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. Risks: Bed Count. Risk-adjusted uplift: $29.0M (vs $39.9M 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 | $15.2M | $15.2M | $0 | 12mo |
| Denial Rate Reduction | 12.0% DEFAULT | 6.5% BENCHMARK | $14.6M | $417K | $15.0M | $0 | 12mo |
| A/R Days Reduction | 52.00 DEFAULT | 38.00 BENCHMARK | $2.3M | $6.9M | $9.2M | $29.1M | 9mo |
| Clean Claim Rate | 88.0% DEFAULT | 96.0% BENCHMARK | $0 | $486K | $486K | $0 | 6mo |
| Net Collection Rate | 93.5% DEFAULT | 33.3% 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 | $3.8M | $7.6M | $11.4M | $15.2M | $15.2M | $15.2M | $15.2M |
| Denial Rate Reduction | $0 | $3.8M | $7.5M | $11.3M | $15.0M | $15.0M | $15.0M | $15.0M |
| A/R Days Reduction | $0 | $3.1M | $6.2M | $9.2M | $9.2M | $9.2M | $9.2M | $9.2M |
| Clean Claim Rate | $0 | $243K | $486K | $486K | $486K | $486K | $486K | $486K |
| Cumulative | $0 | $10.9M | $21.7M | $32.4M | $39.9M | $39.9M | $39.9M | $39.9M |
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 $39.9M is added at exit.
| Entry \ Exit | 9.0x | 10.0x | 11.0x | 11.5x | 12.0x |
|---|---|---|---|---|---|
| 8.0x | 52% / 8.0x | 56% / 9.2x | 60% / 10.5x | 62% / 11.1x | 64% / 11.7x |
| 9.0x | 46% / 6.8x | 51% / 7.9x | 55% / 9.0x | 57% / 9.5x | 59% / 10.1x |
| 10.0x | 42% / 5.8x | 46% / 6.8x | 51% / 7.8x | 52% / 8.2x | 54% / 8.8x |
| 11.0x | 38% / 4.9x | 42% / 5.8x | 46% / 6.8x | 48% / 7.2x | 50% / 7.7x |
| 12.0x | 34% / 4.2x | 38% / 5.1x | 43% / 5.9x | 45% / 6.3x | 46% / 6.8x |
Covenant Headroom (at 10x Entry, 6.5x Max Leverage)
Pro forma EBITDA can decline 6% before the 6.5x covenant trips. RCM uplift reduces leverage from 8.5x to 6.1x, adding 2.3 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 | $105.5M | — | $105.5M | 13.9% |
| Year 1 | $108.7M | +$26.6M | $135.3M | 17.8% |
| Year 2 | $111.9M | +$39.9M | $151.9M | 20.0% |
| Year 3 | $115.3M | +$39.9M | $155.2M | 20.5% |
| Year 4 | $118.8M | +$39.9M | $158.7M | 20.9% |
| Year 5 | $122.3M | +$39.9M | $162.3M | 21.4% |
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 | $7.6M | $11.4M | $15.2M | $18.2M |
| Denial Rate Reductio | $7.5M | $11.3M | $15.0M | $18.0M |
| A/R Days Reduction | $4.6M | $6.9M | $9.2M | $11.1M |
| Clean Claim Rate | $243K | $364K | $486K | $583K |
| Total | $20.0M | $29.9M | $39.9M | $47.9M |
Peer Context — Where This Hospital Sits
Key metrics vs 24 size-matched peers. Low percentile on margin/efficiency metrics = more room for improvement = larger bridge opportunity.
| Metric | Hospital | P25 | P50 | P75 | Percentile |
|---|---|---|---|---|---|
| Op Margin | 13.9% | -5.0% | 0.3% | 8.8% | P87 |
| Net-to-Gross | 23.9% | 25.2% | 28.6% | 33.3% | P13 |
| Occupancy | 88.4% | 58.7% | 75.7% | 82.4% | P83 |
| Rev/Bed | $1.7M | $1.2M | $1.5M | $1.8M | P61 |
| Exp/Bed | $1.5M | $1.1M | $1.4M | $1.8M | P50 |
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.