ASCENSION ST VINCENT SALEM
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: 57% of modeled bridge. Strengths: Bed Count. Risks: Occupancy Rate, Revenue per Bed. Risk-adjusted uplift: $0.6M (vs $1.0M 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 |
|---|---|---|---|---|---|---|---|
| Cost to Collect | 4.5% DEFAULT | 2.5% BENCHMARK | $0 | $369K | $369K | $0 | 12mo |
| Denial Rate Reduction | 12.0% DEFAULT | 6.5% BENCHMARK | $355K | $10K | $365K | $0 | 12mo |
| A/R Days Reduction | 52.00 DEFAULT | 38.00 BENCHMARK | $57K | $168K | $224K | $707K | 9mo |
| Clean Claim Rate | 88.0% DEFAULT | 96.0% BENCHMARK | $0 | $12K | $12K | $0 | 6mo |
| Net Collection Rate | 93.5% DEFAULT | 47.9% 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 |
|---|---|---|---|---|---|---|---|---|
| Cost to Collect | $0 | $92K | $184K | $276K | $369K | $369K | $369K | $369K |
| Denial Rate Reduction | $0 | $91K | $182K | $274K | $365K | $365K | $365K | $365K |
| A/R Days Reduction | $0 | $75K | $150K | $224K | $224K | $224K | $224K | $224K |
| Clean Claim Rate | $0 | $6K | $12K | $12K | $12K | $12K | $12K | $12K |
| Cumulative | $0 | $264K | $528K | $786K | $970K | $970K | $970K | $970K |
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 $970K is added at exit.
| Entry \ Exit | 9.0x | 10.0x | 11.0x | 11.5x | 12.0x |
|---|---|---|---|---|---|
| 8.0x | 78% / 18.0x | 83% / 20.3x | 87% / 22.7x | 89% / 23.9x | 90% / 25.1x |
| 9.0x | 73% / 15.6x | 78% / 17.7x | 82% / 19.8x | 84% / 20.9x | 85% / 21.9x |
| 10.0x | 69% / 13.7x | 73% / 15.6x | 77% / 17.5x | 79% / 18.4x | 81% / 19.4x |
| 11.0x | 65% / 12.2x | 69% / 13.9x | 73% / 15.6x | 75% / 16.5x | 77% / 17.3x |
| 12.0x | 61% / 10.9x | 66% / 12.5x | 70% / 14.0x | 71% / 14.8x | 73% / 15.6x |
Covenant Headroom (at 10x Entry, 6.5x Max Leverage)
Pro forma EBITDA can decline 53% before the 6.5x covenant trips. RCM uplift reduces leverage from 8.5x to 3.1x, adding 5.4 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 | $556K | — | $556K | 3.0% |
| Year 1 | $573K | +$646K | $1.2M | 6.6% |
| Year 2 | $590K | +$970K | $1.6M | 8.5% |
| Year 3 | $608K | +$970K | $1.6M | 8.6% |
| Year 4 | $626K | +$970K | $1.6M | 8.7% |
| Year 5 | $645K | +$970K | $1.6M | 8.8% |
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% |
|---|---|---|---|---|
| Cost to Collect | $184K | $276K | $369K | $442K |
| Denial Rate Reductio | $182K | $274K | $365K | $438K |
| A/R Days Reduction | $112K | $168K | $224K | $269K |
| Clean Claim Rate | $6K | $9K | $12K | $14K |
| Total | $485K | $727K | $970K | $1.2M |
Peer Context — Where This Hospital Sits
Key metrics vs 87 size-matched peers. Low percentile on margin/efficiency metrics = more room for improvement = larger bridge opportunity.
| Metric | Hospital | P25 | P50 | P75 | Percentile |
|---|---|---|---|---|---|
| Op Margin | 3.0% | -14.7% | -5.2% | 6.8% | P67 |
| Net-to-Gross | 29.0% | 29.6% | 33.4% | 47.9% | P22 |
| Occupancy | 2.7% | 25.9% | 36.4% | 58.2% | P0 |
| Rev/Bed | $737K | $620K | $1.4M | $2.0M | P29 |
| Exp/Bed | $715K | $726K | $1.6M | $2.6M | P23 |
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.