Bridge Realization Estimate
ML model predicts what fraction of the bridge is achievable (accuracy: 60%, n=5,839)
Expected realization: 67% of modeled bridge. Strengths: Occupancy Rate, Revenue per Bed. Risks: Bed Count. Risk-adjusted uplift: $38.2M (vs $57.4M 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 | $21.8M | $21.8M | $0 | 12mo |
| Denial Rate Reduction | 12.0% DEFAULT | 6.5% BENCHMARK | $21.0M | $601K | $21.6M | $0 | 12mo |
| A/R Days Reduction | 52.00 DEFAULT | 38.00 BENCHMARK | $3.4M | $9.9M | $13.3M | $41.9M | 9mo |
| Clean Claim Rate | 88.0% DEFAULT | 96.0% BENCHMARK | $0 | $699K | $699K | $0 | 6mo |
| Net Collection Rate | 93.5% DEFAULT | 29.1% 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 | $5.5M | $10.9M | $16.4M | $21.8M | $21.8M | $21.8M | $21.8M |
| Denial Rate Reduction | $0 | $5.4M | $10.8M | $16.2M | $21.6M | $21.6M | $21.6M | $21.6M |
| A/R Days Reduction | $0 | $4.4M | $8.9M | $13.3M | $13.3M | $13.3M | $13.3M | $13.3M |
| Clean Claim Rate | $0 | $349K | $699K | $699K | $699K | $699K | $699K | $699K |
| Cumulative | $0 | $15.6M | $31.3M | $46.6M | $57.4M | $57.4M | $57.4M | $57.4M |
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 $57.4M is added at exit.
| Entry \ Exit | 9.0x | 10.0x | 11.0x | 11.5x | 12.0x |
|---|---|---|---|---|---|
| 8.0x | 70% / 14.1x | 74% / 16.1x | 78% / 18.0x | 80% / 18.9x | 82% / 19.9x |
| 9.0x | 65% / 12.2x | 69% / 13.9x | 73% / 15.6x | 75% / 16.5x | 77% / 17.3x |
| 10.0x | 60% / 10.7x | 65% / 12.2x | 69% / 13.7x | 71% / 14.5x | 73% / 15.3x |
| 11.0x | 56% / 9.4x | 61% / 10.8x | 65% / 12.2x | 67% / 12.9x | 69% / 13.6x |
| 12.0x | 53% / 8.3x | 57% / 9.6x | 61% / 10.9x | 63% / 11.6x | 65% / 12.2x |
Covenant Headroom (at 10x Entry, 6.5x Max Leverage)
Pro forma EBITDA can decline 41% before the 6.5x covenant trips. RCM uplift reduces leverage from 8.5x to 3.8x, adding 4.6 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 | $47.2M | — | $47.2M | 4.3% |
| Year 1 | $48.7M | +$38.3M | $87.0M | 8.0% |
| Year 2 | $50.1M | +$57.4M | $107.6M | 9.9% |
| Year 3 | $51.6M | +$57.4M | $109.1M | 10.0% |
| Year 4 | $53.2M | +$57.4M | $110.6M | 10.1% |
| Year 5 | $54.8M | +$57.4M | $112.2M | 10.3% |
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 | $10.9M | $16.4M | $21.8M | $26.2M |
| Denial Rate Reductio | $10.8M | $16.2M | $21.6M | $25.9M |
| A/R Days Reduction | $6.6M | $10.0M | $13.3M | $15.9M |
| Clean Claim Rate | $349K | $524K | $699K | $839K |
| Total | $28.7M | $43.1M | $57.4M | $68.9M |
Peer Context — Where This Hospital Sits
Key metrics vs 107 size-matched peers. Low percentile on margin/efficiency metrics = more room for improvement = larger bridge opportunity.
| Metric | Hospital | P25 | P50 | P75 | Percentile |
|---|---|---|---|---|---|
| Op Margin | 4.3% | -13.9% | -5.0% | 3.0% | P78 |
| Net-to-Gross | 20.2% | 18.4% | 24.0% | 29.1% | P36 |
| Occupancy | 57.8% | 57.6% | 68.6% | 77.6% | P25 |
| Rev/Bed | $2.2M | $1.4M | $1.9M | $2.8M | P61 |
| Exp/Bed | $2.1M | $1.6M | $2.0M | $2.9M | P52 |
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.