Bridge Realization Estimate
ML model predicts what fraction of the bridge is achievable (accuracy: 60%, n=5,839)
Expected realization: 72% of modeled bridge. Strengths: Occupancy Rate, Revenue per Bed. Risks: Bed Count. Risk-adjusted uplift: $36.8M (vs $50.9M 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 | $19.3M | $19.3M | $0 | 12mo |
| Denial Rate Reduction | 12.0% DEFAULT | 6.5% BENCHMARK | $18.6M | $532K | $19.2M | $0 | 12mo |
| A/R Days Reduction | 52.00 DEFAULT | 38.00 BENCHMARK | $3.0M | $8.8M | $11.8M | $37.1M | 9mo |
| Clean Claim Rate | 88.0% DEFAULT | 96.0% BENCHMARK | $0 | $619K | $619K | $0 | 6mo |
| Net Collection Rate | 93.5% DEFAULT | 25.3% 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 | $4.8M | $9.7M | $14.5M | $19.3M | $19.3M | $19.3M | $19.3M |
| Denial Rate Reduction | $0 | $4.8M | $9.6M | $14.4M | $19.2M | $19.2M | $19.2M | $19.2M |
| A/R Days Reduction | $0 | $3.9M | $7.8M | $11.8M | $11.8M | $11.8M | $11.8M | $11.8M |
| Clean Claim Rate | $0 | $310K | $619K | $619K | $619K | $619K | $619K | $619K |
| Cumulative | $0 | $13.9M | $27.7M | $41.3M | $50.9M | $50.9M | $50.9M | $50.9M |
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 $50.9M is added at exit.
| Entry \ Exit | 9.0x | 10.0x | 11.0x | 11.5x | 12.0x |
|---|---|---|---|---|---|
| 8.0x | 253% / 550.2x | 261% / 611.7x | 268% / 673.1x | 271% / 703.9x | 274% / 734.6x |
| 9.0x | 245% / 488.7x | 252% / 543.3x | 259% / 598.0x | 262% / 625.3x | 266% / 652.7x |
| 10.0x | 238% / 439.5x | 245% / 488.7x | 252% / 537.9x | 255% / 562.5x | 258% / 587.1x |
| 11.0x | 231% / 399.2x | 238% / 444.0x | 245% / 488.7x | 248% / 511.0x | 251% / 533.4x |
| 12.0x | 226% / 365.7x | 233% / 406.7x | 239% / 447.7x | 242% / 468.2x | 245% / 488.7x |
Covenant Headroom (at 10x Entry, 6.5x Max Leverage)
Pro forma EBITDA can decline 98% before the 6.5x covenant trips. RCM uplift reduces leverage from 8.5x to 0.1x, adding 8.3 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 | $683K | — | $683K | 0.1% |
| Year 1 | $703K | +$33.9M | $34.6M | 3.6% |
| Year 2 | $724K | +$50.9M | $51.6M | 5.3% |
| Year 3 | $746K | +$50.9M | $51.6M | 5.3% |
| Year 4 | $769K | +$50.9M | $51.7M | 5.3% |
| Year 5 | $792K | +$50.9M | $51.7M | 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 | $9.7M | $14.5M | $19.3M | $23.2M |
| Denial Rate Reductio | $9.6M | $14.4M | $19.2M | $23.0M |
| A/R Days Reduction | $5.9M | $8.8M | $11.8M | $14.1M |
| Clean Claim Rate | $310K | $464K | $619K | $743K |
| Total | $25.4M | $38.2M | $50.9M | $61.1M |
Peer Context — Where This Hospital Sits
Key metrics vs 51 size-matched peers. Low percentile on margin/efficiency metrics = more room for improvement = larger bridge opportunity.
| Metric | Hospital | P25 | P50 | P75 | Percentile |
|---|---|---|---|---|---|
| Op Margin | 0.1% | -14.3% | -4.3% | 2.2% | P63 |
| Net-to-Gross | 16.1% | 18.0% | 21.4% | 25.3% | P16 |
| Occupancy | 67.5% | 55.7% | 62.4% | 75.9% | P57 |
| Rev/Bed | $3.3M | $1.0M | $1.4M | $1.8M | P96 |
| Exp/Bed | $3.3M | $1.0M | $1.5M | $1.8M | P96 |
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.