Bridge Realization Estimate
ML model predicts what fraction of the bridge is achievable (accuracy: 60%, n=5,839)
Expected realization: 74% of modeled bridge. Strengths: Occupancy Rate. Risks: Bed Count, Commercial Payer %. Risk-adjusted uplift: $20.2M (vs $27.1M 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 | $10.3M | $10.3M | $0 | 12mo |
| Denial Rate Reduction | 12.0% DEFAULT | 6.5% BENCHMARK | $9.9M | $284K | $10.2M | $0 | 12mo |
| A/R Days Reduction | 52.00 DEFAULT | 38.00 BENCHMARK | $1.6M | $4.7M | $6.3M | $19.8M | 9mo |
| Clean Claim Rate | 88.0% DEFAULT | 96.0% BENCHMARK | $0 | $330K | $330K | $0 | 6mo |
| Net Collection Rate | 93.5% DEFAULT | 27.5% 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 | $2.6M | $5.2M | $7.7M | $10.3M | $10.3M | $10.3M | $10.3M |
| Denial Rate Reduction | $0 | $2.6M | $5.1M | $7.7M | $10.2M | $10.2M | $10.2M | $10.2M |
| A/R Days Reduction | $0 | $2.1M | $4.2M | $6.3M | $6.3M | $6.3M | $6.3M | $6.3M |
| Clean Claim Rate | $0 | $165K | $330K | $330K | $330K | $330K | $330K | $330K |
| Cumulative | $0 | $7.4M | $14.8M | $22.0M | $27.1M | $27.1M | $27.1M | $27.1M |
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 $27.1M is added at exit.
| Entry \ Exit | 9.0x | 10.0x | 11.0x | 11.5x | 12.0x |
|---|---|---|---|---|---|
| 8.0x | 52% / 8.1x | 57% / 9.4x | 61% / 10.7x | 62% / 11.3x | 64% / 11.9x |
| 9.0x | 47% / 6.9x | 52% / 8.0x | 56% / 9.1x | 57% / 9.7x | 59% / 10.2x |
| 10.0x | 42% / 5.9x | 47% / 6.9x | 51% / 7.9x | 53% / 8.4x | 55% / 8.9x |
| 11.0x | 38% / 5.0x | 43% / 6.0x | 47% / 6.9x | 49% / 7.3x | 51% / 7.8x |
| 12.0x | 34% / 4.3x | 39% / 5.2x | 43% / 6.0x | 45% / 6.5x | 47% / 6.9x |
Covenant Headroom (at 10x Entry, 6.5x Max Leverage)
Pro forma EBITDA can decline 7% before the 6.5x covenant trips. RCM uplift reduces leverage from 8.5x to 6.1x, adding 2.4 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 | $68.2M | — | $68.2M | 13.2% |
| Year 1 | $70.3M | +$18.1M | $88.4M | 17.1% |
| Year 2 | $72.4M | +$27.1M | $99.5M | 19.3% |
| Year 3 | $74.6M | +$27.1M | $101.7M | 19.7% |
| Year 4 | $76.8M | +$27.1M | $103.9M | 20.1% |
| Year 5 | $79.1M | +$27.1M | $106.2M | 20.6% |
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 | $5.2M | $7.7M | $10.3M | $12.4M |
| Denial Rate Reductio | $5.1M | $7.7M | $10.2M | $12.3M |
| A/R Days Reduction | $3.1M | $4.7M | $6.3M | $7.5M |
| Clean Claim Rate | $165K | $248K | $330K | $396K |
| Total | $13.6M | $20.4M | $27.1M | $32.6M |
Peer Context — Where This Hospital Sits
Key metrics vs 44 size-matched peers. Low percentile on margin/efficiency metrics = more room for improvement = larger bridge opportunity.
| Metric | Hospital | P25 | P50 | P75 | Percentile |
|---|---|---|---|---|---|
| Op Margin | 13.2% | -14.4% | -2.5% | 5.5% | P82 |
| Net-to-Gross | 18.5% | 18.5% | 21.9% | 27.5% | P25 |
| Occupancy | 89.1% | 65.2% | 76.3% | 80.3% | P89 |
| Rev/Bed | $1.8M | $1.0M | $1.6M | $1.8M | P68 |
| Exp/Bed | $1.5M | $1.2M | $1.5M | $1.9M | P48 |
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.