Bridge Realization Estimate
ML model predicts what fraction of the bridge is achievable (accuracy: 60%, n=5,839)
Expected realization: 73% of modeled bridge. Strengths: Revenue per Bed, Occupancy Rate. Risks: Bed Count. Risk-adjusted uplift: $69.8M (vs $95.9M 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 | $36.5M | $36.5M | $0 | 12mo |
| Denial Rate Reduction | 12.0% DEFAULT | 6.5% BENCHMARK | $35.1M | $1.0M | $36.1M | $0 | 12mo |
| A/R Days Reduction | 52.00 DEFAULT | 38.00 BENCHMARK | $5.6M | $16.6M | $22.2M | $69.9M | 9mo |
| Clean Claim Rate | 88.0% DEFAULT | 96.0% BENCHMARK | $0 | $1.2M | $1.2M | $0 | 6mo |
| Net Collection Rate | 93.5% DEFAULT | 28.9% 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 | $9.1M | $18.2M | $27.4M | $36.5M | $36.5M | $36.5M | $36.5M |
| Denial Rate Reduction | $0 | $9.0M | $18.1M | $27.1M | $36.1M | $36.1M | $36.1M | $36.1M |
| A/R Days Reduction | $0 | $7.4M | $14.8M | $22.2M | $22.2M | $22.2M | $22.2M | $22.2M |
| Clean Claim Rate | $0 | $583K | $1.2M | $1.2M | $1.2M | $1.2M | $1.2M | $1.2M |
| Cumulative | $0 | $26.1M | $52.2M | $77.8M | $95.9M | $95.9M | $95.9M | $95.9M |
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 $95.9M is added at exit.
| Entry \ Exit | 9.0x | 10.0x | 11.0x | 11.5x | 12.0x |
|---|---|---|---|---|---|
| 8.0x | 51% / 7.8x | 55% / 9.1x | 59% / 10.3x | 61% / 10.9x | 63% / 11.5x |
| 9.0x | 46% / 6.6x | 50% / 7.7x | 54% / 8.8x | 56% / 9.3x | 58% / 9.9x |
| 10.0x | 41% / 5.6x | 46% / 6.6x | 50% / 7.6x | 52% / 8.1x | 54% / 8.6x |
| 11.0x | 37% / 4.8x | 42% / 5.7x | 46% / 6.6x | 48% / 7.0x | 50% / 7.5x |
| 12.0x | 33% / 4.1x | 38% / 5.0x | 42% / 5.8x | 44% / 6.2x | 46% / 6.6x |
Covenant Headroom (at 10x Entry, 6.5x Max Leverage)
Pro forma EBITDA can decline 4% before the 6.5x covenant trips. RCM uplift reduces leverage from 8.5x to 6.2x, adding 2.2 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 | $269.8M | — | $269.8M | 14.8% |
| Year 1 | $277.9M | +$64.0M | $341.8M | 18.7% |
| Year 2 | $286.2M | +$95.9M | $382.1M | 21.0% |
| Year 3 | $294.8M | +$95.9M | $390.7M | 21.4% |
| Year 4 | $303.7M | +$95.9M | $399.6M | 21.9% |
| Year 5 | $312.8M | +$95.9M | $408.7M | 22.4% |
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 | $18.2M | $27.4M | $36.5M | $43.8M |
| Denial Rate Reductio | $18.1M | $27.1M | $36.1M | $43.3M |
| A/R Days Reduction | $11.1M | $16.6M | $22.2M | $26.6M |
| Clean Claim Rate | $583K | $875K | $1.2M | $1.4M |
| Total | $48.0M | $71.9M | $95.9M | $115.1M |
Peer Context — Where This Hospital Sits
Key metrics vs 146 size-matched peers. Low percentile on margin/efficiency metrics = more room for improvement = larger bridge opportunity.
| Metric | Hospital | P25 | P50 | P75 | Percentile |
|---|---|---|---|---|---|
| Op Margin | 14.8% | -15.6% | -4.4% | 3.7% | P95 |
| Net-to-Gross | 50.4% | 18.1% | 23.5% | 28.9% | P97 |
| Occupancy | 70.4% | 54.8% | 65.8% | 75.3% | P58 |
| Rev/Bed | $4.5M | $1.4M | $1.9M | $2.7M | P95 |
| Exp/Bed | $3.9M | $1.5M | $2.0M | $2.8M | P89 |
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.