Bridge Realization Estimate
ML model predicts what fraction of the bridge is achievable (accuracy: 60%, n=5,839)
Expected realization: 72% of modeled bridge. Strengths: Revenue per Bed, Occupancy Rate. Risks: Bed Count, Commercial Payer %. Risk-adjusted uplift: $49.6M (vs $68.9M 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 | $26.2M | $26.2M | $0 | 12mo |
| Denial Rate Reduction | 12.0% DEFAULT | 6.5% BENCHMARK | $25.2M | $721K | $25.9M | $0 | 12mo |
| A/R Days Reduction | 52.00 DEFAULT | 38.00 BENCHMARK | $4.0M | $11.9M | $15.9M | $50.3M | 9mo |
| Clean Claim Rate | 88.0% DEFAULT | 96.0% BENCHMARK | $0 | $839K | $839K | $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 | $6.6M | $13.1M | $19.7M | $26.2M | $26.2M | $26.2M | $26.2M |
| Denial Rate Reduction | $0 | $6.5M | $13.0M | $19.5M | $25.9M | $25.9M | $25.9M | $25.9M |
| A/R Days Reduction | $0 | $5.3M | $10.6M | $15.9M | $15.9M | $15.9M | $15.9M | $15.9M |
| Clean Claim Rate | $0 | $419K | $839K | $839K | $839K | $839K | $839K | $839K |
| Cumulative | $0 | $18.8M | $37.5M | $55.9M | $68.9M | $68.9M | $68.9M | $68.9M |
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 $68.9M is added at exit.
| Entry \ Exit | 9.0x | 10.0x | 11.0x | 11.5x | 12.0x |
|---|---|---|---|---|---|
| 8.0x | 126% / 58.8x | 131% / 65.7x | 136% / 72.6x | 138% / 76.0x | 140% / 79.5x |
| 9.0x | 120% / 51.9x | 125% / 58.0x | 130% / 64.2x | 132% / 67.2x | 134% / 70.3x |
| 10.0x | 115% / 46.4x | 120% / 51.9x | 125% / 57.4x | 127% / 60.2x | 129% / 63.0x |
| 11.0x | 111% / 41.9x | 116% / 46.9x | 120% / 51.9x | 122% / 54.4x | 124% / 56.9x |
| 12.0x | 107% / 38.1x | 112% / 42.7x | 116% / 47.3x | 118% / 49.6x | 120% / 51.9x |
Covenant Headroom (at 10x Entry, 6.5x Max Leverage)
Pro forma EBITDA can decline 84% before the 6.5x covenant trips. RCM uplift reduces leverage from 8.5x to 1.0x, adding 7.4 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 | $9.4M | — | $9.4M | 0.7% |
| Year 1 | $9.7M | +$46.0M | $55.7M | 4.2% |
| Year 2 | $10.0M | +$68.9M | $78.9M | 6.0% |
| Year 3 | $10.3M | +$68.9M | $79.2M | 6.0% |
| Year 4 | $10.6M | +$68.9M | $79.5M | 6.1% |
| Year 5 | $10.9M | +$68.9M | $79.8M | 6.1% |
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 | $13.1M | $19.7M | $26.2M | $31.5M |
| Denial Rate Reductio | $13.0M | $19.5M | $25.9M | $31.1M |
| A/R Days Reduction | $8.0M | $12.0M | $15.9M | $19.1M |
| Clean Claim Rate | $419K | $629K | $839K | $1.0M |
| Total | $34.5M | $51.7M | $68.9M | $82.7M |
Peer Context — Where This Hospital Sits
Key metrics vs 167 size-matched peers. Low percentile on margin/efficiency metrics = more room for improvement = larger bridge opportunity.
| Metric | Hospital | P25 | P50 | P75 | Percentile |
|---|---|---|---|---|---|
| Op Margin | 0.7% | -15.0% | -3.9% | 4.4% | P64 |
| Net-to-Gross | 29.2% | 17.5% | 22.8% | 28.9% | P77 |
| Occupancy | 65.9% | 54.0% | 65.4% | 75.3% | P51 |
| Rev/Bed | $3.9M | $1.3M | $1.8M | $2.6M | P95 |
| Exp/Bed | $3.9M | $1.4M | $2.0M | $2.6M | P92 |
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.