Bridge Realization Estimate
ML model predicts what fraction of the bridge is achievable (accuracy: 60%, n=5,839)
Expected realization: 59% of modeled bridge. Strengths: Occupancy Rate. Risks: Bed Count, Commercial Payer %. Risk-adjusted uplift: $80.6M (vs $136.2M 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 | $51.8M | $51.8M | $0 | 12mo |
| Denial Rate Reduction | 12.0% DEFAULT | 6.5% BENCHMARK | $49.9M | $1.4M | $51.3M | $0 | 12mo |
| A/R Days Reduction | 52.00 DEFAULT | 38.00 BENCHMARK | $7.9M | $23.6M | $31.5M | $99.3M | 9mo |
| Clean Claim Rate | 88.0% DEFAULT | 96.0% BENCHMARK | $0 | $1.7M | $1.7M | $0 | 6mo |
| Net Collection Rate | 93.5% DEFAULT | 29.8% 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 | $12.9M | $25.9M | $38.8M | $51.8M | $51.8M | $51.8M | $51.8M |
| Denial Rate Reduction | $0 | $12.8M | $25.6M | $38.5M | $51.3M | $51.3M | $51.3M | $51.3M |
| A/R Days Reduction | $0 | $10.5M | $21.0M | $31.5M | $31.5M | $31.5M | $31.5M | $31.5M |
| Clean Claim Rate | $0 | $829K | $1.7M | $1.7M | $1.7M | $1.7M | $1.7M | $1.7M |
| Cumulative | $0 | $37.1M | $74.2M | $110.5M | $136.2M | $136.2M | $136.2M | $136.2M |
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 $136.2M is added at exit.
| Entry \ Exit | 9.0x | 10.0x | 11.0x | 11.5x | 12.0x |
|---|---|---|---|---|---|
| 8.0x | 90% / 24.8x | 95% / 27.9x | 99% / 31.0x | 101% / 32.5x | 103% / 34.1x |
| 9.0x | 85% / 21.6x | 89% / 24.4x | 94% / 27.2x | 96% / 28.6x | 97% / 29.9x |
| 10.0x | 80% / 19.2x | 85% / 21.6x | 89% / 24.1x | 91% / 25.4x | 93% / 26.6x |
| 11.0x | 76% / 17.1x | 81% / 19.4x | 85% / 21.6x | 87% / 22.8x | 89% / 23.9x |
| 12.0x | 73% / 15.4x | 77% / 17.5x | 81% / 19.6x | 83% / 20.6x | 85% / 21.6x |
Covenant Headroom (at 10x Entry, 6.5x Max Leverage)
Pro forma EBITDA can decline 65% before the 6.5x covenant trips. RCM uplift reduces leverage from 8.5x to 2.3x, adding 6.2 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 | $51.0M | — | $51.0M | 2.0% |
| Year 1 | $52.5M | +$90.8M | $143.4M | 5.5% |
| Year 2 | $54.1M | +$136.2M | $190.4M | 7.4% |
| Year 3 | $55.7M | +$136.2M | $192.0M | 7.4% |
| Year 4 | $57.4M | +$136.2M | $193.7M | 7.5% |
| Year 5 | $59.1M | +$136.2M | $195.4M | 7.5% |
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 | $25.9M | $38.8M | $51.8M | $62.2M |
| Denial Rate Reductio | $25.6M | $38.5M | $51.3M | $61.5M |
| A/R Days Reduction | $15.8M | $23.6M | $31.5M | $37.8M |
| Clean Claim Rate | $829K | $1.2M | $1.7M | $2.0M |
| Total | $68.1M | $102.2M | $136.2M | $163.5M |
Peer Context — Where This Hospital Sits
Key metrics vs 94 size-matched peers. Low percentile on margin/efficiency metrics = more room for improvement = larger bridge opportunity.
| Metric | Hospital | P25 | P50 | P75 | Percentile |
|---|---|---|---|---|---|
| Op Margin | 2.0% | -15.9% | -5.4% | 4.2% | P69 |
| Net-to-Gross | 26.3% | 20.4% | 26.3% | 29.8% | P49 |
| Occupancy | 70.9% | 70.3% | 78.3% | 86.6% | P26 |
| Rev/Bed | $1.8M | $1.5M | $2.0M | $2.7M | P39 |
| Exp/Bed | $1.7M | $1.5M | $2.1M | $3.0M | P34 |
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.