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. Risks: Bed Count. Risk-adjusted uplift: $51.1M (vs $72.2M 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 | $27.5M | $27.5M | $0 | 12mo |
| Denial Rate Reduction | 12.0% DEFAULT | 6.5% BENCHMARK | $26.4M | $755K | $27.2M | $0 | 12mo |
| A/R Days Reduction | 52.00 DEFAULT | 38.00 BENCHMARK | $4.2M | $12.5M | $16.7M | $52.7M | 9mo |
| Clean Claim Rate | 88.0% DEFAULT | 96.0% BENCHMARK | $0 | $879K | $879K | $0 | 6mo |
| Net Collection Rate | 93.5% DEFAULT | 31.7% 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 | $13.7M | $20.6M | $27.5M | $27.5M | $27.5M | $27.5M |
| Denial Rate Reduction | $0 | $6.8M | $13.6M | $20.4M | $27.2M | $27.2M | $27.2M | $27.2M |
| A/R Days Reduction | $0 | $5.6M | $11.1M | $16.7M | $16.7M | $16.7M | $16.7M | $16.7M |
| Clean Claim Rate | $0 | $439K | $879K | $879K | $879K | $879K | $879K | $879K |
| Cumulative | $0 | $19.7M | $39.3M | $58.6M | $72.2M | $72.2M | $72.2M | $72.2M |
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 $72.2M is added at exit.
| Entry \ Exit | 9.0x | 10.0x | 11.0x | 11.5x | 12.0x |
|---|---|---|---|---|---|
| 8.0x | 68% / 13.4x | 72% / 15.3x | 76% / 17.1x | 78% / 18.0x | 80% / 19.0x |
| 9.0x | 63% / 11.6x | 68% / 13.2x | 72% / 14.9x | 73% / 15.7x | 75% / 16.5x |
| 10.0x | 59% / 10.1x | 63% / 11.6x | 67% / 13.1x | 69% / 13.8x | 71% / 14.5x |
| 11.0x | 55% / 8.9x | 59% / 10.2x | 63% / 11.6x | 65% / 12.2x | 67% / 12.9x |
| 12.0x | 51% / 7.9x | 56% / 9.1x | 60% / 10.3x | 61% / 10.9x | 63% / 11.6x |
Covenant Headroom (at 10x Entry, 6.5x Max Leverage)
Pro forma EBITDA can decline 39% before the 6.5x covenant trips. RCM uplift reduces leverage from 8.5x to 4.0x, adding 4.5 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 | $64.5M | — | $64.5M | 4.7% |
| Year 1 | $66.4M | +$48.1M | $114.6M | 8.3% |
| Year 2 | $68.4M | +$72.2M | $140.6M | 10.2% |
| Year 3 | $70.5M | +$72.2M | $142.7M | 10.4% |
| Year 4 | $72.6M | +$72.2M | $144.8M | 10.5% |
| Year 5 | $74.8M | +$72.2M | $147.0M | 10.7% |
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 | $13.7M | $20.6M | $27.5M | $32.9M |
| Denial Rate Reductio | $13.6M | $20.4M | $27.2M | $32.6M |
| A/R Days Reduction | $8.4M | $12.5M | $16.7M | $20.0M |
| Clean Claim Rate | $439K | $659K | $879K | $1.1M |
| Total | $36.1M | $54.2M | $72.2M | $86.7M |
Peer Context — Where This Hospital Sits
Key metrics vs 18 size-matched peers. Low percentile on margin/efficiency metrics = more room for improvement = larger bridge opportunity.
| Metric | Hospital | P25 | P50 | P75 | Percentile |
|---|---|---|---|---|---|
| Op Margin | 4.7% | -13.3% | -10.0% | 1.1% | P76 |
| Net-to-Gross | 31.7% | 24.3% | 28.3% | 31.7% | P71 |
| Occupancy | 91.0% | 66.9% | 74.8% | 85.2% | P83 |
| Rev/Bed | $1.9M | $1.9M | $2.2M | $2.9M | P29 |
| Exp/Bed | $1.8M | $1.7M | $2.3M | $3.2M | P39 |
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.