Bridge Realization Estimate
ML model predicts what fraction of the bridge is achievable (accuracy: 60%, n=5,839)
Expected realization: 70% of modeled bridge. Strengths: Occupancy Rate, Revenue per Bed. Risks: Bed Count. Risk-adjusted uplift: $60.0M (vs $85.9M 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 | $32.7M | $32.7M | $0 | 12mo |
| Denial Rate Reduction | 12.0% DEFAULT | 6.5% BENCHMARK | $31.4M | $898K | $32.3M | $0 | 12mo |
| A/R Days Reduction | 52.00 DEFAULT | 38.00 BENCHMARK | $5.0M | $14.9M | $19.9M | $62.6M | 9mo |
| Clean Claim Rate | 88.0% DEFAULT | 96.0% BENCHMARK | $0 | $1.0M | $1.0M | $0 | 6mo |
| Net Collection Rate | 93.5% DEFAULT | 41.8% 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 | $8.2M | $16.3M | $24.5M | $32.7M | $32.7M | $32.7M | $32.7M |
| Denial Rate Reduction | $0 | $8.1M | $16.2M | $24.2M | $32.3M | $32.3M | $32.3M | $32.3M |
| A/R Days Reduction | $0 | $6.6M | $13.2M | $19.9M | $19.9M | $19.9M | $19.9M | $19.9M |
| Clean Claim Rate | $0 | $522K | $1.0M | $1.0M | $1.0M | $1.0M | $1.0M | $1.0M |
| Cumulative | $0 | $23.4M | $46.8M | $69.7M | $85.9M | $85.9M | $85.9M | $85.9M |
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 $85.9M is added at exit.
| Entry \ Exit | 9.0x | 10.0x | 11.0x | 11.5x | 12.0x |
|---|---|---|---|---|---|
| 8.0x | 83% / 20.3x | 87% / 22.9x | 91% / 25.5x | 93% / 26.8x | 95% / 28.1x |
| 9.0x | 78% / 17.7x | 82% / 20.0x | 86% / 22.3x | 88% / 23.5x | 90% / 24.6x |
| 10.0x | 73% / 15.6x | 78% / 17.7x | 82% / 19.8x | 84% / 20.8x | 85% / 21.9x |
| 11.0x | 69% / 13.9x | 74% / 15.8x | 78% / 17.7x | 79% / 18.6x | 81% / 19.6x |
| 12.0x | 66% / 12.4x | 70% / 14.2x | 74% / 15.9x | 76% / 16.8x | 78% / 17.7x |
Covenant Headroom (at 10x Entry, 6.5x Max Leverage)
Pro forma EBITDA can decline 57% before the 6.5x covenant trips. RCM uplift reduces leverage from 8.5x to 2.8x, adding 5.7 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 | $41.7M | — | $41.7M | 2.6% |
| Year 1 | $42.9M | +$57.3M | $100.2M | 6.1% |
| Year 2 | $44.2M | +$85.9M | $130.1M | 8.0% |
| Year 3 | $45.6M | +$85.9M | $131.5M | 8.1% |
| Year 4 | $46.9M | +$85.9M | $132.8M | 8.1% |
| Year 5 | $48.3M | +$85.9M | $134.2M | 8.2% |
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 | $16.3M | $24.5M | $32.7M | $39.2M |
| Denial Rate Reductio | $16.2M | $24.2M | $32.3M | $38.8M |
| A/R Days Reduction | $9.9M | $14.9M | $19.9M | $23.8M |
| Clean Claim Rate | $522K | $784K | $1.0M | $1.3M |
| Total | $42.9M | $64.4M | $85.9M | $103.1M |
Peer Context — Where This Hospital Sits
Key metrics vs 36 size-matched peers. Low percentile on margin/efficiency metrics = more room for improvement = larger bridge opportunity.
| Metric | Hospital | P25 | P50 | P75 | Percentile |
|---|---|---|---|---|---|
| Op Margin | 2.6% | -27.7% | -18.4% | -8.9% | P91 |
| Net-to-Gross | 17.7% | 25.0% | 32.2% | 41.7% | P0 |
| Occupancy | 80.9% | 77.2% | 81.5% | 88.7% | P44 |
| Rev/Bed | $2.3M | $1.5M | $2.0M | $2.5M | P59 |
| Exp/Bed | $2.3M | $1.6M | $2.4M | $3.0M | P42 |
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.