Bridge Realization Estimate
ML model predicts what fraction of the bridge is achievable (accuracy: 60%, n=5,839)
Expected realization: 65% of modeled bridge. Strengths: Revenue per Bed, Payer Diversity. Risks: Bed Count, Commercial Payer %. Risk-adjusted uplift: $38.9M (vs $59.6M 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 | $22.6M | $22.6M | $0 | 12mo |
| Denial Rate Reduction | 12.0% DEFAULT | 6.5% BENCHMARK | $21.8M | $623K | $22.4M | $0 | 12mo |
| A/R Days Reduction | 52.00 DEFAULT | 38.00 BENCHMARK | $3.5M | $10.3M | $13.8M | $43.4M | 9mo |
| Clean Claim Rate | 88.0% DEFAULT | 96.0% BENCHMARK | $0 | $725K | $725K | $0 | 6mo |
| Net Collection Rate | 93.5% DEFAULT | 29.2% 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 | $5.7M | $11.3M | $17.0M | $22.6M | $22.6M | $22.6M | $22.6M |
| Denial Rate Reduction | $0 | $5.6M | $11.2M | $16.8M | $22.4M | $22.4M | $22.4M | $22.4M |
| A/R Days Reduction | $0 | $4.6M | $9.2M | $13.8M | $13.8M | $13.8M | $13.8M | $13.8M |
| Clean Claim Rate | $0 | $362K | $725K | $725K | $725K | $725K | $725K | $725K |
| Cumulative | $0 | $16.2M | $32.4M | $48.3M | $59.6M | $59.6M | $59.6M | $59.6M |
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 $59.6M is added at exit.
| Entry \ Exit | 9.0x | 10.0x | 11.0x | 11.5x | 12.0x |
|---|---|---|---|---|---|
| 8.0x | 53% / 8.4x | 58% / 9.8x | 62% / 11.1x | 64% / 11.7x | 65% / 12.3x |
| 9.0x | 48% / 7.2x | 53% / 8.3x | 57% / 9.5x | 59% / 10.0x | 60% / 10.6x |
| 10.0x | 44% / 6.1x | 48% / 7.2x | 52% / 8.2x | 54% / 8.7x | 56% / 9.2x |
| 11.0x | 39% / 5.3x | 44% / 6.2x | 48% / 7.2x | 50% / 7.6x | 52% / 8.1x |
| 12.0x | 35% / 4.5x | 40% / 5.4x | 44% / 6.3x | 46% / 6.7x | 48% / 7.2x |
Covenant Headroom (at 10x Entry, 6.5x Max Leverage)
Pro forma EBITDA can decline 10% before the 6.5x covenant trips. RCM uplift reduces leverage from 8.5x to 5.9x, adding 2.6 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 | $135.3M | — | $135.3M | 11.9% |
| Year 1 | $139.4M | +$39.7M | $179.1M | 15.8% |
| Year 2 | $143.5M | +$59.6M | $203.1M | 17.9% |
| Year 3 | $147.8M | +$59.6M | $207.4M | 18.3% |
| Year 4 | $152.3M | +$59.6M | $211.9M | 18.7% |
| Year 5 | $156.8M | +$59.6M | $216.4M | 19.1% |
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 | $11.3M | $17.0M | $22.6M | $27.2M |
| Denial Rate Reductio | $11.2M | $16.8M | $22.4M | $26.9M |
| A/R Days Reduction | $6.9M | $10.3M | $13.8M | $16.5M |
| Clean Claim Rate | $362K | $544K | $725K | $870K |
| Total | $29.8M | $44.7M | $59.6M | $71.5M |
Peer Context — Where This Hospital Sits
Key metrics vs 102 size-matched peers. Low percentile on margin/efficiency metrics = more room for improvement = larger bridge opportunity.
| Metric | Hospital | P25 | P50 | P75 | Percentile |
|---|---|---|---|---|---|
| Op Margin | 11.9% | -14.7% | -5.4% | 2.8% | P89 |
| Net-to-Gross | 30.6% | 18.3% | 23.8% | 29.2% | P81 |
| Occupancy | 55.3% | 57.9% | 68.0% | 77.7% | P21 |
| Rev/Bed | $2.2M | $1.4M | $1.9M | $2.8M | P61 |
| Exp/Bed | $1.9M | $1.6M | $2.0M | $2.9M | P42 |
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.