Bridge Realization Estimate
ML model predicts what fraction of the bridge is achievable (accuracy: 60%, n=5,839)
Expected realization: 73% of modeled bridge. Strengths: Occupancy Rate, Revenue per Bed. Risks: Bed Count, Commercial Payer %. Risk-adjusted uplift: $27.1M (vs $36.9M 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 | $14.0M | $14.0M | $0 | 12mo |
| Denial Rate Reduction | 12.0% DEFAULT | 6.5% BENCHMARK | $13.5M | $386K | $13.9M | $0 | 12mo |
| A/R Days Reduction | 52.00 DEFAULT | 38.00 BENCHMARK | $2.2M | $6.4M | $8.5M | $26.9M | 9mo |
| Clean Claim Rate | 88.0% DEFAULT | 96.0% BENCHMARK | $0 | $449K | $449K | $0 | 6mo |
| Net Collection Rate | 93.5% DEFAULT | 25.5% 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 | $3.5M | $7.0M | $10.5M | $14.0M | $14.0M | $14.0M | $14.0M |
| Denial Rate Reduction | $0 | $3.5M | $7.0M | $10.4M | $13.9M | $13.9M | $13.9M | $13.9M |
| A/R Days Reduction | $0 | $2.8M | $5.7M | $8.5M | $8.5M | $8.5M | $8.5M | $8.5M |
| Clean Claim Rate | $0 | $225K | $449K | $449K | $449K | $449K | $449K | $449K |
| Cumulative | $0 | $10.1M | $20.1M | $29.9M | $36.9M | $36.9M | $36.9M | $36.9M |
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 $36.9M 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 | $-192.9M | — | $-192.9M | -27.5% |
| Year 1 | $-198.7M | +$24.6M | $-174.1M | -24.8% |
| Year 2 | $-204.7M | +$36.9M | $-167.7M | -23.9% |
| Year 3 | $-210.8M | +$36.9M | $-173.9M | -24.8% |
| Year 4 | $-217.1M | +$36.9M | $-180.2M | -25.7% |
| Year 5 | $-223.6M | +$36.9M | $-186.7M | -26.6% |
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 | $7.0M | $10.5M | $14.0M | $16.8M |
| Denial Rate Reductio | $7.0M | $10.4M | $13.9M | $16.7M |
| A/R Days Reduction | $4.3M | $6.4M | $8.5M | $10.3M |
| Clean Claim Rate | $225K | $337K | $449K | $539K |
| Total | $18.5M | $27.7M | $36.9M | $44.3M |
Peer Context — Where This Hospital Sits
Key metrics vs 46 size-matched peers. Low percentile on margin/efficiency metrics = more room for improvement = larger bridge opportunity.
| Metric | Hospital | P25 | P50 | P75 | Percentile |
|---|---|---|---|---|---|
| Op Margin | -27.5% | -11.7% | -3.5% | 2.6% | P7 |
| Net-to-Gross | 21.7% | 19.3% | 21.7% | 25.5% | P50 |
| Occupancy | 86.6% | 59.2% | 66.4% | 77.0% | P89 |
| Rev/Bed | $2.0M | $1.2M | $1.5M | $1.9M | P78 |
| Exp/Bed | $2.5M | $1.2M | $1.5M | $2.0M | 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.