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: Revenue per Bed, Occupancy Rate. Risks: Net-to-Gross Ratio, Commercial Payer %. Risk-adjusted uplift: $19.9M (vs $27.0M 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 | $10.3M | $10.3M | $0 | 12mo |
| Denial Rate Reduction | 12.0% DEFAULT | 6.5% BENCHMARK | $9.9M | $282K | $10.2M | $0 | 12mo |
| A/R Days Reduction | 52.00 DEFAULT | 38.00 BENCHMARK | $1.6M | $4.7M | $6.2M | $19.7M | 9mo |
| Clean Claim Rate | 88.0% DEFAULT | 96.0% BENCHMARK | $0 | $328K | $328K | $0 | 6mo |
| Net Collection Rate | 93.5% DEFAULT | 36.9% 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 | $2.6M | $5.1M | $7.7M | $10.3M | $10.3M | $10.3M | $10.3M |
| Denial Rate Reduction | $0 | $2.5M | $5.1M | $7.6M | $10.2M | $10.2M | $10.2M | $10.2M |
| A/R Days Reduction | $0 | $2.1M | $4.2M | $6.2M | $6.2M | $6.2M | $6.2M | $6.2M |
| Clean Claim Rate | $0 | $164K | $328K | $328K | $328K | $328K | $328K | $328K |
| Cumulative | $0 | $7.3M | $14.7M | $21.9M | $27.0M | $27.0M | $27.0M | $27.0M |
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 $27.0M is added at exit.
| Entry \ Exit | 9.0x | 10.0x | 11.0x | 11.5x | 12.0x |
|---|---|---|---|---|---|
| 8.0x | 44% / 6.2x | 48% / 7.2x | 52% / 8.2x | 54% / 8.8x | 56% / 9.3x |
| 9.0x | 39% / 5.1x | 43% / 6.0x | 47% / 7.0x | 49% / 7.4x | 51% / 7.9x |
| 10.0x | 34% / 4.3x | 39% / 5.1x | 43% / 5.9x | 45% / 6.4x | 47% / 6.8x |
| 11.0x | 29% / 3.6x | 34% / 4.3x | 39% / 5.1x | 41% / 5.5x | 42% / 5.9x |
| 12.0x | 25% / 3.0x | 30% / 3.7x | 35% / 4.4x | 37% / 4.8x | 39% / 5.1x |
Covenant Headroom (at 10x Entry, 6.5x Max Leverage)
Pro forma EBITDA can decline -16% before the 6.5x covenant trips. RCM uplift reduces leverage from 8.5x to 7.5x, adding 0.9 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 | $214.7M | — | $214.7M | 41.9% |
| Year 1 | $221.1M | +$18.0M | $239.1M | 46.6% |
| Year 2 | $227.7M | +$27.0M | $254.7M | 49.7% |
| Year 3 | $234.6M | +$27.0M | $261.5M | 51.0% |
| Year 4 | $241.6M | +$27.0M | $268.6M | 52.4% |
| Year 5 | $248.9M | +$27.0M | $275.8M | 53.8% |
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 | $5.1M | $7.7M | $10.3M | $12.3M |
| Denial Rate Reductio | $5.1M | $7.6M | $10.2M | $12.2M |
| A/R Days Reduction | $3.1M | $4.7M | $6.2M | $7.5M |
| Clean Claim Rate | $164K | $246K | $328K | $394K |
| Total | $13.5M | $20.2M | $27.0M | $32.4M |
Peer Context — Where This Hospital Sits
Key metrics vs 156 size-matched peers. Low percentile on margin/efficiency metrics = more room for improvement = larger bridge opportunity.
| Metric | Hospital | P25 | P50 | P75 | Percentile |
|---|---|---|---|---|---|
| Op Margin | 41.9% | -22.4% | -4.9% | 3.7% | P99 |
| Net-to-Gross | 81.6% | 19.1% | 24.3% | 36.9% | P99 |
| Occupancy | 57.0% | 43.1% | 56.9% | 71.5% | P50 |
| Rev/Bed | $6.2M | $506K | $905K | $2.1M | P99 |
| Exp/Bed | $3.6M | $591K | $1.1M | $2.2M | P96 |
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.