Bridge Realization Estimate
ML model predicts what fraction of the bridge is achievable (accuracy: 60%, n=5,839)
Expected realization: 65% of modeled bridge. Strengths: Occupancy Rate, Revenue per Bed. Risks: Bed Count, Commercial Payer %. Risk-adjusted uplift: $87.6M (vs $135.4M 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 | $51.5M | $51.5M | $0 | 12mo |
| Denial Rate Reduction | 12.0% DEFAULT | 6.5% BENCHMARK | $49.5M | $1.4M | $51.0M | $0 | 12mo |
| A/R Days Reduction | 52.00 DEFAULT | 38.00 BENCHMARK | $7.9M | $23.4M | $31.3M | $98.7M | 9mo |
| Clean Claim Rate | 88.0% DEFAULT | 96.0% BENCHMARK | $0 | $1.6M | $1.6M | $0 | 6mo |
| Net Collection Rate | 93.5% DEFAULT | 31.2% 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 | $25.7M | $38.6M | $51.5M | $51.5M | $51.5M | $51.5M |
| Denial Rate Reduction | $0 | $12.7M | $25.5M | $38.2M | $51.0M | $51.0M | $51.0M | $51.0M |
| A/R Days Reduction | $0 | $10.4M | $20.9M | $31.3M | $31.3M | $31.3M | $31.3M | $31.3M |
| Clean Claim Rate | $0 | $824K | $1.6M | $1.6M | $1.6M | $1.6M | $1.6M | $1.6M |
| Cumulative | $0 | $36.9M | $73.7M | $109.8M | $135.4M | $135.4M | $135.4M | $135.4M |
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 $135.4M is added at exit.
| Entry \ Exit | 9.0x | 10.0x | 11.0x | 11.5x | 12.0x |
|---|---|---|---|---|---|
| 8.0x | 285% / 841.6x | 293% / 935.5x | 300% / 1029.3x | 304% / 1076.3x | 307% / 1123.2x |
| 9.0x | 276% / 747.7x | 284% / 831.2x | 291% / 914.6x | 295% / 956.3x | 298% / 998.0x |
| 10.0x | 268% / 672.6x | 276% / 747.7x | 283% / 822.8x | 286% / 860.4x | 290% / 897.9x |
| 11.0x | 261% / 611.2x | 268% / 679.5x | 276% / 747.7x | 279% / 781.9x | 282% / 816.0x |
| 12.0x | 255% / 560.0x | 262% / 622.6x | 269% / 685.1x | 272% / 716.4x | 276% / 747.7x |
Covenant Headroom (at 10x Entry, 6.5x Max Leverage)
Pro forma EBITDA can decline 99% before the 6.5x covenant trips. RCM uplift reduces leverage from 8.5x to 0.1x, adding 8.4 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 | $1.2M | — | $1.2M | 0.0% |
| Year 1 | $1.2M | +$90.3M | $91.5M | 3.6% |
| Year 2 | $1.3M | +$135.4M | $136.7M | 5.3% |
| Year 3 | $1.3M | +$135.4M | $136.7M | 5.3% |
| Year 4 | $1.3M | +$135.4M | $136.7M | 5.3% |
| Year 5 | $1.4M | +$135.4M | $136.8M | 5.3% |
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 | $25.7M | $38.6M | $51.5M | $61.8M |
| Denial Rate Reductio | $25.5M | $38.2M | $51.0M | $61.2M |
| A/R Days Reduction | $15.7M | $23.5M | $31.3M | $37.6M |
| Clean Claim Rate | $824K | $1.2M | $1.6M | $2.0M |
| Total | $67.7M | $101.6M | $135.4M | $162.5M |
Peer Context — Where This Hospital Sits
Key metrics vs 213 size-matched peers. Low percentile on margin/efficiency metrics = more room for improvement = larger bridge opportunity.
| Metric | Hospital | P25 | P50 | P75 | Percentile |
|---|---|---|---|---|---|
| Op Margin | 0.0% | -15.5% | -4.5% | 4.5% | P61 |
| Net-to-Gross | 42.4% | 20.9% | 26.8% | 31.2% | P92 |
| Occupancy | 79.4% | 70.4% | 78.3% | 86.6% | P54 |
| Rev/Bed | $2.3M | $1.5M | $2.0M | $2.7M | P64 |
| Exp/Bed | $2.3M | $1.5M | $2.1M | $3.0M | P60 |
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.