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: Revenue per Bed, Occupancy Rate. Risks: Bed Count, Commercial Payer %. Risk-adjusted uplift: $26.5M (vs $37.5M 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 | $14.3M | $14.3M | $0 | 12mo |
| Denial Rate Reduction | 12.0% DEFAULT | 6.5% BENCHMARK | $13.7M | $392K | $14.1M | $0 | 12mo |
| A/R Days Reduction | 52.00 DEFAULT | 38.00 BENCHMARK | $2.2M | $6.5M | $8.7M | $27.4M | 9mo |
| Clean Claim Rate | 88.0% DEFAULT | 96.0% BENCHMARK | $0 | $456K | $456K | $0 | 6mo |
| Net Collection Rate | 93.5% DEFAULT | 31.5% 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 | $3.6M | $7.1M | $10.7M | $14.3M | $14.3M | $14.3M | $14.3M |
| Denial Rate Reduction | $0 | $3.5M | $7.1M | $10.6M | $14.1M | $14.1M | $14.1M | $14.1M |
| A/R Days Reduction | $0 | $2.9M | $5.8M | $8.7M | $8.7M | $8.7M | $8.7M | $8.7M |
| Clean Claim Rate | $0 | $228K | $456K | $456K | $456K | $456K | $456K | $456K |
| Cumulative | $0 | $10.2M | $20.4M | $30.4M | $37.5M | $37.5M | $37.5M | $37.5M |
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 $37.5M is added at exit.
| Entry \ Exit | 9.0x | 10.0x | 11.0x | 11.5x | 12.0x |
|---|---|---|---|---|---|
| 8.0x | 49% / 7.3x | 53% / 8.5x | 57% / 9.7x | 59% / 10.2x | 61% / 10.8x |
| 9.0x | 44% / 6.1x | 48% / 7.2x | 52% / 8.2x | 54% / 8.7x | 56% / 9.3x |
| 10.0x | 39% / 5.2x | 44% / 6.1x | 48% / 7.1x | 50% / 7.5x | 52% / 8.0x |
| 11.0x | 35% / 4.4x | 40% / 5.3x | 44% / 6.1x | 46% / 6.6x | 48% / 7.0x |
| 12.0x | 31% / 3.8x | 36% / 4.6x | 40% / 5.3x | 42% / 5.7x | 44% / 6.1x |
Covenant Headroom (at 10x Entry, 6.5x Max Leverage)
Pro forma EBITDA can decline -1% before the 6.5x covenant trips. RCM uplift reduces leverage from 8.5x to 6.6x, adding 1.9 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 | $132.0M | — | $132.0M | 18.5% |
| Year 1 | $135.9M | +$25.0M | $160.9M | 22.6% |
| Year 2 | $140.0M | +$37.5M | $177.5M | 24.9% |
| Year 3 | $144.2M | +$37.5M | $181.7M | 25.5% |
| Year 4 | $148.5M | +$37.5M | $186.0M | 26.1% |
| Year 5 | $153.0M | +$37.5M | $190.5M | 26.7% |
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 | $7.1M | $10.7M | $14.3M | $17.1M |
| Denial Rate Reductio | $7.1M | $10.6M | $14.1M | $16.9M |
| A/R Days Reduction | $4.3M | $6.5M | $8.7M | $10.4M |
| Clean Claim Rate | $228K | $342K | $456K | $548K |
| Total | $18.8M | $28.1M | $37.5M | $45.0M |
Peer Context — Where This Hospital Sits
Key metrics vs 90 size-matched peers. Low percentile on margin/efficiency metrics = more room for improvement = larger bridge opportunity.
| Metric | Hospital | P25 | P50 | P75 | Percentile |
|---|---|---|---|---|---|
| Op Margin | 18.5% | -20.8% | -8.7% | 0.8% | P92 |
| Net-to-Gross | 31.5% | 20.6% | 24.8% | 31.5% | P75 |
| Occupancy | 61.2% | 49.2% | 59.4% | 71.9% | P53 |
| Rev/Bed | $3.1M | $711K | $1.2M | $1.6M | P95 |
| Exp/Bed | $2.5M | $765K | $1.3M | $1.7M | P91 |
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.