SOUTH FLORIDA STATE HOSPITAL
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: 75% of modeled bridge. Strengths: Occupancy Rate, Commercial Payer %. Risks: Revenue per Bed, Net-to-Gross Ratio. Risk-adjusted uplift: $0.1M (vs $0.1M 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 |
|---|---|---|---|---|---|---|---|
| Denial Rate Reduction | 12.0% DEFAULT | 6.5% BENCHMARK | $34K | $8K | $42K | $0 | 12mo |
| Cost to Collect | 4.5% DEFAULT | 2.5% BENCHMARK | $0 | $35K | $35K | $0 | 12mo |
| A/R Days Reduction | 52.00 DEFAULT | 38.00 BENCHMARK | $5K | $16K | $22K | $68K | 9mo |
| Clean Claim Rate | 88.0% DEFAULT | 96.0% BENCHMARK | $0 | $10K | $10K | $0 | 6mo |
| Net Collection Rate | 93.5% DEFAULT | 51.1% BENCHMARK | $0 | $0 | $0 | $0 | 18mo |
| 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 |
|---|---|---|---|---|---|---|---|---|
| Denial Rate Reduction | $0 | $11K | $21K | $32K | $42K | $42K | $42K | $42K |
| Cost to Collect | $0 | $9K | $18K | $27K | $35K | $35K | $35K | $35K |
| A/R Days Reduction | $0 | $7K | $14K | $22K | $22K | $22K | $22K | $22K |
| Clean Claim Rate | $0 | $5K | $10K | $10K | $10K | $10K | $10K | $10K |
| Cumulative | $0 | $31K | $63K | $90K | $109K | $109K | $109K | $109K |
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 $109K is added at exit.
| Entry \ Exit | 9.0x | 10.0x | 11.0x | 11.5x | 12.0x |
|---|---|---|---|---|---|
| 8.0x | 61% / 10.8x | 66% / 12.4x | 69% / 14.0x | 71% / 14.8x | 73% / 15.6x |
| 9.0x | 56% / 9.3x | 61% / 10.7x | 65% / 12.1x | 66% / 12.8x | 68% / 13.5x |
| 10.0x | 52% / 8.0x | 56% / 9.3x | 60% / 10.5x | 62% / 11.2x | 64% / 11.8x |
| 11.0x | 48% / 7.0x | 52% / 8.1x | 56% / 9.3x | 58% / 9.8x | 60% / 10.4x |
| 12.0x | 44% / 6.2x | 48% / 7.2x | 52% / 8.2x | 54% / 8.8x | 56% / 9.3x |
Covenant Headroom (at 10x Entry, 6.5x Max Leverage)
Pro forma EBITDA can decline 26% before the 6.5x covenant trips. RCM uplift reduces leverage from 8.5x to 4.8x, adding 3.7 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 | $142K | — | $142K | 8.0% |
| Year 1 | $146K | +$73K | $219K | 12.3% |
| Year 2 | $150K | +$109K | $259K | 14.6% |
| Year 3 | $155K | +$109K | $264K | 14.9% |
| Year 4 | $160K | +$109K | $269K | 15.2% |
| Year 5 | $164K | +$109K | $273K | 15.4% |
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% |
|---|---|---|---|---|
| Denial Rate Reductio | $21K | $32K | $42K | $51K |
| Cost to Collect | $18K | $27K | $35K | $43K |
| A/R Days Reduction | $11K | $16K | $22K | $26K |
| Clean Claim Rate | $5K | $7K | $10K | $12K |
| Total | $54K | $82K | $109K | $131K |
Peer Context — Where This Hospital Sits
Key metrics vs 96 size-matched peers. Low percentile on margin/efficiency metrics = more room for improvement = larger bridge opportunity.
| Metric | Hospital | P25 | P50 | P75 | Percentile |
|---|---|---|---|---|---|
| Op Margin | -50.0% | -14.5% | 4.3% | 11.8% | P0 |
| Net-to-Gross | 100.0% | 15.8% | 28.7% | 51.1% | P98 |
| Occupancy | 99.2% | 46.8% | 60.6% | 81.5% | P98 |
| Rev/Bed | $35K | $245K | $502K | $940K | P1 |
| Exp/Bed | $785K | $299K | $518K | $933K | P70 |
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.