Bridge Realization Estimate
ML model predicts what fraction of the bridge is achievable (accuracy: 60%, n=5,839)
Expected realization: 66% of modeled bridge. Strengths: Occupancy Rate. Risks: Bed Count, Commercial Payer %. Risk-adjusted uplift: $61.9M (vs $93.7M 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 | $35.6M | $35.6M | $0 | 12mo |
| Denial Rate Reduction | 12.0% DEFAULT | 6.5% BENCHMARK | $34.3M | $980K | $35.3M | $0 | 12mo |
| A/R Days Reduction | 52.00 DEFAULT | 38.00 BENCHMARK | $5.5M | $16.2M | $21.7M | $68.4M | 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 | $8.9M | $17.8M | $26.7M | $35.6M | $35.6M | $35.6M | $35.6M |
| Denial Rate Reduction | $0 | $8.8M | $17.6M | $26.5M | $35.3M | $35.3M | $35.3M | $35.3M |
| A/R Days Reduction | $0 | $7.2M | $14.5M | $21.7M | $21.7M | $21.7M | $21.7M | $21.7M |
| Clean Claim Rate | $0 | $570K | $1.1M | $1.1M | $1.1M | $1.1M | $1.1M | $1.1M |
| Cumulative | $0 | $25.5M | $51.1M | $76.0M | $93.7M | $93.7M | $93.7M | $93.7M |
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 $93.7M is added at exit.
| Entry \ Exit | 9.0x | 10.0x | 11.0x | 11.5x | 12.0x |
|---|---|---|---|---|---|
| 8.0x | 118% / 48.7x | 122% / 54.5x | 127% / 60.3x | 129% / 63.2x | 131% / 66.0x |
| 9.0x | 112% / 43.0x | 117% / 48.1x | 121% / 53.2x | 124% / 55.8x | 126% / 58.4x |
| 10.0x | 107% / 38.3x | 112% / 43.0x | 117% / 47.6x | 119% / 49.9x | 121% / 52.2x |
| 11.0x | 103% / 34.5x | 108% / 38.8x | 112% / 43.0x | 114% / 45.0x | 116% / 47.1x |
| 12.0x | 99% / 31.4x | 104% / 35.2x | 108% / 39.1x | 110% / 41.0x | 112% / 43.0x |
Covenant Headroom (at 10x Entry, 6.5x Max Leverage)
Pro forma EBITDA can decline 81% before the 6.5x covenant trips. RCM uplift reduces leverage from 8.5x to 1.2x, 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 | $15.8M | — | $15.8M | 0.9% |
| Year 1 | $16.2M | +$62.5M | $78.7M | 4.4% |
| Year 2 | $16.7M | +$93.7M | $110.5M | 6.2% |
| Year 3 | $17.2M | +$93.7M | $111.0M | 6.2% |
| Year 4 | $17.7M | +$93.7M | $111.5M | 6.3% |
| Year 5 | $18.3M | +$93.7M | $112.0M | 6.3% |
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 | $17.8M | $26.7M | $35.6M | $42.8M |
| Denial Rate Reductio | $17.6M | $26.5M | $35.3M | $42.3M |
| A/R Days Reduction | $10.8M | $16.3M | $21.7M | $26.0M |
| Clean Claim Rate | $570K | $855K | $1.1M | $1.4M |
| Total | $46.9M | $70.3M | $93.7M | $112.5M |
Peer Context — Where This Hospital Sits
Key metrics vs 25 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% | -8.7% | 0.9% | 8.3% | P48 |
| Net-to-Gross | 20.5% | 17.3% | 19.2% | 22.4% | P60 |
| Occupancy | 80.3% | 61.8% | 68.7% | 75.0% | P80 |
| Rev/Bed | $1.8M | $1.1M | $1.3M | $1.7M | P80 |
| Exp/Bed | $1.8M | $1.1M | $1.3M | $1.8M | P72 |
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.