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: $40.3M (vs $57.0M 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 | $21.7M | $21.7M | $0 | 12mo |
| Denial Rate Reduction | 12.0% DEFAULT | 6.5% BENCHMARK | $20.8M | $596K | $21.4M | $0 | 12mo |
| A/R Days Reduction | 52.00 DEFAULT | 38.00 BENCHMARK | $3.3M | $9.9M | $13.2M | $41.5M | 9mo |
| Clean Claim Rate | 88.0% DEFAULT | 96.0% BENCHMARK | $0 | $693K | $693K | $0 | 6mo |
| Net Collection Rate | 93.5% DEFAULT | 30.0% 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 | $5.4M | $10.8M | $16.2M | $21.7M | $21.7M | $21.7M | $21.7M |
| Denial Rate Reduction | $0 | $5.4M | $10.7M | $16.1M | $21.4M | $21.4M | $21.4M | $21.4M |
| A/R Days Reduction | $0 | $4.4M | $8.8M | $13.2M | $13.2M | $13.2M | $13.2M | $13.2M |
| Clean Claim Rate | $0 | $347K | $693K | $693K | $693K | $693K | $693K | $693K |
| Cumulative | $0 | $15.5M | $31.0M | $46.2M | $57.0M | $57.0M | $57.0M | $57.0M |
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 $57.0M is added at exit.
| Entry \ Exit | 9.0x | 10.0x | 11.0x | 11.5x | 12.0x |
|---|---|---|---|---|---|
| 8.0x | 50% / 7.7x | 55% / 8.9x | 59% / 10.1x | 61% / 10.8x | 63% / 11.3x |
| 9.0x | 45% / 6.5x | 50% / 7.6x | 54% / 8.7x | 56% / 9.2x | 58% / 9.7x |
| 10.0x | 41% / 5.5x | 45% / 6.5x | 49% / 7.5x | 51% / 8.0x | 53% / 8.4x |
| 11.0x | 36% / 4.7x | 41% / 5.6x | 45% / 6.5x | 47% / 6.9x | 49% / 7.4x |
| 12.0x | 32% / 4.0x | 37% / 4.9x | 42% / 5.7x | 43% / 6.1x | 45% / 6.5x |
Covenant Headroom (at 10x Entry, 6.5x Max Leverage)
Pro forma EBITDA can decline 3% before the 6.5x covenant trips. RCM uplift reduces leverage from 8.5x to 6.3x, adding 2.1 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 | $168.4M | — | $168.4M | 15.6% |
| Year 1 | $173.5M | +$38.0M | $211.5M | 19.5% |
| Year 2 | $178.7M | +$57.0M | $235.6M | 21.8% |
| Year 3 | $184.0M | +$57.0M | $241.0M | 22.3% |
| Year 4 | $189.6M | +$57.0M | $246.5M | 22.8% |
| Year 5 | $195.2M | +$57.0M | $252.2M | 23.3% |
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 | $10.8M | $16.2M | $21.7M | $26.0M |
| Denial Rate Reductio | $10.7M | $16.1M | $21.4M | $25.7M |
| A/R Days Reduction | $6.6M | $9.9M | $13.2M | $15.8M |
| Clean Claim Rate | $347K | $520K | $693K | $832K |
| Total | $28.5M | $42.7M | $57.0M | $68.4M |
Peer Context — Where This Hospital Sits
Key metrics vs 29 size-matched peers. Low percentile on margin/efficiency metrics = more room for improvement = larger bridge opportunity.
| Metric | Hospital | P25 | P50 | P75 | Percentile |
|---|---|---|---|---|---|
| Op Margin | 15.6% | -13.2% | -8.2% | 2.0% | P93 |
| Net-to-Gross | 32.2% | 20.8% | 25.1% | 30.0% | P82 |
| Occupancy | 82.9% | 65.8% | 71.9% | 82.9% | P72 |
| Rev/Bed | $2.0M | $1.4M | $1.9M | $2.7M | P54 |
| Exp/Bed | $1.7M | $1.5M | $1.8M | $3.0M | P38 |
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.