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: Occupancy Rate, Revenue per Bed. Risks: Bed Count, Commercial Payer %. Risk-adjusted uplift: $24.6M (vs $33.2M 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 | $12.6M | $12.6M | $0 | 12mo |
| Denial Rate Reduction | 12.0% DEFAULT | 6.5% BENCHMARK | $12.1M | $347K | $12.5M | $0 | 12mo |
| A/R Days Reduction | 52.00 DEFAULT | 38.00 BENCHMARK | $1.9M | $5.7M | $7.7M | $24.2M | 9mo |
| Clean Claim Rate | 88.0% DEFAULT | 96.0% BENCHMARK | $0 | $404K | $404K | $0 | 6mo |
| Net Collection Rate | 93.5% DEFAULT | 28.8% 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 | $3.2M | $6.3M | $9.5M | $12.6M | $12.6M | $12.6M | $12.6M |
| Denial Rate Reduction | $0 | $3.1M | $6.2M | $9.4M | $12.5M | $12.5M | $12.5M | $12.5M |
| A/R Days Reduction | $0 | $2.6M | $5.1M | $7.7M | $7.7M | $7.7M | $7.7M | $7.7M |
| Clean Claim Rate | $0 | $202K | $404K | $404K | $404K | $404K | $404K | $404K |
| Cumulative | $0 | $9.0M | $18.1M | $26.9M | $33.2M | $33.2M | $33.2M | $33.2M |
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 $33.2M is added at exit.
| Entry \ Exit | 9.0x | 10.0x | 11.0x | 11.5x | 12.0x |
|---|---|---|---|---|---|
| 8.0x | 90% / 24.5x | 94% / 27.6x | 98% / 30.7x | 100% / 32.3x | 102% / 33.8x |
| 9.0x | 85% / 21.4x | 89% / 24.2x | 93% / 26.9x | 95% / 28.3x | 97% / 29.7x |
| 10.0x | 80% / 19.0x | 85% / 21.4x | 89% / 23.9x | 91% / 25.2x | 92% / 26.4x |
| 11.0x | 76% / 17.0x | 81% / 19.2x | 85% / 21.4x | 87% / 22.6x | 88% / 23.7x |
| 12.0x | 73% / 15.3x | 77% / 17.3x | 81% / 19.4x | 83% / 20.4x | 85% / 21.4x |
Covenant Headroom (at 10x Entry, 6.5x Max Leverage)
Pro forma EBITDA can decline 64% before the 6.5x covenant trips. RCM uplift reduces leverage from 8.5x to 2.3x, adding 6.1 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 | $12.6M | — | $12.6M | 2.0% |
| Year 1 | $12.9M | +$22.1M | $35.1M | 5.6% |
| Year 2 | $13.3M | +$33.2M | $46.5M | 7.4% |
| Year 3 | $13.7M | +$33.2M | $46.9M | 7.4% |
| Year 4 | $14.1M | +$33.2M | $47.3M | 7.5% |
| Year 5 | $14.6M | +$33.2M | $47.7M | 7.6% |
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 | $6.3M | $9.5M | $12.6M | $15.1M |
| Denial Rate Reductio | $6.2M | $9.4M | $12.5M | $15.0M |
| A/R Days Reduction | $3.8M | $5.8M | $7.7M | $9.2M |
| Clean Claim Rate | $202K | $303K | $404K | $484K |
| Total | $16.6M | $24.9M | $33.2M | $39.8M |
Peer Context — Where This Hospital Sits
Key metrics vs 179 size-matched peers. Low percentile on margin/efficiency metrics = more room for improvement = larger bridge opportunity.
| Metric | Hospital | P25 | P50 | P75 | Percentile |
|---|---|---|---|---|---|
| Op Margin | 2.0% | -15.6% | -3.9% | 4.4% | P69 |
| Net-to-Gross | 16.1% | 17.1% | 22.3% | 28.8% | P19 |
| Occupancy | 85.6% | 53.7% | 65.4% | 75.3% | P91 |
| Rev/Bed | $2.2M | $1.2M | $1.7M | $2.5M | P68 |
| Exp/Bed | $2.1M | $1.3M | $1.8M | $2.6M | P61 |
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.