Bridge Realization Estimate
ML model predicts what fraction of the bridge is achievable (accuracy: 60%, n=5,839)
Expected realization: 69% of modeled bridge. Strengths: Occupancy Rate, Revenue per Bed. Risks: Bed Count. Risk-adjusted uplift: $61.7M (vs $89.4M 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 | $34.0M | $34.0M | $0 | 12mo |
| Denial Rate Reduction | 12.0% DEFAULT | 6.5% BENCHMARK | $32.7M | $934K | $33.6M | $0 | 12mo |
| A/R Days Reduction | 52.00 DEFAULT | 38.00 BENCHMARK | $5.2M | $15.5M | $20.7M | $65.2M | 9mo |
| Clean Claim Rate | 88.0% DEFAULT | 96.0% BENCHMARK | $0 | $1.1M | $1.1M | $0 | 6mo |
| Net Collection Rate | 93.5% DEFAULT | 31.9% 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 | $8.5M | $17.0M | $25.5M | $34.0M | $34.0M | $34.0M | $34.0M |
| Denial Rate Reduction | $0 | $8.4M | $16.8M | $25.2M | $33.6M | $33.6M | $33.6M | $33.6M |
| A/R Days Reduction | $0 | $6.9M | $13.8M | $20.7M | $20.7M | $20.7M | $20.7M | $20.7M |
| Clean Claim Rate | $0 | $544K | $1.1M | $1.1M | $1.1M | $1.1M | $1.1M | $1.1M |
| Cumulative | $0 | $24.3M | $48.7M | $72.5M | $89.4M | $89.4M | $89.4M | $89.4M |
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 $89.4M is added at exit.
| Entry \ Exit | 9.0x | 10.0x | 11.0x | 11.5x | 12.0x |
|---|---|---|---|---|---|
| 8.0x | 75% / 16.4x | 79% / 18.6x | 83% / 20.8x | 85% / 21.9x | 87% / 22.9x |
| 9.0x | 70% / 14.2x | 74% / 16.2x | 78% / 18.1x | 80% / 19.1x | 82% / 20.0x |
| 10.0x | 66% / 12.5x | 70% / 14.2x | 74% / 16.0x | 76% / 16.8x | 78% / 17.7x |
| 11.0x | 62% / 11.0x | 66% / 12.6x | 70% / 14.2x | 72% / 15.0x | 74% / 15.8x |
| 12.0x | 58% / 9.8x | 62% / 11.3x | 66% / 12.8x | 68% / 13.5x | 70% / 14.2x |
Covenant Headroom (at 10x Entry, 6.5x Max Leverage)
Pro forma EBITDA can decline 48% before the 6.5x covenant trips. RCM uplift reduces leverage from 8.5x to 3.3x, adding 5.1 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 | $58.5M | — | $58.5M | 3.4% |
| Year 1 | $60.3M | +$59.6M | $119.8M | 7.1% |
| Year 2 | $62.1M | +$89.4M | $151.4M | 8.9% |
| Year 3 | $63.9M | +$89.4M | $153.3M | 9.0% |
| Year 4 | $65.9M | +$89.4M | $155.2M | 9.1% |
| Year 5 | $67.8M | +$89.4M | $157.2M | 9.3% |
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 | $17.0M | $25.5M | $34.0M | $40.8M |
| Denial Rate Reductio | $16.8M | $25.2M | $33.6M | $40.4M |
| A/R Days Reduction | $10.3M | $15.5M | $20.7M | $24.8M |
| Clean Claim Rate | $544K | $815K | $1.1M | $1.3M |
| Total | $44.7M | $67.0M | $89.4M | $107.3M |
Peer Context — Where This Hospital Sits
Key metrics vs 21 size-matched peers. Low percentile on margin/efficiency metrics = more room for improvement = larger bridge opportunity.
| Metric | Hospital | P25 | P50 | P75 | Percentile |
|---|---|---|---|---|---|
| Op Margin | 3.4% | -11.5% | -0.3% | 8.1% | P67 |
| Net-to-Gross | 29.4% | 24.9% | 27.7% | 31.9% | P57 |
| Occupancy | 81.7% | 65.3% | 68.7% | 76.5% | P90 |
| Rev/Bed | $2.3M | $1.8M | $2.0M | $2.4M | P67 |
| Exp/Bed | $2.2M | $1.8M | $2.1M | $2.7M | P57 |
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.