ROXBURY PSYCHIATRIC 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: 71% of modeled bridge. Strengths: Occupancy Rate, Payer Diversity. Risks: Revenue per Bed, Commercial Payer %. Risk-adjusted uplift: $0.7M (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 | $368K | $368K | $0 | 12mo |
| Denial Rate Reduction | 12.0% DEFAULT | 6.5% BENCHMARK | $354K | $10K | $364K | $0 | 12mo |
| A/R Days Reduction | 52.00 DEFAULT | 38.00 BENCHMARK | $56K | $167K | $224K | $706K | 9mo |
| Clean Claim Rate | 88.0% DEFAULT | 96.0% BENCHMARK | $0 | $12K | $12K | $0 | 6mo |
| Net Collection Rate | 93.5% DEFAULT | 35.1% 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 |
|---|---|---|---|---|---|---|---|---|
| Cost to Collect | $0 | $92K | $184K | $276K | $368K | $368K | $368K | $368K |
| Denial Rate Reduction | $0 | $91K | $182K | $273K | $364K | $364K | $364K | $364K |
| A/R Days Reduction | $0 | $75K | $149K | $224K | $224K | $224K | $224K | $224K |
| Clean Claim Rate | $0 | $6K | $12K | $12K | $12K | $12K | $12K | $12K |
| Cumulative | $0 | $264K | $527K | $785K | $968K | $968K | $968K | $968K |
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 $968K is added at exit.
| Entry \ Exit | 9.0x | 10.0x | 11.0x | 11.5x | 12.0x |
|---|---|---|---|---|---|
| 8.0x | 47% / 6.8x | 51% / 7.9x | 55% / 9.0x | 57% / 9.5x | 59% / 10.1x |
| 9.0x | 41% / 5.6x | 46% / 6.6x | 50% / 7.6x | 52% / 8.1x | 54% / 8.6x |
| 10.0x | 37% / 4.8x | 41% / 5.6x | 46% / 6.5x | 47% / 7.0x | 49% / 7.4x |
| 11.0x | 32% / 4.0x | 37% / 4.8x | 41% / 5.6x | 43% / 6.0x | 45% / 6.5x |
| 12.0x | 28% / 3.4x | 33% / 4.2x | 37% / 4.9x | 39% / 5.3x | 41% / 5.6x |
Covenant Headroom (at 10x Entry, 6.5x Max Leverage)
Pro forma EBITDA can decline -8% before the 6.5x covenant trips. RCM uplift reduces leverage from 8.5x to 7.0x, adding 1.5 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 | $4.6M | — | $4.6M | 25.2% |
| Year 1 | $4.8M | +$646K | $5.4M | 29.5% |
| Year 2 | $4.9M | +$968K | $5.9M | 32.0% |
| Year 3 | $5.1M | +$968K | $6.0M | 32.8% |
| Year 4 | $5.2M | +$968K | $6.2M | 33.7% |
| Year 5 | $5.4M | +$968K | $6.4M | 34.5% |
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 | $368K | $442K |
| Denial Rate Reductio | $182K | $273K | $364K | $437K |
| A/R Days Reduction | $112K | $168K | $224K | $269K |
| Clean Claim Rate | $6K | $9K | $12K | $14K |
| Total | $484K | $726K | $968K | $1.2M |
Peer Context — Where This Hospital Sits
Key metrics vs 102 size-matched peers. Low percentile on margin/efficiency metrics = more room for improvement = larger bridge opportunity.
| Metric | Hospital | P25 | P50 | P75 | Percentile |
|---|---|---|---|---|---|
| Op Margin | 25.2% | -19.0% | -6.2% | 7.5% | P99 |
| Net-to-Gross | 34.9% | 17.5% | 26.3% | 35.1% | P73 |
| Occupancy | 78.2% | 39.6% | 59.0% | 76.2% | P76 |
| Rev/Bed | $164K | $477K | $801K | $1.3M | P2 |
| Exp/Bed | $123K | $441K | $942K | $1.4M | P0 |
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.