Bridge Realization Estimate
ML model predicts what fraction of the bridge is achievable (accuracy: 60%, n=5,839)
Expected realization: 67% of modeled bridge. Strengths: Occupancy Rate. Risks: Bed Count. Risk-adjusted uplift: $47.1M (vs $70.4M 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 | $26.8M | $26.8M | $0 | 12mo |
| Denial Rate Reduction | 12.0% DEFAULT | 6.5% BENCHMARK | $25.7M | $736K | $26.5M | $0 | 12mo |
| A/R Days Reduction | 52.00 DEFAULT | 38.00 BENCHMARK | $4.1M | $12.2M | $16.3M | $51.3M | 9mo |
| Clean Claim Rate | 88.0% DEFAULT | 96.0% BENCHMARK | $0 | $856K | $856K | $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 | $6.7M | $13.4M | $20.1M | $26.8M | $26.8M | $26.8M | $26.8M |
| Denial Rate Reduction | $0 | $6.6M | $13.2M | $19.9M | $26.5M | $26.5M | $26.5M | $26.5M |
| A/R Days Reduction | $0 | $5.4M | $10.9M | $16.3M | $16.3M | $16.3M | $16.3M | $16.3M |
| Clean Claim Rate | $0 | $428K | $856K | $856K | $856K | $856K | $856K | $856K |
| Cumulative | $0 | $19.2M | $38.3M | $57.1M | $70.4M | $70.4M | $70.4M | $70.4M |
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 $70.4M is added at exit.
| Entry \ Exit | 9.0x | 10.0x | 11.0x | 11.5x | 12.0x |
|---|---|---|---|---|---|
| 8.0x | 120% / 51.5x | 125% / 57.5x | 129% / 63.6x | 132% / 66.7x | 134% / 69.7x |
| 9.0x | 114% / 45.4x | 119% / 50.8x | 124% / 56.2x | 126% / 58.9x | 128% / 61.6x |
| 10.0x | 110% / 40.5x | 114% / 45.4x | 119% / 50.2x | 121% / 52.7x | 123% / 55.1x |
| 11.0x | 105% / 36.5x | 110% / 41.0x | 114% / 45.4x | 117% / 47.6x | 118% / 49.8x |
| 12.0x | 102% / 33.2x | 106% / 37.3x | 110% / 41.3x | 113% / 43.4x | 114% / 45.4x |
Covenant Headroom (at 10x Entry, 6.5x Max Leverage)
Pro forma EBITDA can decline 82% before the 6.5x covenant trips. RCM uplift reduces leverage from 8.5x to 1.2x, adding 7.3 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 | $11.1M | — | $11.1M | 0.8% |
| Year 1 | $11.5M | +$46.9M | $58.4M | 4.4% |
| Year 2 | $11.8M | +$70.4M | $82.2M | 6.1% |
| Year 3 | $12.2M | +$70.4M | $82.5M | 6.2% |
| Year 4 | $12.5M | +$70.4M | $82.9M | 6.2% |
| Year 5 | $12.9M | +$70.4M | $83.3M | 6.2% |
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 | $13.4M | $20.1M | $26.8M | $32.1M |
| Denial Rate Reductio | $13.2M | $19.9M | $26.5M | $31.8M |
| A/R Days Reduction | $8.1M | $12.2M | $16.3M | $19.5M |
| Clean Claim Rate | $428K | $642K | $856K | $1.0M |
| Total | $35.2M | $52.8M | $70.4M | $84.4M |
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 | 0.8% | -11.5% | -0.3% | 8.1% | P57 |
| Net-to-Gross | 21.0% | 24.9% | 27.7% | 31.9% | P14 |
| Occupancy | 73.3% | 65.3% | 68.7% | 76.5% | P52 |
| Rev/Bed | $1.8M | $1.8M | $2.0M | $2.4M | P29 |
| Exp/Bed | $1.8M | $1.8M | $2.1M | $2.7M | P24 |
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.