | M3 | M6 | M9 | M12 | M18 | M24 | M36 |
|---|---|---|---|---|---|---|---|---|
| Net Collection Rate | $0 | $28K | $56K | $84K | $113K | $169K | $169K | $169K |
| Denial Rate Reduction | $0 | $41K | $82K | $122K | $163K | $163K | $163K | $163K |
| Cost to Collect | $0 | $40K | $80K | $121K | $161K | $161K | $161K | $161K |
| A/R Days Reduction | $0 | $33K | $65K | $98K | $98K | $98K | $98K | $98K |
| Clean Claim Rate | $0 | $5K | $10K | $10K | $10K | $10K | $10K | $10K |
| Cumulative | $0 | $147K | $293K | $435K | $544K | $600K | $600K | $600K |
Returns Sensitivity (IRR / MOIC)
5-year hold, 5.5x leverage, 3% organic growth, 10%/yr debt paydown. Green = exceeds 20% IRR hurdle. Amber = 15-20%. Red = below hurdle or loss. RCM uplift of $600K is added at exit.
| Entry \ Exit | 9.0x | 10.0x | 11.0x | 11.5x | 12.0x |
|---|---|---|---|---|---|
| 8.0x | Loss | Loss | Loss | Loss | Loss |
| 9.0x | Loss | Loss | Loss | Loss | Loss |
| 10.0x | Loss | Loss | Loss | Loss | Loss |
| 11.0x | Loss | Loss | Loss | Loss | Loss |
| 12.0x | Loss | Loss | Loss | Loss | Loss |
Covenant Headroom (at 10x Entry, 6.5x Max Leverage)
Pro forma EBITDA can decline 0% before the 6.5x covenant trips. RCM uplift reduces leverage from 99.0x to 99.0x, adding 0.0 turns of cushion.
5-Year Value Creation Waterfall
EBITDA trajectory: 3% organic growth + RCM uplift ramp (full run-rate at month 18).
| Base EBITDA | RCM Uplift | Total | Margin | |
|---|---|---|---|---|
| Entry | $-2.8M | — | $-2.8M | -34.6% |
| Year 1 | $-2.9M | +$400K | $-2.5M | -30.7% |
| Year 2 | $-3.0M | +$600K | $-2.4M | -29.3% |
| Year 3 | $-3.0M | +$600K | $-2.4M | -30.4% |
| Year 4 | $-3.1M | +$600K | $-2.5M | -31.5% |
| Year 5 | $-3.2M | +$600K | $-2.6M | -32.7% |
Achievement Sensitivity
What if we only achieve a fraction of each lever? 50% = conservative, 75% = base management case, 100% = plan, 120% = stretch.
| Lever | 50% | 75% | 100% | 120% |
|---|---|---|---|---|
| Net Collection Rate | $84K | $127K | $169K | $203K |
| Denial Rate Reductio | $82K | $122K | $163K | $196K |
| Cost to Collect | $80K | $121K | $161K | $193K |
| A/R Days Reduction | $49K | $73K | $98K | $117K |
| Clean Claim Rate | $5K | $7K | $10K | $12K |
| Total | $300K | $450K | $600K | $720K |
Bridge Methodology
Coefficients calibrated to published research bands: denial 12%→5% = $8-15M on $400M NPR. Current metrics estimated from HCRIS public data and ML predictions. Target metrics set at P75 peer benchmarks with 60% gap closure assumption. Revenue levers use NPR × delta × avoidable share. Cost levers use claims volume × cost per reworked claim. Working capital from AR reduction is one-time cash (not included in recurring EBITDA). Returns assume 5.5x leverage, 3% organic growth, 10%/yr debt paydown.