Bridge Realization Estimate
ML model predicts what fraction of the bridge is achievable (accuracy: 60%, n=5,839)
Expected realization: 62% of modeled bridge. Strengths: Occupancy Rate. Risks: Bed Count, Commercial Payer %. Risk-adjusted uplift: $55.3M (vs $89.9M 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 | $34.2M | $34.2M | $0 | 12mo |
| Denial Rate Reduction | 12.0% DEFAULT | 6.5% BENCHMARK | $32.9M | $940K | $33.9M | $0 | 12mo |
| A/R Days Reduction | 52.00 DEFAULT | 38.00 BENCHMARK | $5.2M | $15.6M | $20.8M | $65.6M | 9mo |
| Clean Claim Rate | 88.0% DEFAULT | 96.0% BENCHMARK | $0 | $1.1M | $1.1M | $0 | 6mo |
| Net Collection Rate | 93.5% DEFAULT | 22.4% 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 | $8.5M | $17.1M | $25.6M | $34.2M | $34.2M | $34.2M | $34.2M |
| Denial Rate Reduction | $0 | $8.5M | $16.9M | $25.4M | $33.9M | $33.9M | $33.9M | $33.9M |
| A/R Days Reduction | $0 | $6.9M | $13.9M | $20.8M | $20.8M | $20.8M | $20.8M | $20.8M |
| Clean Claim Rate | $0 | $547K | $1.1M | $1.1M | $1.1M | $1.1M | $1.1M | $1.1M |
| Cumulative | $0 | $24.5M | $49.0M | $72.9M | $89.9M | $89.9M | $89.9M | $89.9M |
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 $89.9M is added at exit.
| Entry \ Exit | 9.0x | 10.0x | 11.0x | 11.5x | 12.0x |
|---|---|---|---|---|---|
| 8.0x | 54% / 8.8x | 59% / 10.1x | 63% / 11.5x | 65% / 12.1x | 67% / 12.8x |
| 9.0x | 49% / 7.5x | 54% / 8.6x | 58% / 9.8x | 60% / 10.4x | 62% / 11.0x |
| 10.0x | 45% / 6.4x | 49% / 7.5x | 54% / 8.5x | 55% / 9.1x | 57% / 9.6x |
| 11.0x | 41% / 5.5x | 45% / 6.5x | 49% / 7.5x | 51% / 7.9x | 53% / 8.4x |
| 12.0x | 37% / 4.8x | 41% / 5.7x | 46% / 6.6x | 48% / 7.0x | 49% / 7.5x |
Covenant Headroom (at 10x Entry, 6.5x Max Leverage)
Pro forma EBITDA can decline 12% before the 6.5x covenant trips. RCM uplift reduces leverage from 8.5x to 5.7x, adding 2.8 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 | $184.7M | — | $184.7M | 10.8% |
| Year 1 | $190.3M | +$60.0M | $250.2M | 14.6% |
| Year 2 | $196.0M | +$89.9M | $285.9M | 16.7% |
| Year 3 | $201.9M | +$89.9M | $291.8M | 17.1% |
| Year 4 | $207.9M | +$89.9M | $297.9M | 17.4% |
| Year 5 | $214.2M | +$89.9M | $304.1M | 17.8% |
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 | $17.1M | $25.6M | $34.2M | $41.0M |
| Denial Rate Reductio | $16.9M | $25.4M | $33.9M | $40.6M |
| A/R Days Reduction | $10.4M | $15.6M | $20.8M | $25.0M |
| Clean Claim Rate | $547K | $821K | $1.1M | $1.3M |
| Total | $45.0M | $67.5M | $89.9M | $107.9M |
Peer Context — Where This Hospital Sits
Key metrics vs 29 size-matched peers. Low percentile on margin/efficiency metrics = more room for improvement = larger bridge opportunity.
| Metric | Hospital | P25 | P50 | P75 | Percentile |
|---|---|---|---|---|---|
| Op Margin | 10.8% | -8.5% | 0.9% | 8.3% | P79 |
| Net-to-Gross | 24.8% | 17.3% | 19.2% | 22.4% | P90 |
| Occupancy | 58.0% | 65.1% | 69.7% | 76.8% | P10 |
| Rev/Bed | $1.8M | $1.2M | $1.4M | $1.8M | P72 |
| Exp/Bed | $1.6M | $1.1M | $1.4M | $1.9M | P62 |
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.