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: $27.9M (vs $39.0M 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 | $14.8M | $14.8M | $0 | 12mo |
| Denial Rate Reduction | 12.0% DEFAULT | 6.5% BENCHMARK | $14.3M | $408K | $14.7M | $0 | 12mo |
| A/R Days Reduction | 52.00 DEFAULT | 38.00 BENCHMARK | $2.3M | $6.7M | $9.0M | $28.4M | 9mo |
| Clean Claim Rate | 88.0% DEFAULT | 96.0% BENCHMARK | $0 | $475K | $475K | $0 | 6mo |
| Net Collection Rate | 93.5% DEFAULT | 37.7% 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 | $3.7M | $7.4M | $11.1M | $14.8M | $14.8M | $14.8M | $14.8M |
| Denial Rate Reduction | $0 | $3.7M | $7.3M | $11.0M | $14.7M | $14.7M | $14.7M | $14.7M |
| A/R Days Reduction | $0 | $3.0M | $6.0M | $9.0M | $9.0M | $9.0M | $9.0M | $9.0M |
| Clean Claim Rate | $0 | $237K | $475K | $475K | $475K | $475K | $475K | $475K |
| Cumulative | $0 | $10.6M | $21.3M | $31.6M | $39.0M | $39.0M | $39.0M | $39.0M |
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 $39.0M is added at exit.
| Entry \ Exit | 9.0x | 10.0x | 11.0x | 11.5x | 12.0x |
|---|---|---|---|---|---|
| 8.0x | 78% / 17.8x | 82% / 20.1x | 86% / 22.5x | 88% / 23.6x | 90% / 24.8x |
| 9.0x | 73% / 15.4x | 77% / 17.5x | 81% / 19.6x | 83% / 20.6x | 85% / 21.7x |
| 10.0x | 68% / 13.6x | 73% / 15.4x | 77% / 17.3x | 79% / 18.3x | 81% / 19.2x |
| 11.0x | 65% / 12.1x | 69% / 13.8x | 73% / 15.4x | 75% / 16.3x | 77% / 17.1x |
| 12.0x | 61% / 10.8x | 65% / 12.3x | 69% / 13.9x | 71% / 14.7x | 73% / 15.4x |
Covenant Headroom (at 10x Entry, 6.5x Max Leverage)
Pro forma EBITDA can decline 52% before the 6.5x covenant trips. RCM uplift reduces leverage from 8.5x to 3.1x, adding 5.3 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 | $22.7M | — | $22.7M | 3.1% |
| Year 1 | $23.4M | +$26.0M | $49.4M | 6.7% |
| Year 2 | $24.1M | +$39.0M | $63.1M | 8.5% |
| Year 3 | $24.8M | +$39.0M | $63.8M | 8.6% |
| Year 4 | $25.6M | +$39.0M | $64.6M | 8.7% |
| Year 5 | $26.3M | +$39.0M | $65.4M | 8.8% |
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 | $7.4M | $11.1M | $14.8M | $17.8M |
| Denial Rate Reductio | $7.3M | $11.0M | $14.7M | $17.6M |
| A/R Days Reduction | $4.5M | $6.8M | $9.0M | $10.8M |
| Clean Claim Rate | $237K | $356K | $475K | $570K |
| Total | $19.5M | $29.3M | $39.0M | $46.8M |
Peer Context — Where This Hospital Sits
Key metrics vs 14 size-matched peers. Low percentile on margin/efficiency metrics = more room for improvement = larger bridge opportunity.
| Metric | Hospital | P25 | P50 | P75 | Percentile |
|---|---|---|---|---|---|
| Op Margin | 3.1% | -10.9% | -7.6% | -3.3% | P93 |
| Net-to-Gross | 32.7% | 30.7% | 32.5% | 37.7% | P50 |
| Occupancy | 76.9% | 72.7% | 77.4% | 79.4% | P43 |
| Rev/Bed | $2.1M | $1.8M | $2.1M | $2.1M | P57 |
| Exp/Bed | $2.0M | $2.1M | $2.2M | $2.5M | P21 |
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.