Bridge Realization Estimate
ML model predicts what fraction of the bridge is achievable (accuracy: 60%, n=5,839)
Expected realization: 51% of modeled bridge. Strengths: Occupancy Rate, Revenue per Bed. Risks: Bed Count. Risk-adjusted uplift: $146.1M (vs $284.2M 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 | $108.1M | $108.1M | $0 | 12mo |
| Denial Rate Reduction | 12.0% DEFAULT | 6.5% BENCHMARK | $104.0M | $3.0M | $107.0M | $0 | 12mo |
| A/R Days Reduction | 52.00 DEFAULT | 38.00 BENCHMARK | $16.6M | $49.2M | $65.7M | $207.2M | 9mo |
| Clean Claim Rate | 88.0% DEFAULT | 96.0% BENCHMARK | $0 | $3.5M | $3.5M | $0 | 6mo |
| Net Collection Rate | 93.5% DEFAULT | 23.7% 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 | $27.0M | $54.0M | $81.0M | $108.1M | $108.1M | $108.1M | $108.1M |
| Denial Rate Reduction | $0 | $26.7M | $53.5M | $80.2M | $107.0M | $107.0M | $107.0M | $107.0M |
| A/R Days Reduction | $0 | $21.9M | $43.8M | $65.7M | $65.7M | $65.7M | $65.7M | $65.7M |
| Clean Claim Rate | $0 | $1.7M | $3.5M | $3.5M | $3.5M | $3.5M | $3.5M | $3.5M |
| Cumulative | $0 | $77.4M | $154.8M | $230.5M | $284.2M | $284.2M | $284.2M | $284.2M |
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 $284.2M is added at exit.
| Entry \ Exit | 9.0x | 10.0x | 11.0x | 11.5x | 12.0x |
|---|---|---|---|---|---|
| 8.0x | 83% / 20.8x | 88% / 23.4x | 92% / 26.1x | 94% / 27.5x | 96% / 28.8x |
| 9.0x | 78% / 18.1x | 83% / 20.5x | 87% / 22.9x | 89% / 24.0x | 91% / 25.2x |
| 10.0x | 74% / 16.0x | 78% / 18.1x | 83% / 20.2x | 84% / 21.3x | 86% / 22.4x |
| 11.0x | 70% / 14.2x | 74% / 16.2x | 78% / 18.1x | 80% / 19.1x | 82% / 20.1x |
| 12.0x | 66% / 12.8x | 71% / 14.6x | 75% / 16.3x | 77% / 17.2x | 78% / 18.1x |
Covenant Headroom (at 10x Entry, 6.5x Max Leverage)
Pro forma EBITDA can decline 58% before the 6.5x covenant trips. RCM uplift reduces leverage from 8.5x to 2.7x, adding 5.8 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 | $133.6M | — | $133.6M | 2.5% |
| Year 1 | $137.7M | +$189.5M | $327.2M | 6.1% |
| Year 2 | $141.8M | +$284.2M | $426.0M | 7.9% |
| Year 3 | $146.0M | +$284.2M | $430.3M | 8.0% |
| Year 4 | $150.4M | +$284.2M | $434.7M | 8.0% |
| Year 5 | $154.9M | +$284.2M | $439.2M | 8.1% |
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 | $54.0M | $81.0M | $108.1M | $129.7M |
| Denial Rate Reductio | $53.5M | $80.2M | $107.0M | $128.4M |
| A/R Days Reduction | $32.9M | $49.3M | $65.7M | $78.9M |
| Clean Claim Rate | $1.7M | $2.6M | $3.5M | $4.1M |
| Total | $142.1M | $213.2M | $284.2M | $341.1M |
Peer Context — Where This Hospital Sits
Key metrics vs 11 size-matched peers. Low percentile on margin/efficiency metrics = more room for improvement = larger bridge opportunity.
| Metric | Hospital | P25 | P50 | P75 | Percentile |
|---|---|---|---|---|---|
| Op Margin | 2.5% | -35.1% | -1.4% | 4.9% | P64 |
| Net-to-Gross | 19.7% | 15.4% | 19.7% | 23.7% | P45 |
| Occupancy | 80.0% | 67.1% | 80.0% | 85.0% | P45 |
| Rev/Bed | $2.0M | $1.1M | $1.6M | $2.1M | P64 |
| Exp/Bed | $1.9M | $1.2M | $1.7M | $2.3M | P64 |
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.