Bridge Realization Estimate
ML model predicts what fraction of the bridge is achievable (accuracy: 60%, n=5,839)
Expected realization: 77% of modeled bridge. Strengths: Occupancy Rate, Revenue per Bed. Risks: Bed Count. Risk-adjusted uplift: $30.1M (vs $39.3M 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 | $14.9M | $14.9M | $0 | 12mo |
| Denial Rate Reduction | 12.0% DEFAULT | 6.5% BENCHMARK | $14.4M | $411K | $14.8M | $0 | 12mo |
| A/R Days Reduction | 52.00 DEFAULT | 38.00 BENCHMARK | $2.3M | $6.8M | $9.1M | $28.6M | 9mo |
| Clean Claim Rate | 88.0% DEFAULT | 96.0% BENCHMARK | $0 | $478K | $478K | $0 | 6mo |
| Net Collection Rate | 93.5% DEFAULT | 25.0% 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 | $7.5M | $11.2M | $14.9M | $14.9M | $14.9M | $14.9M |
| Denial Rate Reduction | $0 | $3.7M | $7.4M | $11.1M | $14.8M | $14.8M | $14.8M | $14.8M |
| A/R Days Reduction | $0 | $3.0M | $6.1M | $9.1M | $9.1M | $9.1M | $9.1M | $9.1M |
| Clean Claim Rate | $0 | $239K | $478K | $478K | $478K | $478K | $478K | $478K |
| Cumulative | $0 | $10.7M | $21.4M | $31.9M | $39.3M | $39.3M | $39.3M | $39.3M |
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 $39.3M is added at exit.
| Entry \ Exit | 9.0x | 10.0x | 11.0x | 11.5x | 12.0x |
|---|---|---|---|---|---|
| 8.0x | 121% / 52.8x | 126% / 59.0x | 131% / 65.2x | 133% / 68.3x | 135% / 71.5x |
| 9.0x | 116% / 46.5x | 120% / 52.1x | 125% / 57.6x | 127% / 60.4x | 129% / 63.1x |
| 10.0x | 111% / 41.6x | 116% / 46.5x | 120% / 51.5x | 122% / 54.0x | 124% / 56.5x |
| 11.0x | 106% / 37.5x | 111% / 42.0x | 116% / 46.5x | 118% / 48.8x | 120% / 51.1x |
| 12.0x | 103% / 34.1x | 107% / 38.2x | 112% / 42.4x | 114% / 44.5x | 116% / 46.5x |
Covenant Headroom (at 10x Entry, 6.5x Max Leverage)
Pro forma EBITDA can decline 83% before the 6.5x covenant trips. RCM uplift reduces leverage from 8.5x to 1.1x, adding 7.3 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 | $6.0M | — | $6.0M | 0.8% |
| Year 1 | $6.2M | +$26.2M | $32.4M | 4.3% |
| Year 2 | $6.4M | +$39.3M | $45.7M | 6.1% |
| Year 3 | $6.6M | +$39.3M | $45.9M | 6.1% |
| Year 4 | $6.8M | +$39.3M | $46.1M | 6.2% |
| Year 5 | $7.0M | +$39.3M | $46.3M | 6.2% |
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 | $7.5M | $11.2M | $14.9M | $17.9M |
| Denial Rate Reductio | $7.4M | $11.1M | $14.8M | $17.7M |
| A/R Days Reduction | $4.5M | $6.8M | $9.1M | $10.9M |
| Clean Claim Rate | $239K | $358K | $478K | $574K |
| Total | $19.6M | $29.5M | $39.3M | $47.1M |
Peer Context — Where This Hospital Sits
Key metrics vs 52 size-matched peers. Low percentile on margin/efficiency metrics = more room for improvement = larger bridge opportunity.
| Metric | Hospital | P25 | P50 | P75 | Percentile |
|---|---|---|---|---|---|
| Op Margin | 0.8% | -19.0% | -6.2% | 2.0% | P67 |
| Net-to-Gross | 9.7% | 14.7% | 20.8% | 25.0% | P8 |
| Occupancy | 83.1% | 52.3% | 59.5% | 75.7% | P90 |
| Rev/Bed | $3.6M | $833K | $1.3M | $1.6M | P98 |
| Exp/Bed | $3.5M | $1.0M | $1.4M | $1.6M | P98 |
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.