Bridge Realization Estimate
ML model predicts what fraction of the bridge is achievable (accuracy: 60%, n=5,839)
Expected realization: 63% of modeled bridge. Strengths: Payer Diversity, Revenue per Bed. Risks: Bed Count, Commercial Payer %. Risk-adjusted uplift: $41.2M (vs $65.2M 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 | $24.8M | $24.8M | $0 | 12mo |
| Denial Rate Reduction | 12.0% DEFAULT | 6.5% BENCHMARK | $23.9M | $681K | $24.5M | $0 | 12mo |
| A/R Days Reduction | 52.00 DEFAULT | 38.00 BENCHMARK | $3.8M | $11.3M | $15.1M | $47.5M | 9mo |
| Clean Claim Rate | 88.0% DEFAULT | 96.0% BENCHMARK | $0 | $793K | $793K | $0 | 6mo |
| Net Collection Rate | 93.5% DEFAULT | 29.8% 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 | $6.2M | $12.4M | $18.6M | $24.8M | $24.8M | $24.8M | $24.8M |
| Denial Rate Reduction | $0 | $6.1M | $12.3M | $18.4M | $24.5M | $24.5M | $24.5M | $24.5M |
| A/R Days Reduction | $0 | $5.0M | $10.1M | $15.1M | $15.1M | $15.1M | $15.1M | $15.1M |
| Clean Claim Rate | $0 | $397K | $793K | $793K | $793K | $793K | $793K | $793K |
| Cumulative | $0 | $17.8M | $35.5M | $52.9M | $65.2M | $65.2M | $65.2M | $65.2M |
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 $65.2M is added at exit.
| Entry \ Exit | 9.0x | 10.0x | 11.0x | 11.5x | 12.0x |
|---|---|---|---|---|---|
| 8.0x | 71% / 14.7x | 76% / 16.7x | 80% / 18.7x | 82% / 19.7x | 83% / 20.7x |
| 9.0x | 66% / 12.7x | 71% / 14.5x | 75% / 16.3x | 77% / 17.2x | 78% / 18.1x |
| 10.0x | 62% / 11.2x | 66% / 12.7x | 70% / 14.3x | 72% / 15.1x | 74% / 15.9x |
| 11.0x | 58% / 9.8x | 62% / 11.3x | 66% / 12.7x | 68% / 13.5x | 70% / 14.2x |
| 12.0x | 54% / 8.8x | 59% / 10.1x | 63% / 11.4x | 65% / 12.1x | 66% / 12.7x |
Covenant Headroom (at 10x Entry, 6.5x Max Leverage)
Pro forma EBITDA can decline 43% before the 6.5x covenant trips. RCM uplift reduces leverage from 8.5x to 3.7x, adding 4.8 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 | $50.1M | — | $50.1M | 4.0% |
| Year 1 | $51.6M | +$43.5M | $95.1M | 7.7% |
| Year 2 | $53.2M | +$65.2M | $118.3M | 9.6% |
| Year 3 | $54.7M | +$65.2M | $119.9M | 9.7% |
| Year 4 | $56.4M | +$65.2M | $121.6M | 9.8% |
| Year 5 | $58.1M | +$65.2M | $123.3M | 9.9% |
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 | $12.4M | $18.6M | $24.8M | $29.7M |
| Denial Rate Reductio | $12.3M | $18.4M | $24.5M | $29.4M |
| A/R Days Reduction | $7.5M | $11.3M | $15.1M | $18.1M |
| Clean Claim Rate | $397K | $595K | $793K | $952K |
| Total | $32.6M | $48.9M | $65.2M | $78.2M |
Peer Context — Where This Hospital Sits
Key metrics vs 87 size-matched peers. Low percentile on margin/efficiency metrics = more room for improvement = larger bridge opportunity.
| Metric | Hospital | P25 | P50 | P75 | Percentile |
|---|---|---|---|---|---|
| Op Margin | 4.0% | -14.5% | -5.4% | 4.0% | P74 |
| Net-to-Gross | 30.6% | 17.3% | 23.7% | 29.8% | P79 |
| Occupancy | 49.6% | 57.6% | 68.6% | 77.7% | P8 |
| Rev/Bed | $2.1M | $1.4M | $1.9M | $2.8M | P59 |
| Exp/Bed | $2.0M | $1.5M | $2.0M | $2.9M | P49 |
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.