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: $89.1M (vs $124.3M 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 | $47.3M | $47.3M | $0 | 12mo |
| Denial Rate Reduction | 12.0% DEFAULT | 6.5% BENCHMARK | $45.5M | $1.3M | $46.8M | $0 | 12mo |
| A/R Days Reduction | 52.00 DEFAULT | 38.00 BENCHMARK | $7.3M | $21.5M | $28.8M | $90.7M | 9mo |
| Clean Claim Rate | 88.0% DEFAULT | 96.0% BENCHMARK | $0 | $1.5M | $1.5M | $0 | 6mo |
| Net Collection Rate | 93.5% DEFAULT | 20.7% 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 | $11.8M | $23.6M | $35.5M | $47.3M | $47.3M | $47.3M | $47.3M |
| Denial Rate Reduction | $0 | $11.7M | $23.4M | $35.1M | $46.8M | $46.8M | $46.8M | $46.8M |
| A/R Days Reduction | $0 | $9.6M | $19.2M | $28.8M | $28.8M | $28.8M | $28.8M | $28.8M |
| Clean Claim Rate | $0 | $756K | $1.5M | $1.5M | $1.5M | $1.5M | $1.5M | $1.5M |
| Cumulative | $0 | $33.9M | $67.7M | $100.8M | $124.3M | $124.3M | $124.3M | $124.3M |
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 $124.3M is added at exit.
| Entry \ Exit | 9.0x | 10.0x | 11.0x | 11.5x | 12.0x |
|---|---|---|---|---|---|
| 8.0x | 115% / 45.9x | 120% / 51.3x | 124% / 56.8x | 126% / 59.5x | 128% / 62.2x |
| 9.0x | 110% / 40.4x | 114% / 45.3x | 119% / 50.1x | 121% / 52.5x | 123% / 55.0x |
| 10.0x | 105% / 36.0x | 110% / 40.4x | 114% / 44.8x | 116% / 47.0x | 118% / 49.1x |
| 11.0x | 101% / 32.5x | 105% / 36.5x | 110% / 40.4x | 112% / 42.4x | 114% / 44.4x |
| 12.0x | 97% / 29.5x | 101% / 33.1x | 106% / 36.8x | 108% / 38.6x | 110% / 40.4x |
Covenant Headroom (at 10x Entry, 6.5x Max Leverage)
Pro forma EBITDA can decline 80% before the 6.5x covenant trips. RCM uplift reduces leverage from 8.5x to 1.3x, adding 7.2 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 | $22.4M | — | $22.4M | 0.9% |
| Year 1 | $23.0M | +$82.9M | $105.9M | 4.5% |
| Year 2 | $23.7M | +$124.3M | $148.1M | 6.3% |
| Year 3 | $24.4M | +$124.3M | $148.8M | 6.3% |
| Year 4 | $25.2M | +$124.3M | $149.5M | 6.3% |
| Year 5 | $25.9M | +$124.3M | $150.3M | 6.4% |
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 | $23.6M | $35.5M | $47.3M | $56.7M |
| Denial Rate Reductio | $23.4M | $35.1M | $46.8M | $56.2M |
| A/R Days Reduction | $14.4M | $21.6M | $28.8M | $34.5M |
| Clean Claim Rate | $756K | $1.1M | $1.5M | $1.8M |
| Total | $62.2M | $93.3M | $124.3M | $149.2M |
Peer Context — Where This Hospital Sits
Key metrics vs 69 size-matched peers. Low percentile on margin/efficiency metrics = more room for improvement = larger bridge opportunity.
| Metric | Hospital | P25 | P50 | P75 | Percentile |
|---|---|---|---|---|---|
| Op Margin | 0.9% | -5.8% | 5.1% | 17.7% | P40 |
| Net-to-Gross | 19.2% | 10.2% | 17.0% | 20.7% | P65 |
| Occupancy | 68.3% | 60.1% | 66.6% | 76.7% | P57 |
| Rev/Bed | $4.4M | $1.0M | $1.2M | $1.5M | P99 |
| Exp/Bed | $4.4M | $848K | $1.1M | $1.4M | P99 |
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.