Bridge Realization Estimate
ML model predicts what fraction of the bridge is achievable (accuracy: 60%, n=5,839)
Expected realization: 78% of modeled bridge. Strengths: Occupancy Rate, Revenue per Bed. Risks: Bed Count. Risk-adjusted uplift: $83.7M (vs $107.8M 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 | $41.0M | $41.0M | $0 | 12mo |
| Denial Rate Reduction | 12.0% DEFAULT | 6.5% BENCHMARK | $39.5M | $1.1M | $40.6M | $0 | 12mo |
| A/R Days Reduction | 52.00 DEFAULT | 38.00 BENCHMARK | $6.3M | $18.7M | $24.9M | $78.6M | 9mo |
| Clean Claim Rate | 88.0% DEFAULT | 96.0% BENCHMARK | $0 | $1.3M | $1.3M | $0 | 6mo |
| Net Collection Rate | 93.5% DEFAULT | 32.8% 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 | $10.2M | $20.5M | $30.7M | $41.0M | $41.0M | $41.0M | $41.0M |
| Denial Rate Reduction | $0 | $10.1M | $20.3M | $30.4M | $40.6M | $40.6M | $40.6M | $40.6M |
| A/R Days Reduction | $0 | $8.3M | $16.6M | $24.9M | $24.9M | $24.9M | $24.9M | $24.9M |
| Clean Claim Rate | $0 | $656K | $1.3M | $1.3M | $1.3M | $1.3M | $1.3M | $1.3M |
| Cumulative | $0 | $29.4M | $58.7M | $87.4M | $107.8M | $107.8M | $107.8M | $107.8M |
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 $107.8M is added at exit.
| Entry \ Exit | 9.0x | 10.0x | 11.0x | 11.5x | 12.0x |
|---|---|---|---|---|---|
| 8.0x | 43% / 6.0x | 48% / 7.1x | 52% / 8.1x | 54% / 8.6x | 56% / 9.1x |
| 9.0x | 38% / 5.0x | 43% / 5.9x | 47% / 6.8x | 49% / 7.3x | 51% / 7.8x |
| 10.0x | 33% / 4.2x | 38% / 5.0x | 42% / 5.8x | 44% / 6.2x | 46% / 6.7x |
| 11.0x | 28% / 3.5x | 34% / 4.2x | 38% / 5.0x | 40% / 5.4x | 42% / 5.8x |
| 12.0x | 24% / 2.9x | 29% / 3.6x | 34% / 4.3x | 36% / 4.7x | 38% / 5.0x |
Covenant Headroom (at 10x Entry, 6.5x Max Leverage)
Pro forma EBITDA can decline -17% before the 6.5x covenant trips. RCM uplift reduces leverage from 8.5x to 7.6x, adding 0.8 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 | $986.0M | — | $986.0M | 48.1% |
| Year 1 | $1.02B | +$71.9M | $1.09B | 53.1% |
| Year 2 | $1.05B | +$107.8M | $1.15B | 56.3% |
| Year 3 | $1.08B | +$107.8M | $1.19B | 57.8% |
| Year 4 | $1.11B | +$107.8M | $1.22B | 59.4% |
| Year 5 | $1.14B | +$107.8M | $1.25B | 61.0% |
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 | $20.5M | $30.7M | $41.0M | $49.2M |
| Denial Rate Reductio | $20.3M | $30.4M | $40.6M | $48.7M |
| A/R Days Reduction | $12.5M | $18.7M | $24.9M | $29.9M |
| Clean Claim Rate | $656K | $984K | $1.3M | $1.6M |
| Total | $53.9M | $80.9M | $107.8M | $129.4M |
Peer Context — Where This Hospital Sits
Key metrics vs 1332 size-matched peers. Low percentile on margin/efficiency metrics = more room for improvement = larger bridge opportunity.
| Metric | Hospital | P25 | P50 | P75 | Percentile |
|---|---|---|---|---|---|
| Op Margin | 48.1% | -13.2% | -3.8% | 5.4% | P100 |
| Net-to-Gross | 55.9% | 18.6% | 25.2% | 32.8% | P94 |
| Occupancy | 85.9% | 58.0% | 69.8% | 78.1% | P89 |
| Rev/Bed | $5.8M | $1.1M | $1.5M | $2.0M | P99 |
| Exp/Bed | $3.0M | $1.1M | $1.5M | $2.1M | P92 |
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.