Bridge Realization Estimate
ML model predicts what fraction of the bridge is achievable (accuracy: 60%, n=5,839)
Expected realization: 83% of modeled bridge. Strengths: Revenue per Bed, Occupancy Rate. Risks: Bed Count. Risk-adjusted uplift: $296.1M (vs $355.7M 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 | $135.2M | $135.2M | $0 | 12mo |
| Denial Rate Reduction | 12.0% DEFAULT | 6.5% BENCHMARK | $130.2M | $3.7M | $133.9M | $0 | 12mo |
| A/R Days Reduction | 52.00 DEFAULT | 38.00 BENCHMARK | $20.7M | $61.5M | $82.3M | $259.3M | 9mo |
| Clean Claim Rate | 88.0% DEFAULT | 96.0% BENCHMARK | $0 | $4.3M | $4.3M | $0 | 6mo |
| Net Collection Rate | 93.5% DEFAULT | 30.4% 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 | $33.8M | $67.6M | $101.4M | $135.2M | $135.2M | $135.2M | $135.2M |
| Denial Rate Reduction | $0 | $33.5M | $66.9M | $100.4M | $133.9M | $133.9M | $133.9M | $133.9M |
| A/R Days Reduction | $0 | $27.4M | $54.8M | $82.3M | $82.3M | $82.3M | $82.3M | $82.3M |
| Clean Claim Rate | $0 | $2.2M | $4.3M | $4.3M | $4.3M | $4.3M | $4.3M | $4.3M |
| Cumulative | $0 | $96.9M | $193.7M | $288.4M | $355.7M | $355.7M | $355.7M | $355.7M |
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 $355.7M is added at exit.
| Entry \ Exit | 9.0x | 10.0x | 11.0x | 11.5x | 12.0x |
|---|---|---|---|---|---|
| 8.0x | 73% / 15.7x | 78% / 17.8x | 82% / 19.9x | 84% / 21.0x | 86% / 22.0x |
| 9.0x | 69% / 13.6x | 73% / 15.5x | 77% / 17.3x | 79% / 18.3x | 81% / 19.2x |
| 10.0x | 64% / 11.9x | 69% / 13.6x | 73% / 15.3x | 74% / 16.1x | 76% / 17.0x |
| 11.0x | 60% / 10.5x | 65% / 12.1x | 69% / 13.6x | 70% / 14.4x | 72% / 15.1x |
| 12.0x | 56% / 9.4x | 61% / 10.8x | 65% / 12.2x | 67% / 12.9x | 69% / 13.6x |
Covenant Headroom (at 10x Entry, 6.5x Max Leverage)
Pro forma EBITDA can decline 46% before the 6.5x covenant trips. RCM uplift reduces leverage from 8.5x to 3.5x, adding 5.0 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 | $248.3M | — | $248.3M | 3.7% |
| Year 1 | $255.8M | +$237.1M | $492.9M | 7.3% |
| Year 2 | $263.4M | +$355.7M | $619.1M | 9.2% |
| Year 3 | $271.3M | +$355.7M | $627.0M | 9.3% |
| Year 4 | $279.5M | +$355.7M | $635.2M | 9.4% |
| Year 5 | $287.9M | +$355.7M | $643.6M | 9.5% |
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 | $67.6M | $101.4M | $135.2M | $162.3M |
| Denial Rate Reductio | $66.9M | $100.4M | $133.9M | $160.6M |
| A/R Days Reduction | $41.1M | $61.7M | $82.3M | $98.7M |
| Clean Claim Rate | $2.2M | $3.2M | $4.3M | $5.2M |
| Total | $177.8M | $266.8M | $355.7M | $426.8M |
Peer Context — Where This Hospital Sits
Key metrics vs 67 size-matched peers. Low percentile on margin/efficiency metrics = more room for improvement = larger bridge opportunity.
| Metric | Hospital | P25 | P50 | P75 | Percentile |
|---|---|---|---|---|---|
| Op Margin | 3.7% | -12.0% | -4.2% | 4.3% | P71 |
| Net-to-Gross | 20.0% | 18.7% | 25.0% | 30.4% | P29 |
| Occupancy | 97.1% | 58.7% | 70.4% | 81.7% | P97 |
| Rev/Bed | $10.3M | $1.5M | $2.0M | $3.1M | P98 |
| Exp/Bed | $9.9M | $1.7M | $2.1M | $3.1M | P99 |
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.