Bridge Realization Estimate
ML model predicts what fraction of the bridge is achievable (accuracy: 60%, n=5,839)
Expected realization: 74% of modeled bridge. Strengths: Revenue per Bed, Occupancy Rate. Risks: Net-to-Gross Ratio, Bed Count. Risk-adjusted uplift: $72.0M (vs $96.7M 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 | $36.7M | $36.7M | $0 | 12mo |
| Denial Rate Reduction | 12.0% DEFAULT | 6.5% BENCHMARK | $35.4M | $1.0M | $36.4M | $0 | 12mo |
| A/R Days Reduction | 52.00 DEFAULT | 38.00 BENCHMARK | $5.6M | $16.7M | $22.4M | $70.5M | 9mo |
| Clean Claim Rate | 88.0% DEFAULT | 96.0% BENCHMARK | $0 | $1.2M | $1.2M | $0 | 6mo |
| Net Collection Rate | 93.5% DEFAULT | 27.1% 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 | $9.2M | $18.4M | $27.6M | $36.7M | $36.7M | $36.7M | $36.7M |
| Denial Rate Reduction | $0 | $9.1M | $18.2M | $27.3M | $36.4M | $36.4M | $36.4M | $36.4M |
| A/R Days Reduction | $0 | $7.5M | $14.9M | $22.4M | $22.4M | $22.4M | $22.4M | $22.4M |
| Clean Claim Rate | $0 | $588K | $1.2M | $1.2M | $1.2M | $1.2M | $1.2M | $1.2M |
| Cumulative | $0 | $26.3M | $52.6M | $78.4M | $96.7M | $96.7M | $96.7M | $96.7M |
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 $96.7M is added at exit.
| Entry \ Exit | 9.0x | 10.0x | 11.0x | 11.5x | 12.0x |
|---|---|---|---|---|---|
| 8.0x | 42% / 5.7x | 46% / 6.7x | 50% / 7.7x | 52% / 8.2x | 54% / 8.7x |
| 9.0x | 36% / 4.7x | 41% / 5.6x | 45% / 6.5x | 47% / 6.9x | 49% / 7.4x |
| 10.0x | 31% / 3.9x | 36% / 4.7x | 41% / 5.5x | 43% / 5.9x | 45% / 6.3x |
| 11.0x | 27% / 3.3x | 32% / 4.0x | 36% / 4.7x | 38% / 5.1x | 40% / 5.4x |
| 12.0x | 22% / 2.7x | 28% / 3.4x | 32% / 4.1x | 34% / 4.4x | 36% / 4.7x |
Covenant Headroom (at 10x Entry, 6.5x Max Leverage)
Pro forma EBITDA can decline -22% before the 6.5x covenant trips. RCM uplift reduces leverage from 8.5x to 7.9x, adding 0.5 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 | $1.45B | — | $1.45B | 79.2% |
| Year 1 | $1.50B | +$64.4M | $1.56B | 85.1% |
| Year 2 | $1.54B | +$96.7M | $1.64B | 89.3% |
| Year 3 | $1.59B | +$96.7M | $1.69B | 91.8% |
| Year 4 | $1.64B | +$96.7M | $1.73B | 94.4% |
| Year 5 | $1.69B | +$96.7M | $1.78B | 97.0% |
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 | $18.4M | $27.6M | $36.7M | $44.1M |
| Denial Rate Reductio | $18.2M | $27.3M | $36.4M | $43.7M |
| A/R Days Reduction | $11.2M | $16.8M | $22.4M | $26.8M |
| Clean Claim Rate | $588K | $882K | $1.2M | $1.4M |
| Total | $48.3M | $72.5M | $96.7M | $116.0M |
Peer Context — Where This Hospital Sits
Key metrics vs 31 size-matched peers. Low percentile on margin/efficiency metrics = more room for improvement = larger bridge opportunity.
| Metric | Hospital | P25 | P50 | P75 | Percentile |
|---|---|---|---|---|---|
| Op Margin | 79.2% | -3.5% | -0.3% | 6.3% | P97 |
| Net-to-Gross | 100.0% | 16.2% | 20.5% | 27.1% | P93 |
| Occupancy | 72.5% | 58.9% | 67.1% | 78.2% | P52 |
| Rev/Bed | $5.8M | $1.3M | $1.6M | $2.1M | P93 |
| Exp/Bed | $1.2M | $1.1M | $1.4M | $2.0M | P32 |
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.