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, Commercial Payer %. Risk-adjusted uplift: $35.2M (vs $49.2M 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 | $18.7M | $18.7M | $0 | 12mo |
| Denial Rate Reduction | 12.0% DEFAULT | 6.5% BENCHMARK | $18.0M | $515K | $18.5M | $0 | 12mo |
| A/R Days Reduction | 52.00 DEFAULT | 38.00 BENCHMARK | $2.9M | $8.5M | $11.4M | $35.9M | 9mo |
| Clean Claim Rate | 88.0% DEFAULT | 96.0% BENCHMARK | $0 | $599K | $599K | $0 | 6mo |
| Net Collection Rate | 93.5% DEFAULT | 32.3% 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 | $4.7M | $9.4M | $14.0M | $18.7M | $18.7M | $18.7M | $18.7M |
| Denial Rate Reduction | $0 | $4.6M | $9.3M | $13.9M | $18.5M | $18.5M | $18.5M | $18.5M |
| A/R Days Reduction | $0 | $3.8M | $7.6M | $11.4M | $11.4M | $11.4M | $11.4M | $11.4M |
| Clean Claim Rate | $0 | $300K | $599K | $599K | $599K | $599K | $599K | $599K |
| Cumulative | $0 | $13.4M | $26.8M | $39.9M | $49.2M | $49.2M | $49.2M | $49.2M |
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 $49.2M 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 | $-229.7M | — | $-229.7M | -24.5% |
| Year 1 | $-236.6M | +$32.8M | $-203.8M | -21.8% |
| Year 2 | $-243.7M | +$49.2M | $-194.5M | -20.8% |
| Year 3 | $-251.0M | +$49.2M | $-201.8M | -21.6% |
| Year 4 | $-258.6M | +$49.2M | $-209.3M | -22.4% |
| Year 5 | $-266.3M | +$49.2M | $-217.1M | -23.2% |
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 | $9.4M | $14.0M | $18.7M | $22.5M |
| Denial Rate Reductio | $9.3M | $13.9M | $18.5M | $22.2M |
| A/R Days Reduction | $5.7M | $8.5M | $11.4M | $13.7M |
| Clean Claim Rate | $300K | $449K | $599K | $719K |
| Total | $24.6M | $36.9M | $49.2M | $59.1M |
Peer Context — Where This Hospital Sits
Key metrics vs 32 size-matched peers. Low percentile on margin/efficiency metrics = more room for improvement = larger bridge opportunity.
| Metric | Hospital | P25 | P50 | P75 | Percentile |
|---|---|---|---|---|---|
| Op Margin | -24.5% | -11.3% | -6.9% | -1.7% | P12 |
| Net-to-Gross | 26.1% | 26.3% | 30.0% | 32.3% | P22 |
| Occupancy | 79.0% | 64.8% | 75.6% | 79.0% | P72 |
| Rev/Bed | $2.2M | $1.2M | $1.6M | $2.0M | P84 |
| Exp/Bed | $2.7M | $1.3M | $1.7M | $2.1M | P91 |
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.