Bridge Realization Estimate
ML model predicts what fraction of the bridge is achievable (accuracy: 60%, n=5,839)
Expected realization: 80% of modeled bridge. Strengths: Revenue per Bed, Occupancy Rate. Risks: Bed Count. Risk-adjusted uplift: $94.4M (vs $118.5M 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 | $45.0M | $45.0M | $0 | 12mo |
| Denial Rate Reduction | 12.0% DEFAULT | 6.5% BENCHMARK | $43.4M | $1.2M | $44.6M | $0 | 12mo |
| A/R Days Reduction | 52.00 DEFAULT | 38.00 BENCHMARK | $6.9M | $20.5M | $27.4M | $86.4M | 9mo |
| Clean Claim Rate | 88.0% DEFAULT | 96.0% BENCHMARK | $0 | $1.4M | $1.4M | $0 | 6mo |
| Net Collection Rate | 93.5% DEFAULT | 27.7% 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 | $11.3M | $22.5M | $33.8M | $45.0M | $45.0M | $45.0M | $45.0M |
| Denial Rate Reduction | $0 | $11.1M | $22.3M | $33.4M | $44.6M | $44.6M | $44.6M | $44.6M |
| A/R Days Reduction | $0 | $9.1M | $18.3M | $27.4M | $27.4M | $27.4M | $27.4M | $27.4M |
| Clean Claim Rate | $0 | $721K | $1.4M | $1.4M | $1.4M | $1.4M | $1.4M | $1.4M |
| Cumulative | $0 | $32.3M | $64.5M | $96.1M | $118.5M | $118.5M | $118.5M | $118.5M |
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 $118.5M is added at exit.
| Entry \ Exit | 9.0x | 10.0x | 11.0x | 11.5x | 12.0x |
|---|---|---|---|---|---|
| 8.0x | 100% / 32.0x | 105% / 35.9x | 109% / 39.8x | 111% / 41.8x | 113% / 43.8x |
| 9.0x | 95% / 28.1x | 99% / 31.6x | 104% / 35.0x | 106% / 36.8x | 108% / 38.5x |
| 10.0x | 90% / 24.9x | 95% / 28.1x | 99% / 31.2x | 101% / 32.8x | 103% / 34.4x |
| 11.0x | 86% / 22.4x | 91% / 25.2x | 95% / 28.1x | 97% / 29.5x | 99% / 30.9x |
| 12.0x | 83% / 20.2x | 87% / 22.9x | 91% / 25.5x | 93% / 26.8x | 95% / 28.1x |
Covenant Headroom (at 10x Entry, 6.5x Max Leverage)
Pro forma EBITDA can decline 72% before the 6.5x covenant trips. RCM uplift reduces leverage from 8.5x to 1.8x, adding 6.6 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 | $32.4M | — | $32.4M | 1.4% |
| Year 1 | $33.3M | +$79.0M | $112.3M | 5.0% |
| Year 2 | $34.3M | +$118.5M | $152.8M | 6.8% |
| Year 3 | $35.4M | +$118.5M | $153.8M | 6.8% |
| Year 4 | $36.4M | +$118.5M | $154.9M | 6.9% |
| Year 5 | $37.5M | +$118.5M | $156.0M | 6.9% |
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% |
|---|---|---|---|---|
| Cost to Collect | $22.5M | $33.8M | $45.0M | $54.1M |
| Denial Rate Reductio | $22.3M | $33.4M | $44.6M | $53.5M |
| A/R Days Reduction | $13.7M | $20.6M | $27.4M | $32.9M |
| Clean Claim Rate | $721K | $1.1M | $1.4M | $1.7M |
| Total | $59.2M | $88.9M | $118.5M | $142.2M |
Peer Context — Where This Hospital Sits
Key metrics vs 32 size-matched peers. Low percentile on margin/efficiency metrics = more room for improvement = larger bridge opportunity.
| Metric | Hospital | P25 | P50 | P75 | Percentile |
|---|---|---|---|---|---|
| Op Margin | 1.4% | -3.3% | 0.1% | 7.4% | P55 |
| Net-to-Gross | 43.0% | 16.2% | 20.7% | 27.7% | P90 |
| Occupancy | 82.1% | 59.2% | 69.8% | 78.7% | P81 |
| Rev/Bed | $7.1M | $1.3M | $1.6M | $2.0M | P97 |
| Exp/Bed | $7.0M | $1.1M | $1.4M | $2.0M | P97 |
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.