Bridge Realization Estimate
ML model predicts what fraction of the bridge is achievable (accuracy: 60%, n=5,839)
Expected realization: 69% of modeled bridge. Strengths: Occupancy Rate, Revenue per Bed. Risks: Bed Count, Commercial Payer %. Risk-adjusted uplift: $47.3M (vs $68.6M 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 | $26.1M | $26.1M | $0 | 12mo |
| Denial Rate Reduction | 12.0% DEFAULT | 6.5% BENCHMARK | $25.1M | $717K | $25.8M | $0 | 12mo |
| A/R Days Reduction | 52.00 DEFAULT | 38.00 BENCHMARK | $4.0M | $11.9M | $15.9M | $50.0M | 9mo |
| Clean Claim Rate | 88.0% DEFAULT | 96.0% BENCHMARK | $0 | $835K | $835K | $0 | 6mo |
| Net Collection Rate | 93.5% DEFAULT | 28.9% 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 | $6.5M | $13.0M | $19.6M | $26.1M | $26.1M | $26.1M | $26.1M |
| Denial Rate Reduction | $0 | $6.5M | $12.9M | $19.4M | $25.8M | $25.8M | $25.8M | $25.8M |
| A/R Days Reduction | $0 | $5.3M | $10.6M | $15.9M | $15.9M | $15.9M | $15.9M | $15.9M |
| Clean Claim Rate | $0 | $417K | $835K | $835K | $835K | $835K | $835K | $835K |
| Cumulative | $0 | $18.7M | $37.4M | $55.6M | $68.6M | $68.6M | $68.6M | $68.6M |
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 $68.6M is added at exit.
| Entry \ Exit | 9.0x | 10.0x | 11.0x | 11.5x | 12.0x |
|---|---|---|---|---|---|
| 8.0x | 52% / 8.1x | 56% / 9.3x | 60% / 10.6x | 62% / 11.2x | 64% / 11.8x |
| 9.0x | 47% / 6.8x | 51% / 7.9x | 55% / 9.1x | 57% / 9.6x | 59% / 10.2x |
| 10.0x | 42% / 5.8x | 47% / 6.8x | 51% / 7.8x | 53% / 8.3x | 55% / 8.8x |
| 11.0x | 38% / 5.0x | 43% / 5.9x | 47% / 6.8x | 49% / 7.3x | 51% / 7.7x |
| 12.0x | 34% / 4.3x | 39% / 5.1x | 43% / 6.0x | 45% / 6.4x | 47% / 6.8x |
Covenant Headroom (at 10x Entry, 6.5x Max Leverage)
Pro forma EBITDA can decline 6% before the 6.5x covenant trips. RCM uplift reduces leverage from 8.5x to 6.1x, adding 2.4 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 | $176.8M | — | $176.8M | 13.6% |
| Year 1 | $182.2M | +$45.8M | $227.9M | 17.5% |
| Year 2 | $187.6M | +$68.6M | $256.2M | 19.6% |
| Year 3 | $193.2M | +$68.6M | $261.9M | 20.1% |
| Year 4 | $199.0M | +$68.6M | $267.7M | 20.5% |
| Year 5 | $205.0M | +$68.6M | $273.6M | 21.0% |
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 | $13.0M | $19.6M | $26.1M | $31.3M |
| Denial Rate Reductio | $12.9M | $19.4M | $25.8M | $31.0M |
| A/R Days Reduction | $7.9M | $11.9M | $15.9M | $19.0M |
| Clean Claim Rate | $417K | $626K | $835K | $1.0M |
| Total | $34.3M | $51.5M | $68.6M | $82.4M |
Peer Context — Where This Hospital Sits
Key metrics vs 109 size-matched peers. Low percentile on margin/efficiency metrics = more room for improvement = larger bridge opportunity.
| Metric | Hospital | P25 | P50 | P75 | Percentile |
|---|---|---|---|---|---|
| Op Margin | 13.6% | -14.7% | -5.4% | 3.0% | P93 |
| Net-to-Gross | 35.0% | 17.9% | 23.8% | 28.9% | P92 |
| Occupancy | 68.6% | 57.3% | 68.9% | 77.4% | P49 |
| Rev/Bed | $2.7M | $1.5M | $1.9M | $2.8M | P72 |
| Exp/Bed | $2.3M | $1.6M | $2.0M | $2.9M | P65 |
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.