Bridge Realization Estimate
ML model predicts what fraction of the bridge is achievable (accuracy: 60%, n=5,839)
Expected realization: 67% of modeled bridge. Strengths: Occupancy Rate. Risks: Bed Count. Risk-adjusted uplift: $24.2M (vs $36.2M 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 | $13.8M | $13.8M | $0 | 12mo |
| Denial Rate Reduction | 12.0% DEFAULT | 6.5% BENCHMARK | $13.3M | $379K | $13.6M | $0 | 12mo |
| A/R Days Reduction | 52.00 DEFAULT | 38.00 BENCHMARK | $2.1M | $6.3M | $8.4M | $26.4M | 9mo |
| Clean Claim Rate | 88.0% DEFAULT | 96.0% BENCHMARK | $0 | $441K | $441K | $0 | 6mo |
| Net Collection Rate | 93.5% DEFAULT | 20.4% 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 | $3.4M | $6.9M | $10.3M | $13.8M | $13.8M | $13.8M | $13.8M |
| Denial Rate Reduction | $0 | $3.4M | $6.8M | $10.2M | $13.6M | $13.6M | $13.6M | $13.6M |
| A/R Days Reduction | $0 | $2.8M | $5.6M | $8.4M | $8.4M | $8.4M | $8.4M | $8.4M |
| Clean Claim Rate | $0 | $220K | $441K | $441K | $441K | $441K | $441K | $441K |
| Cumulative | $0 | $9.9M | $19.7M | $29.4M | $36.2M | $36.2M | $36.2M | $36.2M |
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 $36.2M is added at exit.
| Entry \ Exit | 9.0x | 10.0x | 11.0x | 11.5x | 12.0x |
|---|---|---|---|---|---|
| 8.0x | 54% / 8.5x | 58% / 9.8x | 62% / 11.2x | 64% / 11.8x | 66% / 12.5x |
| 9.0x | 49% / 7.2x | 53% / 8.4x | 57% / 9.6x | 59% / 10.1x | 61% / 10.7x |
| 10.0x | 44% / 6.2x | 49% / 7.2x | 53% / 8.3x | 54% / 8.8x | 56% / 9.3x |
| 11.0x | 40% / 5.3x | 44% / 6.3x | 49% / 7.2x | 50% / 7.7x | 52% / 8.2x |
| 12.0x | 36% / 4.6x | 41% / 5.5x | 45% / 6.4x | 47% / 6.8x | 49% / 7.2x |
Covenant Headroom (at 10x Entry, 6.5x Max Leverage)
Pro forma EBITDA can decline 10% before the 6.5x covenant trips. RCM uplift reduces leverage from 8.5x to 5.8x, adding 2.6 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 | $80.0M | — | $80.0M | 11.6% |
| Year 1 | $82.4M | +$24.1M | $106.6M | 15.5% |
| Year 2 | $84.9M | +$36.2M | $121.1M | 17.6% |
| Year 3 | $87.4M | +$36.2M | $123.7M | 18.0% |
| Year 4 | $90.1M | +$36.2M | $126.3M | 18.3% |
| Year 5 | $92.8M | +$36.2M | $129.0M | 18.7% |
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 | $6.9M | $10.3M | $13.8M | $16.5M |
| Denial Rate Reductio | $6.8M | $10.2M | $13.6M | $16.4M |
| A/R Days Reduction | $4.2M | $6.3M | $8.4M | $10.1M |
| Clean Claim Rate | $220K | $330K | $441K | $529K |
| Total | $18.1M | $27.2M | $36.2M | $43.5M |
Peer Context — Where This Hospital Sits
Key metrics vs 97 size-matched peers. Low percentile on margin/efficiency metrics = more room for improvement = larger bridge opportunity.
| Metric | Hospital | P25 | P50 | P75 | Percentile |
|---|---|---|---|---|---|
| Op Margin | 11.6% | -4.7% | 4.5% | 19.1% | P60 |
| Net-to-Gross | 26.6% | 10.0% | 14.2% | 20.4% | P93 |
| Occupancy | 57.4% | 57.4% | 65.7% | 75.3% | P26 |
| Rev/Bed | $1.8M | $903K | $1.2M | $1.4M | P91 |
| Exp/Bed | $1.6M | $823K | $1.0M | $1.3M | P85 |
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.