Bridge Realization Estimate
ML model predicts what fraction of the bridge is achievable (accuracy: 60%, n=5,839)
Expected realization: 71% of modeled bridge. Strengths: Occupancy Rate. Risks: Bed Count, Commercial Payer %. Risk-adjusted uplift: $24.0M (vs $33.8M 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 | $12.8M | $12.8M | $0 | 12mo |
| Denial Rate Reduction | 12.0% DEFAULT | 6.5% BENCHMARK | $12.4M | $353K | $12.7M | $0 | 12mo |
| A/R Days Reduction | 52.00 DEFAULT | 38.00 BENCHMARK | $2.0M | $5.8M | $7.8M | $24.6M | 9mo |
| Clean Claim Rate | 88.0% DEFAULT | 96.0% BENCHMARK | $0 | $411K | $411K | $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 | $3.2M | $6.4M | $9.6M | $12.8M | $12.8M | $12.8M | $12.8M |
| Denial Rate Reduction | $0 | $3.2M | $6.4M | $9.5M | $12.7M | $12.7M | $12.7M | $12.7M |
| A/R Days Reduction | $0 | $2.6M | $5.2M | $7.8M | $7.8M | $7.8M | $7.8M | $7.8M |
| Clean Claim Rate | $0 | $205K | $411K | $411K | $411K | $411K | $411K | $411K |
| Cumulative | $0 | $9.2M | $18.4M | $27.4M | $33.8M | $33.8M | $33.8M | $33.8M |
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 $33.8M is added at exit.
| Entry \ Exit | 9.0x | 10.0x | 11.0x | 11.5x | 12.0x |
|---|---|---|---|---|---|
| 8.0x | 61% / 10.8x | 65% / 12.3x | 69% / 13.9x | 71% / 14.6x | 73% / 15.4x |
| 9.0x | 56% / 9.2x | 60% / 10.6x | 64% / 12.0x | 66% / 12.7x | 68% / 13.3x |
| 10.0x | 51% / 8.0x | 56% / 9.2x | 60% / 10.4x | 62% / 11.1x | 63% / 11.7x |
| 11.0x | 47% / 6.9x | 52% / 8.1x | 56% / 9.2x | 58% / 9.8x | 60% / 10.3x |
| 12.0x | 43% / 6.1x | 48% / 7.1x | 52% / 8.2x | 54% / 8.7x | 56% / 9.2x |
Covenant Headroom (at 10x Entry, 6.5x Max Leverage)
Pro forma EBITDA can decline 26% before the 6.5x covenant trips. RCM uplift reduces leverage from 8.5x to 4.8x, adding 3.6 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 | $44.8M | — | $44.8M | 7.0% |
| Year 1 | $46.1M | +$22.5M | $68.6M | 10.7% |
| Year 2 | $47.5M | +$33.8M | $81.2M | 12.7% |
| Year 3 | $48.9M | +$33.8M | $82.7M | 12.9% |
| Year 4 | $50.4M | +$33.8M | $84.1M | 13.1% |
| Year 5 | $51.9M | +$33.8M | $85.6M | 13.3% |
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 | $6.4M | $9.6M | $12.8M | $15.4M |
| Denial Rate Reductio | $6.4M | $9.5M | $12.7M | $15.2M |
| A/R Days Reduction | $3.9M | $5.9M | $7.8M | $9.4M |
| Clean Claim Rate | $205K | $308K | $411K | $493K |
| Total | $16.9M | $25.3M | $33.8M | $40.5M |
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 | 7.0% | -5.0% | 0.3% | 8.8% | P61 |
| Net-to-Gross | 23.7% | 25.2% | 28.6% | 33.3% | P9 |
| Occupancy | 81.4% | 58.7% | 75.7% | 82.4% | P71 |
| Rev/Bed | $1.5M | $1.2M | $1.5M | $1.8M | P48 |
| Exp/Bed | $1.4M | $1.1M | $1.4M | $1.8M | P46 |
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.