JOHNSON COUNTY COMMUNITY 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: 65% of modeled bridge. Strengths: Revenue per Bed, Bed Count. Risks: Occupancy Rate. Risk-adjusted uplift: $0.5M (vs $0.8M 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 | $221K | $0 | $221K | $0 | 18mo |
| Denial Rate Reduction | 12.0% DEFAULT | 6.5% BENCHMARK | $203K | $8K | $211K | $0 | 12mo |
| Cost to Collect | 4.5% DEFAULT | 2.5% BENCHMARK | $0 | $210K | $210K | $0 | 12mo |
| A/R Days Reduction | 52.00 DEFAULT | 38.00 BENCHMARK | $32K | $96K | $128K | $404K | 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 | $37K | $74K | $111K | $147K | $221K | $221K | $221K |
| Denial Rate Reduction | $0 | $53K | $105K | $158K | $211K | $211K | $211K | $211K |
| Cost to Collect | $0 | $53K | $105K | $158K | $210K | $210K | $210K | $210K |
| A/R Days Reduction | $0 | $43K | $85K | $128K | $128K | $128K | $128K | $128K |
| Clean Claim Rate | $0 | $5K | $10K | $10K | $10K | $10K | $10K | $10K |
| Cumulative | $0 | $190K | $379K | $564K | $706K | $780K | $780K | $780K |
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 $780K is added at exit.
| Entry \ Exit | 9.0x | 10.0x | 11.0x | 11.5x | 12.0x |
|---|---|---|---|---|---|
| 8.0x | 115% / 46.2x | 120% / 51.8x | 125% / 57.2x | 127% / 60.0x | 129% / 62.8x |
| 9.0x | 110% / 40.8x | 115% / 45.6x | 119% / 50.5x | 121% / 53.0x | 123% / 55.4x |
| 10.0x | 105% / 36.4x | 110% / 40.8x | 114% / 45.1x | 116% / 47.4x | 118% / 49.5x |
| 11.0x | 101% / 32.8x | 106% / 36.8x | 110% / 40.8x | 112% / 42.8x | 114% / 44.8x |
| 12.0x | 97% / 29.8x | 102% / 33.4x | 106% / 37.1x | 108% / 38.9x | 110% / 40.8x |
Covenant Headroom (at 10x Entry, 6.5x Max Leverage)
Pro forma EBITDA can decline 80% before the 6.5x covenant trips. RCM uplift reduces leverage from 8.5x to 1.3x, adding 7.2 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 | $139K | — | $139K | 1.3% |
| Year 1 | $143K | +$520K | $663K | 6.3% |
| Year 2 | $148K | +$780K | $928K | 8.8% |
| Year 3 | $152K | +$780K | $932K | 8.9% |
| Year 4 | $157K | +$780K | $937K | 8.9% |
| Year 5 | $161K | +$780K | $941K | 8.9% |
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 | $111K | $166K | $221K | $265K |
| Denial Rate Reductio | $105K | $158K | $211K | $253K |
| Cost to Collect | $105K | $158K | $210K | $253K |
| A/R Days Reduction | $64K | $96K | $128K | $154K |
| Clean Claim Rate | $5K | $7K | $10K | $12K |
| Total | $390K | $585K | $780K | $936K |
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.