Bridge Realization Estimate
ML model predicts what fraction of the bridge is achievable (accuracy: 60%, n=5,839)
Expected realization: 68% of modeled bridge. Strengths: Occupancy Rate, Payer Diversity. Risks: Bed Count, Commercial Payer %. Risk-adjusted uplift: $31.5M (vs $46.6M 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 | $17.7M | $17.7M | $0 | 12mo |
| Denial Rate Reduction | 12.0% DEFAULT | 6.5% BENCHMARK | $17.1M | $487K | $17.5M | $0 | 12mo |
| A/R Days Reduction | 52.00 DEFAULT | 38.00 BENCHMARK | $2.7M | $8.1M | $10.8M | $34.0M | 9mo |
| Clean Claim Rate | 88.0% DEFAULT | 96.0% BENCHMARK | $0 | $567K | $567K | $0 | 6mo |
| Net Collection Rate | 93.5% DEFAULT | 29.5% 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 | $4.4M | $8.9M | $13.3M | $17.7M | $17.7M | $17.7M | $17.7M |
| Denial Rate Reduction | $0 | $4.4M | $8.8M | $13.2M | $17.5M | $17.5M | $17.5M | $17.5M |
| A/R Days Reduction | $0 | $3.6M | $7.2M | $10.8M | $10.8M | $10.8M | $10.8M | $10.8M |
| Clean Claim Rate | $0 | $284K | $567K | $567K | $567K | $567K | $567K | $567K |
| Cumulative | $0 | $12.7M | $25.4M | $37.8M | $46.6M | $46.6M | $46.6M | $46.6M |
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 $46.6M is added at exit.
| Entry \ Exit | 9.0x | 10.0x | 11.0x | 11.5x | 12.0x |
|---|---|---|---|---|---|
| 8.0x | 62% / 11.2x | 67% / 12.9x | 71% / 14.5x | 72% / 15.3x | 74% / 16.1x |
| 9.0x | 57% / 9.6x | 62% / 11.1x | 66% / 12.5x | 68% / 13.2x | 69% / 13.9x |
| 10.0x | 53% / 8.3x | 57% / 9.6x | 61% / 10.9x | 63% / 11.6x | 65% / 12.2x |
| 11.0x | 49% / 7.3x | 53% / 8.5x | 57% / 9.6x | 59% / 10.2x | 61% / 10.8x |
| 12.0x | 45% / 6.4x | 50% / 7.5x | 54% / 8.6x | 56% / 9.1x | 57% / 9.6x |
Covenant Headroom (at 10x Entry, 6.5x Max Leverage)
Pro forma EBITDA can decline 29% before the 6.5x covenant trips. RCM uplift reduces leverage from 8.5x to 4.6x, adding 3.8 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 | $56.6M | — | $56.6M | 6.4% |
| Year 1 | $58.3M | +$31.1M | $89.4M | 10.1% |
| Year 2 | $60.1M | +$46.6M | $106.7M | 12.0% |
| Year 3 | $61.9M | +$46.6M | $108.5M | 12.2% |
| Year 4 | $63.7M | +$46.6M | $110.4M | 12.5% |
| Year 5 | $65.7M | +$46.6M | $112.3M | 12.7% |
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 | $8.9M | $13.3M | $17.7M | $21.3M |
| Denial Rate Reductio | $8.8M | $13.2M | $17.5M | $21.1M |
| A/R Days Reduction | $5.4M | $8.1M | $10.8M | $12.9M |
| Clean Claim Rate | $284K | $425K | $567K | $681K |
| Total | $23.3M | $35.0M | $46.6M | $55.9M |
Peer Context — Where This Hospital Sits
Key metrics vs 29 size-matched peers. Low percentile on margin/efficiency metrics = more room for improvement = larger bridge opportunity.
| Metric | Hospital | P25 | P50 | P75 | Percentile |
|---|---|---|---|---|---|
| Op Margin | 6.4% | -12.4% | -2.0% | 5.3% | P79 |
| Net-to-Gross | 47.0% | 23.5% | 27.1% | 29.5% | P83 |
| Occupancy | 65.9% | 55.9% | 66.2% | 75.7% | P45 |
| Rev/Bed | $2.0M | $1.1M | $1.6M | $1.9M | P83 |
| Exp/Bed | $1.9M | $1.2M | $1.5M | $1.9M | P69 |
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.