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, Net-to-Gross Ratio. Risks: Bed Count, Commercial Payer %. Risk-adjusted uplift: $17.0M (vs $25.3M 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 | $9.6M | $9.6M | $0 | 12mo |
| Denial Rate Reduction | 12.0% DEFAULT | 6.5% BENCHMARK | $9.3M | $264K | $9.5M | $0 | 12mo |
| A/R Days Reduction | 52.00 DEFAULT | 38.00 BENCHMARK | $1.5M | $4.4M | $5.9M | $18.4M | 9mo |
| Clean Claim Rate | 88.0% DEFAULT | 96.0% BENCHMARK | $0 | $308K | $308K | $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 | $2.4M | $4.8M | $7.2M | $9.6M | $9.6M | $9.6M | $9.6M |
| Denial Rate Reduction | $0 | $2.4M | $4.8M | $7.1M | $9.5M | $9.5M | $9.5M | $9.5M |
| A/R Days Reduction | $0 | $2.0M | $3.9M | $5.9M | $5.9M | $5.9M | $5.9M | $5.9M |
| Clean Claim Rate | $0 | $154K | $308K | $308K | $308K | $308K | $308K | $308K |
| Cumulative | $0 | $6.9M | $13.8M | $20.5M | $25.3M | $25.3M | $25.3M | $25.3M |
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 $25.3M is added at exit.
| Entry \ Exit | 9.0x | 10.0x | 11.0x | 11.5x | 12.0x |
|---|---|---|---|---|---|
| 8.0x | 45% / 6.3x | 49% / 7.4x | 53% / 8.5x | 55% / 9.0x | 57% / 9.5x |
| 9.0x | 39% / 5.3x | 44% / 6.2x | 48% / 7.2x | 50% / 7.6x | 52% / 8.1x |
| 10.0x | 35% / 4.4x | 39% / 5.3x | 44% / 6.1x | 46% / 6.5x | 47% / 7.0x |
| 11.0x | 30% / 3.7x | 35% / 4.5x | 39% / 5.3x | 41% / 5.7x | 43% / 6.0x |
| 12.0x | 26% / 3.1x | 31% / 3.9x | 35% / 4.6x | 38% / 4.9x | 39% / 5.3x |
Covenant Headroom (at 10x Entry, 6.5x Max Leverage)
Pro forma EBITDA can decline -13% before the 6.5x covenant trips. RCM uplift reduces leverage from 8.5x to 7.3x, adding 1.1 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 | $167.2M | — | $167.2M | 34.8% |
| Year 1 | $172.2M | +$16.9M | $189.1M | 39.3% |
| Year 2 | $177.4M | +$25.3M | $202.7M | 42.1% |
| Year 3 | $182.7M | +$25.3M | $208.0M | 43.3% |
| Year 4 | $188.2M | +$25.3M | $213.5M | 44.4% |
| Year 5 | $193.8M | +$25.3M | $219.1M | 45.6% |
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 | $4.8M | $7.2M | $9.6M | $11.5M |
| Denial Rate Reductio | $4.8M | $7.1M | $9.5M | $11.4M |
| A/R Days Reduction | $2.9M | $4.4M | $5.9M | $7.0M |
| Clean Claim Rate | $154K | $231K | $308K | $369K |
| Total | $12.6M | $19.0M | $25.3M | $30.4M |
Peer Context — Where This Hospital Sits
Key metrics vs 92 size-matched peers. Low percentile on margin/efficiency metrics = more room for improvement = larger bridge opportunity.
| Metric | Hospital | P25 | P50 | P75 | Percentile |
|---|---|---|---|---|---|
| Op Margin | 34.8% | -4.7% | 4.2% | 18.1% | P93 |
| Net-to-Gross | 8.9% | 10.0% | 14.4% | 20.5% | P10 |
| Occupancy | 63.2% | 58.2% | 66.3% | 75.4% | P37 |
| Rev/Bed | $1.2M | $922K | $1.2M | $1.4M | P51 |
| Exp/Bed | $778K | $826K | $1.0M | $1.3M | P20 |
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.