Bridge Realization Estimate
ML model predicts what fraction of the bridge is achievable (accuracy: 60%, n=5,839)
Expected realization: 83% of modeled bridge. Strengths: Revenue per Bed. Risks: Occupancy Rate, Net-to-Gross Ratio. Risk-adjusted uplift: $60.2M (vs $72.8M 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 | $27.7M | $27.7M | $0 | 12mo |
| Denial Rate Reduction | 12.0% DEFAULT | 6.5% BENCHMARK | $26.6M | $761K | $27.4M | $0 | 12mo |
| A/R Days Reduction | 52.00 DEFAULT | 38.00 BENCHMARK | $4.2M | $12.6M | $16.8M | $53.1M | 9mo |
| Clean Claim Rate | 88.0% DEFAULT | 96.0% BENCHMARK | $0 | $886K | $886K | $0 | 6mo |
| Net Collection Rate | 93.5% DEFAULT | 39.9% 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 | $6.9M | $13.8M | $20.8M | $27.7M | $27.7M | $27.7M | $27.7M |
| Denial Rate Reduction | $0 | $6.8M | $13.7M | $20.5M | $27.4M | $27.4M | $27.4M | $27.4M |
| A/R Days Reduction | $0 | $5.6M | $11.2M | $16.8M | $16.8M | $16.8M | $16.8M | $16.8M |
| Clean Claim Rate | $0 | $443K | $886K | $886K | $886K | $886K | $886K | $886K |
| Cumulative | $0 | $19.8M | $39.6M | $59.0M | $72.8M | $72.8M | $72.8M | $72.8M |
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 $72.8M is added at exit.
| Entry \ Exit | 9.0x | 10.0x | 11.0x | 11.5x | 12.0x |
|---|---|---|---|---|---|
| 8.0x | 42% / 5.7x | 46% / 6.7x | 50% / 7.7x | 52% / 8.2x | 54% / 8.7x |
| 9.0x | 36% / 4.7x | 41% / 5.6x | 45% / 6.5x | 47% / 6.9x | 49% / 7.4x |
| 10.0x | 31% / 3.9x | 36% / 4.7x | 41% / 5.5x | 43% / 5.9x | 45% / 6.3x |
| 11.0x | 27% / 3.3x | 32% / 4.0x | 36% / 4.7x | 38% / 5.1x | 40% / 5.4x |
| 12.0x | 22% / 2.7x | 28% / 3.4x | 32% / 4.0x | 34% / 4.4x | 36% / 4.7x |
Covenant Headroom (at 10x Entry, 6.5x Max Leverage)
Pro forma EBITDA can decline -22% before the 6.5x covenant trips. RCM uplift reduces leverage from 8.5x to 7.9x, adding 0.5 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 | $1.11B | — | $1.11B | 80.5% |
| Year 1 | $1.15B | +$48.5M | $1.20B | 86.4% |
| Year 2 | $1.18B | +$72.8M | $1.25B | 90.6% |
| Year 3 | $1.22B | +$72.8M | $1.29B | 93.2% |
| Year 4 | $1.25B | +$72.8M | $1.33B | 95.8% |
| Year 5 | $1.29B | +$72.8M | $1.36B | 98.5% |
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 | $13.8M | $20.8M | $27.7M | $33.2M |
| Denial Rate Reductio | $13.7M | $20.5M | $27.4M | $32.9M |
| A/R Days Reduction | $8.4M | $12.6M | $16.8M | $20.2M |
| Clean Claim Rate | $443K | $664K | $886K | $1.1M |
| Total | $36.4M | $54.6M | $72.8M | $87.4M |
Peer Context — Where This Hospital Sits
Key metrics vs 70 size-matched peers. Low percentile on margin/efficiency metrics = more room for improvement = larger bridge opportunity.
| Metric | Hospital | P25 | P50 | P75 | Percentile |
|---|---|---|---|---|---|
| Op Margin | 80.5% | -22.1% | -9.3% | 2.5% | P96 |
| Net-to-Gross | 63.4% | 22.8% | 30.2% | 39.9% | P93 |
| Occupancy | 15.8% | 32.8% | 43.5% | 59.3% | P9 |
| Rev/Bed | $19.0M | $637K | $997K | $1.6M | P99 |
| Exp/Bed | $3.7M | $581K | $1.2M | $1.7M | P96 |
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.