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. Risk-adjusted uplift: $31.0M (vs $41.9M 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 | $15.9M | $15.9M | $0 | 12mo |
| Denial Rate Reduction | 12.0% DEFAULT | 6.5% BENCHMARK | $15.3M | $438K | $15.8M | $0 | 12mo |
| A/R Days Reduction | 52.00 DEFAULT | 38.00 BENCHMARK | $2.4M | $7.3M | $9.7M | $30.6M | 9mo |
| Clean Claim Rate | 88.0% DEFAULT | 96.0% BENCHMARK | $0 | $510K | $510K | $0 | 6mo |
| Net Collection Rate | 93.5% DEFAULT | 29.0% 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 | $4.0M | $8.0M | $12.0M | $15.9M | $15.9M | $15.9M | $15.9M |
| Denial Rate Reduction | $0 | $3.9M | $7.9M | $11.8M | $15.8M | $15.8M | $15.8M | $15.8M |
| A/R Days Reduction | $0 | $3.2M | $6.5M | $9.7M | $9.7M | $9.7M | $9.7M | $9.7M |
| Clean Claim Rate | $0 | $255K | $510K | $510K | $510K | $510K | $510K | $510K |
| Cumulative | $0 | $11.4M | $22.8M | $34.0M | $41.9M | $41.9M | $41.9M | $41.9M |
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 $41.9M is added at exit.
| Entry \ Exit | 9.0x | 10.0x | 11.0x | 11.5x | 12.0x |
|---|---|---|---|---|---|
| 8.0x | 56% / 9.4x | 61% / 10.8x | 65% / 12.2x | 67% / 12.9x | 69% / 13.6x |
| 9.0x | 51% / 8.0x | 56% / 9.2x | 60% / 10.5x | 62% / 11.1x | 64% / 11.7x |
| 10.0x | 47% / 6.9x | 51% / 8.0x | 56% / 9.1x | 57% / 9.7x | 59% / 10.2x |
| 11.0x | 43% / 5.9x | 47% / 7.0x | 51% / 8.0x | 53% / 8.5x | 55% / 9.0x |
| 12.0x | 39% / 5.2x | 44% / 6.1x | 48% / 7.0x | 50% / 7.5x | 51% / 8.0x |
Covenant Headroom (at 10x Entry, 6.5x Max Leverage)
Pro forma EBITDA can decline 17% before the 6.5x covenant trips. RCM uplift reduces leverage from 8.5x to 5.4x, adding 3.1 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 | $73.9M | — | $73.9M | 9.3% |
| Year 1 | $76.1M | +$28.0M | $104.1M | 13.1% |
| Year 2 | $78.4M | +$41.9M | $120.3M | 15.1% |
| Year 3 | $80.7M | +$41.9M | $122.7M | 15.4% |
| Year 4 | $83.2M | +$41.9M | $125.1M | 15.7% |
| Year 5 | $85.6M | +$41.9M | $127.6M | 16.0% |
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 | $8.0M | $12.0M | $15.9M | $19.1M |
| Denial Rate Reductio | $7.9M | $11.8M | $15.8M | $18.9M |
| A/R Days Reduction | $4.9M | $7.3M | $9.7M | $11.6M |
| Clean Claim Rate | $255K | $383K | $510K | $612K |
| Total | $21.0M | $31.5M | $41.9M | $50.3M |
Peer Context — Where This Hospital Sits
Key metrics vs 201 size-matched peers. Low percentile on margin/efficiency metrics = more room for improvement = larger bridge opportunity.
| Metric | Hospital | P25 | P50 | P75 | Percentile |
|---|---|---|---|---|---|
| Op Margin | 9.3% | -16.7% | -3.9% | 4.6% | P84 |
| Net-to-Gross | 31.2% | 17.1% | 22.5% | 29.0% | P82 |
| Occupancy | 70.1% | 50.5% | 64.0% | 75.3% | P59 |
| Rev/Bed | $3.5M | $1.1M | $1.6M | $2.5M | P93 |
| Exp/Bed | $3.2M | $1.2M | $1.8M | $2.6M | P88 |
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.