Bridge Realization Estimate
ML model predicts what fraction of the bridge is achievable (accuracy: 60%, n=5,839)
Expected realization: 66% of modeled bridge. Strengths: Occupancy Rate, Revenue per Bed. Risks: Bed Count. Risk-adjusted uplift: $220.9M (vs $335.6M 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 | $127.6M | $127.6M | $0 | 12mo |
| Denial Rate Reduction | 12.0% DEFAULT | 6.5% BENCHMARK | $122.8M | $3.5M | $126.3M | $0 | 12mo |
| A/R Days Reduction | 52.00 DEFAULT | 38.00 BENCHMARK | $19.6M | $58.0M | $77.6M | $244.7M | 9mo |
| Clean Claim Rate | 88.0% DEFAULT | 96.0% BENCHMARK | $0 | $4.1M | $4.1M | $0 | 6mo |
| Net Collection Rate | 93.5% DEFAULT | 30.9% 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 | $31.9M | $63.8M | $95.7M | $127.6M | $127.6M | $127.6M | $127.6M |
| Denial Rate Reduction | $0 | $31.6M | $63.2M | $94.7M | $126.3M | $126.3M | $126.3M | $126.3M |
| A/R Days Reduction | $0 | $25.9M | $51.7M | $77.6M | $77.6M | $77.6M | $77.6M | $77.6M |
| Clean Claim Rate | $0 | $2.0M | $4.1M | $4.1M | $4.1M | $4.1M | $4.1M | $4.1M |
| Cumulative | $0 | $91.4M | $182.8M | $272.1M | $335.6M | $335.6M | $335.6M | $335.6M |
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 $335.6M is added at exit.
| Entry \ Exit | 9.0x | 10.0x | 11.0x | 11.5x | 12.0x |
|---|---|---|---|---|---|
| 8.0x | Loss | Loss | Loss | Loss | Loss |
| 9.0x | Loss | Loss | Loss | Loss | Loss |
| 10.0x | Loss | Loss | Loss | Loss | Loss |
| 11.0x | Loss | Loss | Loss | Loss | Loss |
| 12.0x | Loss | Loss | Loss | Loss | Loss |
Covenant Headroom (at 10x Entry, 6.5x Max Leverage)
Pro forma EBITDA can decline 0% before the 6.5x covenant trips. RCM uplift reduces leverage from 99.0x to 99.0x, adding 0.0 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 | $-1.13B | — | $-1.13B | -17.7% |
| Year 1 | $-1.16B | +$223.7M | $-938.8M | -14.7% |
| Year 2 | $-1.20B | +$335.6M | $-861.8M | -13.5% |
| Year 3 | $-1.23B | +$335.6M | $-897.7M | -14.1% |
| Year 4 | $-1.27B | +$335.6M | $-934.7M | -14.7% |
| Year 5 | $-1.31B | +$335.6M | $-972.8M | -15.3% |
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 | $63.8M | $95.7M | $127.6M | $153.1M |
| Denial Rate Reductio | $63.2M | $94.7M | $126.3M | $151.6M |
| A/R Days Reduction | $38.8M | $58.2M | $77.6M | $93.1M |
| Clean Claim Rate | $2.0M | $3.1M | $4.1M | $4.9M |
| Total | $167.8M | $251.7M | $335.6M | $402.7M |
Peer Context — Where This Hospital Sits
Key metrics vs 131 size-matched peers. Low percentile on margin/efficiency metrics = more room for improvement = larger bridge opportunity.
| Metric | Hospital | P25 | P50 | P75 | Percentile |
|---|---|---|---|---|---|
| Op Margin | -17.7% | -15.8% | -5.4% | 3.9% | P22 |
| Net-to-Gross | 30.7% | 21.1% | 27.0% | 30.9% | P72 |
| Occupancy | 75.9% | 71.2% | 78.9% | 87.5% | P40 |
| Rev/Bed | $4.8M | $1.6M | $2.1M | $2.9M | P95 |
| Exp/Bed | $5.7M | $1.6M | $2.2M | $3.2M | P97 |
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.