Bridge Realization Estimate
ML model predicts what fraction of the bridge is achievable (accuracy: 60%, n=5,839)
Expected realization: 70% of modeled bridge. Strengths: Occupancy Rate, Revenue per Bed. Risks: Bed Count. Risk-adjusted uplift: $42.1M (vs $59.9M 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 | $22.8M | $22.8M | $0 | 12mo |
| Denial Rate Reduction | 12.0% DEFAULT | 6.5% BENCHMARK | $21.9M | $627K | $22.6M | $0 | 12mo |
| A/R Days Reduction | 52.00 DEFAULT | 38.00 BENCHMARK | $3.5M | $10.4M | $13.9M | $43.7M | 9mo |
| Clean Claim Rate | 88.0% DEFAULT | 96.0% BENCHMARK | $0 | $729K | $729K | $0 | 6mo |
| Net Collection Rate | 93.5% DEFAULT | 30.5% 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 | $5.7M | $11.4M | $17.1M | $22.8M | $22.8M | $22.8M | $22.8M |
| Denial Rate Reduction | $0 | $5.6M | $11.3M | $16.9M | $22.6M | $22.6M | $22.6M | $22.6M |
| A/R Days Reduction | $0 | $4.6M | $9.2M | $13.9M | $13.9M | $13.9M | $13.9M | $13.9M |
| Clean Claim Rate | $0 | $365K | $729K | $729K | $729K | $729K | $729K | $729K |
| Cumulative | $0 | $16.3M | $32.6M | $48.6M | $59.9M | $59.9M | $59.9M | $59.9M |
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 $59.9M is added at exit.
| Entry \ Exit | 9.0x | 10.0x | 11.0x | 11.5x | 12.0x |
|---|---|---|---|---|---|
| 8.0x | 126% / 59.0x | 131% / 65.9x | 136% / 72.8x | 138% / 76.3x | 140% / 79.7x |
| 9.0x | 120% / 52.1x | 125% / 58.2x | 130% / 64.4x | 132% / 67.4x | 134% / 70.5x |
| 10.0x | 116% / 46.5x | 120% / 52.1x | 125% / 57.6x | 127% / 60.4x | 129% / 63.1x |
| 11.0x | 111% / 42.0x | 116% / 47.0x | 120% / 52.1x | 123% / 54.6x | 125% / 57.1x |
| 12.0x | 107% / 38.2x | 112% / 42.9x | 116% / 47.5x | 118% / 49.8x | 120% / 52.1x |
Covenant Headroom (at 10x Entry, 6.5x Max Leverage)
Pro forma EBITDA can decline 84% before the 6.5x covenant trips. RCM uplift reduces leverage from 8.5x to 1.0x, adding 7.4 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 | $8.2M | — | $8.2M | 0.7% |
| Year 1 | $8.4M | +$40.0M | $48.4M | 4.2% |
| Year 2 | $8.7M | +$59.9M | $68.6M | 6.0% |
| Year 3 | $8.9M | +$59.9M | $68.9M | 6.0% |
| Year 4 | $9.2M | +$59.9M | $69.1M | 6.1% |
| Year 5 | $9.5M | +$59.9M | $69.4M | 6.1% |
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 | $11.4M | $17.1M | $22.8M | $27.3M |
| Denial Rate Reductio | $11.3M | $16.9M | $22.6M | $27.1M |
| A/R Days Reduction | $6.9M | $10.4M | $13.9M | $16.6M |
| Clean Claim Rate | $365K | $547K | $729K | $875K |
| Total | $30.0M | $45.0M | $59.9M | $71.9M |
Peer Context — Where This Hospital Sits
Key metrics vs 13 size-matched peers. Low percentile on margin/efficiency metrics = more room for improvement = larger bridge opportunity.
| Metric | Hospital | P25 | P50 | P75 | Percentile |
|---|---|---|---|---|---|
| Op Margin | 0.7% | -0.3% | 3.8% | 9.7% | P31 |
| Net-to-Gross | 31.8% | 24.3% | 26.9% | 30.5% | P85 |
| Occupancy | 79.0% | 63.2% | 71.7% | 73.2% | P92 |
| Rev/Bed | $2.1M | $1.7M | $1.8M | $2.1M | P69 |
| Exp/Bed | $2.1M | $1.5M | $1.7M | $2.2M | P62 |
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.