Bridge Realization Estimate
ML model predicts what fraction of the bridge is achievable (accuracy: 60%, n=5,839)
Expected realization: 71% of modeled bridge. Strengths: Occupancy Rate, Revenue per Bed. Risks: Bed Count. Risk-adjusted uplift: $49.2M (vs $69.6M 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 | $26.5M | $26.5M | $0 | 12mo |
| Denial Rate Reduction | 12.0% DEFAULT | 6.5% BENCHMARK | $25.5M | $727K | $26.2M | $0 | 12mo |
| A/R Days Reduction | 52.00 DEFAULT | 38.00 BENCHMARK | $4.1M | $12.0M | $16.1M | $50.7M | 9mo |
| Clean Claim Rate | 88.0% DEFAULT | 96.0% BENCHMARK | $0 | $847K | $847K | $0 | 6mo |
| Net Collection Rate | 93.5% DEFAULT | 29.1% 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 | $6.6M | $13.2M | $19.8M | $26.5M | $26.5M | $26.5M | $26.5M |
| Denial Rate Reduction | $0 | $6.5M | $13.1M | $19.6M | $26.2M | $26.2M | $26.2M | $26.2M |
| A/R Days Reduction | $0 | $5.4M | $10.7M | $16.1M | $16.1M | $16.1M | $16.1M | $16.1M |
| Clean Claim Rate | $0 | $423K | $847K | $847K | $847K | $847K | $847K | $847K |
| Cumulative | $0 | $18.9M | $37.9M | $56.4M | $69.6M | $69.6M | $69.6M | $69.6M |
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 $69.6M is added at exit.
| Entry \ Exit | 9.0x | 10.0x | 11.0x | 11.5x | 12.0x |
|---|---|---|---|---|---|
| 8.0x | 71% / 14.8x | 76% / 16.8x | 80% / 18.8x | 82% / 19.8x | 83% / 20.8x |
| 9.0x | 66% / 12.8x | 71% / 14.5x | 75% / 16.3x | 77% / 17.2x | 78% / 18.1x |
| 10.0x | 62% / 11.2x | 66% / 12.8x | 70% / 14.4x | 72% / 15.2x | 74% / 16.0x |
| 11.0x | 58% / 9.8x | 62% / 11.3x | 66% / 12.8x | 68% / 13.5x | 70% / 14.2x |
| 12.0x | 54% / 8.8x | 59% / 10.1x | 63% / 11.4x | 65% / 12.1x | 66% / 12.8x |
Covenant Headroom (at 10x Entry, 6.5x Max Leverage)
Pro forma EBITDA can decline 43% before the 6.5x covenant trips. RCM uplift reduces leverage from 8.5x to 3.7x, adding 4.8 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 | $53.4M | — | $53.4M | 4.0% |
| Year 1 | $55.0M | +$46.4M | $101.4M | 7.7% |
| Year 2 | $56.6M | +$69.6M | $126.2M | 9.5% |
| Year 3 | $58.3M | +$69.6M | $127.9M | 9.7% |
| Year 4 | $60.1M | +$69.6M | $129.7M | 9.8% |
| Year 5 | $61.9M | +$69.6M | $131.5M | 9.9% |
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 | $13.2M | $19.8M | $26.5M | $31.7M |
| Denial Rate Reductio | $13.1M | $19.6M | $26.2M | $31.4M |
| A/R Days Reduction | $8.0M | $12.1M | $16.1M | $19.3M |
| Clean Claim Rate | $423K | $635K | $847K | $1.0M |
| Total | $34.8M | $52.2M | $69.6M | $83.5M |
Peer Context — Where This Hospital Sits
Key metrics vs 27 size-matched peers. Low percentile on margin/efficiency metrics = more room for improvement = larger bridge opportunity.
| Metric | Hospital | P25 | P50 | P75 | Percentile |
|---|---|---|---|---|---|
| Op Margin | 4.0% | -8.2% | -1.0% | 5.8% | P63 |
| Net-to-Gross | 22.1% | 19.6% | 21.7% | 29.1% | P52 |
| Occupancy | 80.2% | 72.0% | 79.5% | 85.4% | P59 |
| Rev/Bed | $2.3M | $1.2M | $1.7M | $2.4M | P67 |
| Exp/Bed | $2.2M | $1.2M | $1.7M | $2.2M | P74 |
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.