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: $35.8M (vs $46.5M 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 | $17.0M | $487K | $17.5M | $0 | 12mo |
| A/R Days Reduction | 52.00 DEFAULT | 38.00 BENCHMARK | $2.7M | $8.1M | $10.8M | $33.9M | 9mo |
| Clean Claim Rate | 88.0% DEFAULT | 96.0% BENCHMARK | $0 | $566K | $566K | $0 | 6mo |
| Net Collection Rate | 93.5% DEFAULT | 42.6% 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 | $8.8M | $13.3M | $17.7M | $17.7M | $17.7M | $17.7M |
| Denial Rate Reduction | $0 | $4.4M | $8.8M | $13.1M | $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 | $283K | $566K | $566K | $566K | $566K | $566K | $566K |
| Cumulative | $0 | $12.7M | $25.3M | $37.7M | $46.5M | $46.5M | $46.5M | $46.5M |
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 $46.5M is added at exit.
| Entry \ Exit | 9.0x | 10.0x | 11.0x | 11.5x | 12.0x |
|---|---|---|---|---|---|
| 8.0x | 57% / 9.6x | 62% / 11.1x | 66% / 12.5x | 68% / 13.2x | 69% / 13.9x |
| 9.0x | 52% / 8.2x | 57% / 9.5x | 61% / 10.8x | 63% / 11.4x | 64% / 12.0x |
| 10.0x | 48% / 7.1x | 52% / 8.2x | 56% / 9.3x | 58% / 9.9x | 60% / 10.5x |
| 11.0x | 44% / 6.1x | 48% / 7.2x | 52% / 8.2x | 54% / 8.7x | 56% / 9.2x |
| 12.0x | 40% / 5.3x | 44% / 6.3x | 49% / 7.2x | 51% / 7.7x | 52% / 8.2x |
Covenant Headroom (at 10x Entry, 6.5x Max Leverage)
Pro forma EBITDA can decline 19% before the 6.5x covenant trips. RCM uplift reduces leverage from 8.5x to 5.3x, adding 3.2 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 | $77.3M | — | $77.3M | 8.7% |
| Year 1 | $79.6M | +$31.0M | $110.6M | 12.5% |
| Year 2 | $82.0M | +$46.5M | $128.6M | 14.5% |
| Year 3 | $84.5M | +$46.5M | $131.0M | 14.8% |
| Year 4 | $87.0M | +$46.5M | $133.5M | 15.1% |
| Year 5 | $89.6M | +$46.5M | $136.2M | 15.4% |
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 | $8.8M | $13.3M | $17.7M | $21.2M |
| Denial Rate Reductio | $8.8M | $13.1M | $17.5M | $21.0M |
| A/R Days Reduction | $5.4M | $8.1M | $10.8M | $12.9M |
| Clean Claim Rate | $283K | $425K | $566K | $679K |
| Total | $23.3M | $34.9M | $46.5M | $55.9M |
Peer Context — Where This Hospital Sits
Key metrics vs 92 size-matched peers. Low percentile on margin/efficiency metrics = more room for improvement = larger bridge opportunity.
| Metric | Hospital | P25 | P50 | P75 | Percentile |
|---|---|---|---|---|---|
| Op Margin | 8.7% | -27.8% | -17.6% | -9.0% | P99 |
| Net-to-Gross | 26.6% | 25.7% | 32.7% | 42.6% | P30 |
| Occupancy | 92.2% | 61.5% | 75.7% | 83.5% | P85 |
| Rev/Bed | $3.0M | $1.0M | $1.5M | $2.2M | P93 |
| Exp/Bed | $2.8M | $995K | $1.7M | $2.5M | P82 |
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.