Bridge Realization Estimate
ML model predicts what fraction of the bridge is achievable (accuracy: 60%, n=5,839)
Expected realization: 72% of modeled bridge. Strengths: Occupancy Rate, Commercial Payer %. Risks: Bed Count. Risk-adjusted uplift: $28.1M (vs $39.0M 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 | $14.8M | $14.8M | $0 | 12mo |
| Denial Rate Reduction | 12.0% DEFAULT | 6.5% BENCHMARK | $14.3M | $408K | $14.7M | $0 | 12mo |
| A/R Days Reduction | 52.00 DEFAULT | 38.00 BENCHMARK | $2.3M | $6.7M | $9.0M | $28.4M | 9mo |
| Clean Claim Rate | 88.0% DEFAULT | 96.0% BENCHMARK | $0 | $474K | $474K | $0 | 6mo |
| Net Collection Rate | 93.5% DEFAULT | 32.7% 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 | $3.7M | $7.4M | $11.1M | $14.8M | $14.8M | $14.8M | $14.8M |
| Denial Rate Reduction | $0 | $3.7M | $7.3M | $11.0M | $14.7M | $14.7M | $14.7M | $14.7M |
| A/R Days Reduction | $0 | $3.0M | $6.0M | $9.0M | $9.0M | $9.0M | $9.0M | $9.0M |
| Clean Claim Rate | $0 | $237K | $474K | $474K | $474K | $474K | $474K | $474K |
| Cumulative | $0 | $10.6M | $21.2M | $31.6M | $39.0M | $39.0M | $39.0M | $39.0M |
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 $39.0M is added at exit.
| Entry \ Exit | 9.0x | 10.0x | 11.0x | 11.5x | 12.0x |
|---|---|---|---|---|---|
| 8.0x | 61% / 10.9x | 66% / 12.5x | 70% / 14.0x | 71% / 14.8x | 73% / 15.6x |
| 9.0x | 56% / 9.3x | 61% / 10.7x | 65% / 12.1x | 67% / 12.8x | 68% / 13.5x |
| 10.0x | 52% / 8.1x | 56% / 9.3x | 60% / 10.6x | 62% / 11.2x | 64% / 11.8x |
| 11.0x | 48% / 7.0x | 52% / 8.2x | 56% / 9.3x | 58% / 9.9x | 60% / 10.5x |
| 12.0x | 44% / 6.2x | 49% / 7.2x | 53% / 8.3x | 54% / 8.8x | 56% / 9.3x |
Covenant Headroom (at 10x Entry, 6.5x Max Leverage)
Pro forma EBITDA can decline 27% 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 | $50.3M | — | $50.3M | 6.8% |
| Year 1 | $51.8M | +$26.0M | $77.8M | 10.5% |
| Year 2 | $53.4M | +$39.0M | $92.4M | 12.5% |
| Year 3 | $55.0M | +$39.0M | $94.0M | 12.7% |
| Year 4 | $56.7M | +$39.0M | $95.6M | 12.9% |
| Year 5 | $58.4M | +$39.0M | $97.3M | 13.1% |
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 | $7.4M | $11.1M | $14.8M | $17.8M |
| Denial Rate Reductio | $7.3M | $11.0M | $14.7M | $17.6M |
| A/R Days Reduction | $4.5M | $6.8M | $9.0M | $10.8M |
| Clean Claim Rate | $237K | $356K | $474K | $569K |
| Total | $19.5M | $29.2M | $39.0M | $46.8M |
Peer Context — Where This Hospital Sits
Key metrics vs 1167 size-matched peers. Low percentile on margin/efficiency metrics = more room for improvement = larger bridge opportunity.
| Metric | Hospital | P25 | P50 | P75 | Percentile |
|---|---|---|---|---|---|
| Op Margin | 6.8% | -13.2% | -3.8% | 5.0% | P79 |
| Net-to-Gross | 25.8% | 18.8% | 25.3% | 32.7% | P52 |
| Occupancy | 76.9% | 59.5% | 70.9% | 79.2% | P69 |
| Rev/Bed | $1.8M | $1.2M | $1.5M | $2.1M | P66 |
| Exp/Bed | $1.7M | $1.1M | $1.6M | $2.2M | P58 |
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.