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, Revenue per Bed. Risks: Bed Count. Risk-adjusted uplift: $50.4M (vs $71.5M 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 | $27.2M | $27.2M | $0 | 12mo |
| Denial Rate Reduction | 12.0% DEFAULT | 6.5% BENCHMARK | $26.2M | $747K | $26.9M | $0 | 12mo |
| A/R Days Reduction | 52.00 DEFAULT | 38.00 BENCHMARK | $4.2M | $12.4M | $16.5M | $52.1M | 9mo |
| Clean Claim Rate | 88.0% DEFAULT | 96.0% BENCHMARK | $0 | $870K | $870K | $0 | 6mo |
| Net Collection Rate | 93.5% DEFAULT | 29.2% 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 | $6.8M | $13.6M | $20.4M | $27.2M | $27.2M | $27.2M | $27.2M |
| Denial Rate Reduction | $0 | $6.7M | $13.5M | $20.2M | $26.9M | $26.9M | $26.9M | $26.9M |
| A/R Days Reduction | $0 | $5.5M | $11.0M | $16.5M | $16.5M | $16.5M | $16.5M | $16.5M |
| Clean Claim Rate | $0 | $435K | $870K | $870K | $870K | $870K | $870K | $870K |
| Cumulative | $0 | $19.5M | $38.9M | $58.0M | $71.5M | $71.5M | $71.5M | $71.5M |
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 $71.5M is added at exit.
| Entry \ Exit | 9.0x | 10.0x | 11.0x | 11.5x | 12.0x |
|---|---|---|---|---|---|
| 8.0x | 143% / 83.9x | 148% / 93.6x | 153% / 103.3x | 155% / 108.2x | 157% / 113.0x |
| 9.0x | 137% / 74.3x | 142% / 82.9x | 147% / 91.5x | 149% / 95.8x | 151% / 100.1x |
| 10.0x | 132% / 66.5x | 137% / 74.3x | 141% / 82.0x | 144% / 85.9x | 146% / 89.8x |
| 11.0x | 127% / 60.2x | 132% / 67.2x | 137% / 74.3x | 139% / 77.8x | 141% / 81.3x |
| 12.0x | 123% / 54.9x | 128% / 61.3x | 132% / 67.8x | 135% / 71.0x | 137% / 74.3x |
Covenant Headroom (at 10x Entry, 6.5x Max Leverage)
Pro forma EBITDA can decline 89% before the 6.5x covenant trips. RCM uplift reduces leverage from 8.5x to 0.7x, adding 7.7 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 | $6.6M | — | $6.6M | 0.5% |
| Year 1 | $6.8M | +$47.7M | $54.5M | 4.0% |
| Year 2 | $7.0M | +$71.5M | $78.5M | 5.8% |
| Year 3 | $7.3M | +$71.5M | $78.8M | 5.8% |
| Year 4 | $7.5M | +$71.5M | $79.0M | 5.8% |
| Year 5 | $7.7M | +$71.5M | $79.2M | 5.8% |
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 | $13.6M | $20.4M | $27.2M | $32.6M |
| Denial Rate Reductio | $13.5M | $20.2M | $26.9M | $32.3M |
| A/R Days Reduction | $8.3M | $12.4M | $16.5M | $19.8M |
| Clean Claim Rate | $435K | $652K | $870K | $1.0M |
| Total | $35.7M | $53.6M | $71.5M | $85.8M |
Peer Context — Where This Hospital Sits
Key metrics vs 103 size-matched peers. Low percentile on margin/efficiency metrics = more room for improvement = larger bridge opportunity.
| Metric | Hospital | P25 | P50 | P75 | Percentile |
|---|---|---|---|---|---|
| Op Margin | 0.5% | -14.5% | -5.4% | 2.8% | P67 |
| Net-to-Gross | 30.5% | 18.4% | 24.0% | 29.2% | P78 |
| Occupancy | 76.4% | 58.0% | 68.6% | 77.7% | P70 |
| Rev/Bed | $2.6M | $1.4M | $1.9M | $2.8M | P71 |
| Exp/Bed | $2.6M | $1.6M | $2.0M | $2.9M | P70 |
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.