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: $131.0M (vs $184.3M 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 | $70.1M | $70.1M | $0 | 12mo |
| Denial Rate Reduction | 12.0% DEFAULT | 6.5% BENCHMARK | $67.5M | $1.9M | $69.4M | $0 | 12mo |
| A/R Days Reduction | 52.00 DEFAULT | 38.00 BENCHMARK | $10.8M | $31.9M | $42.6M | $134.4M | 9mo |
| Clean Claim Rate | 88.0% DEFAULT | 96.0% BENCHMARK | $0 | $2.2M | $2.2M | $0 | 6mo |
| Net Collection Rate | 93.5% DEFAULT | 31.4% 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 | $17.5M | $35.0M | $52.6M | $70.1M | $70.1M | $70.1M | $70.1M |
| Denial Rate Reduction | $0 | $17.3M | $34.7M | $52.0M | $69.4M | $69.4M | $69.4M | $69.4M |
| A/R Days Reduction | $0 | $14.2M | $28.4M | $42.6M | $42.6M | $42.6M | $42.6M | $42.6M |
| Clean Claim Rate | $0 | $1.1M | $2.2M | $2.2M | $2.2M | $2.2M | $2.2M | $2.2M |
| Cumulative | $0 | $50.2M | $100.4M | $149.5M | $184.3M | $184.3M | $184.3M | $184.3M |
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 $184.3M is added at exit.
| Entry \ Exit | 9.0x | 10.0x | 11.0x | 11.5x | 12.0x |
|---|---|---|---|---|---|
| 8.0x | Loss | Loss | Loss | Loss | Loss |
| 9.0x | Loss | Loss | Loss | Loss | Loss |
| 10.0x | Loss | Loss | Loss | Loss | Loss |
| 11.0x | Loss | Loss | Loss | Loss | Loss |
| 12.0x | Loss | Loss | Loss | Loss | Loss |
Covenant Headroom (at 10x Entry, 6.5x Max Leverage)
Pro forma EBITDA can decline 0% before the 6.5x covenant trips. RCM uplift reduces leverage from 99.0x to 99.0x, adding 0.0 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 | $-1.57B | — | $-1.57B | -44.9% |
| Year 1 | $-1.62B | +$122.9M | $-1.50B | -42.8% |
| Year 2 | $-1.67B | +$184.3M | $-1.49B | -42.4% |
| Year 3 | $-1.72B | +$184.3M | $-1.54B | -43.8% |
| Year 4 | $-1.77B | +$184.3M | $-1.59B | -45.3% |
| Year 5 | $-1.82B | +$184.3M | $-1.64B | -46.8% |
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 | $35.0M | $52.6M | $70.1M | $84.1M |
| Denial Rate Reductio | $34.7M | $52.0M | $69.4M | $83.3M |
| A/R Days Reduction | $21.3M | $32.0M | $42.6M | $51.2M |
| Clean Claim Rate | $1.1M | $1.7M | $2.2M | $2.7M |
| Total | $92.2M | $138.3M | $184.3M | $221.2M |
Peer Context — Where This Hospital Sits
Key metrics vs 8 size-matched peers. Low percentile on margin/efficiency metrics = more room for improvement = larger bridge opportunity.
| Metric | Hospital | P25 | P50 | P75 | Percentile |
|---|---|---|---|---|---|
| Op Margin | -44.9% | -35.7% | -23.6% | -17.4% | P0 |
| Net-to-Gross | 29.5% | 30.1% | 32.5% | 43.1% | P0 |
| Occupancy | 92.6% | 81.2% | 91.3% | 94.6% | P62 |
| Rev/Bed | $3.5M | $1.7M | $2.4M | $3.2M | P86 |
| Exp/Bed | $5.1M | $1.2M | $2.8M | $3.8M | P88 |
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.