Bridge Realization Estimate
ML model predicts what fraction of the bridge is achievable (accuracy: 60%, n=5,839)
Expected realization: 68% of modeled bridge. Strengths: Occupancy Rate. Risks: Bed Count. Risk-adjusted uplift: $29.0M (vs $42.6M 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 | $16.2M | $16.2M | $0 | 12mo |
| Denial Rate Reduction | 12.0% DEFAULT | 6.5% BENCHMARK | $15.6M | $445K | $16.0M | $0 | 12mo |
| A/R Days Reduction | 52.00 DEFAULT | 38.00 BENCHMARK | $2.5M | $7.4M | $9.9M | $31.1M | 9mo |
| Clean Claim Rate | 88.0% DEFAULT | 96.0% BENCHMARK | $0 | $518K | $518K | $0 | 6mo |
| Net Collection Rate | 93.5% DEFAULT | 19.0% 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 | $4.0M | $8.1M | $12.1M | $16.2M | $16.2M | $16.2M | $16.2M |
| Denial Rate Reduction | $0 | $4.0M | $8.0M | $12.0M | $16.0M | $16.0M | $16.0M | $16.0M |
| A/R Days Reduction | $0 | $3.3M | $6.6M | $9.9M | $9.9M | $9.9M | $9.9M | $9.9M |
| Clean Claim Rate | $0 | $259K | $518K | $518K | $518K | $518K | $518K | $518K |
| Cumulative | $0 | $11.6M | $23.2M | $34.5M | $42.6M | $42.6M | $42.6M | $42.6M |
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 $42.6M is added at exit.
| Entry \ Exit | 9.0x | 10.0x | 11.0x | 11.5x | 12.0x |
|---|---|---|---|---|---|
| 8.0x | 203% / 256.4x | 210% / 285.2x | 216% / 314.1x | 219% / 328.5x | 221% / 342.9x |
| 9.0x | 196% / 227.5x | 202% / 253.2x | 208% / 278.8x | 211% / 291.6x | 214% / 304.4x |
| 10.0x | 190% / 204.4x | 196% / 227.5x | 202% / 250.6x | 205% / 262.1x | 207% / 273.7x |
| 11.0x | 184% / 185.6x | 190% / 206.5x | 196% / 227.5x | 199% / 238.0x | 201% / 248.5x |
| 12.0x | 179% / 169.8x | 185% / 189.1x | 191% / 208.3x | 194% / 217.9x | 196% / 227.5x |
Covenant Headroom (at 10x Entry, 6.5x Max Leverage)
Pro forma EBITDA can decline 96% before the 6.5x covenant trips. RCM uplift reduces leverage from 8.5x to 0.2x, adding 8.2 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 | $1.2M | — | $1.2M | 0.2% |
| Year 1 | $1.3M | +$28.4M | $29.7M | 3.7% |
| Year 2 | $1.3M | +$42.6M | $43.9M | 5.4% |
| Year 3 | $1.4M | +$42.6M | $44.0M | 5.4% |
| Year 4 | $1.4M | +$42.6M | $44.0M | 5.4% |
| Year 5 | $1.4M | +$42.6M | $44.0M | 5.4% |
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 | $8.1M | $12.1M | $16.2M | $19.4M |
| Denial Rate Reductio | $8.0M | $12.0M | $16.0M | $19.2M |
| A/R Days Reduction | $4.9M | $7.4M | $9.9M | $11.8M |
| Clean Claim Rate | $259K | $389K | $518K | $622K |
| Total | $21.3M | $31.9M | $42.6M | $51.1M |
Peer Context — Where This Hospital Sits
Key metrics vs 14 size-matched peers. Low percentile on margin/efficiency metrics = more room for improvement = larger bridge opportunity.
| Metric | Hospital | P25 | P50 | P75 | Percentile |
|---|---|---|---|---|---|
| Op Margin | 0.2% | -5.1% | 2.7% | 18.9% | P36 |
| Net-to-Gross | 17.9% | 11.1% | 17.3% | 19.0% | P57 |
| Occupancy | 66.8% | 65.7% | 71.4% | 77.8% | P36 |
| Rev/Bed | $1.7M | $1.5M | $2.0M | $2.2M | P36 |
| Exp/Bed | $1.7M | $1.4M | $1.6M | $2.1M | P50 |
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.