Bridge Realization Estimate
ML model predicts what fraction of the bridge is achievable (accuracy: 60%, n=5,839)
Expected realization: 68% of modeled bridge. Strengths: Occupancy Rate, Commercial Payer %. Risks: Bed Count. Risk-adjusted uplift: $58.5M (vs $86.6M 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 | $32.9M | $32.9M | $0 | 12mo |
| Denial Rate Reduction | 12.0% DEFAULT | 6.5% BENCHMARK | $31.7M | $906K | $32.6M | $0 | 12mo |
| A/R Days Reduction | 52.00 DEFAULT | 38.00 BENCHMARK | $5.1M | $15.0M | $20.0M | $63.2M | 9mo |
| Clean Claim Rate | 88.0% DEFAULT | 96.0% BENCHMARK | $0 | $1.1M | $1.1M | $0 | 6mo |
| Net Collection Rate | 93.5% DEFAULT | 31.7% 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 | $8.2M | $16.5M | $24.7M | $32.9M | $32.9M | $32.9M | $32.9M |
| Denial Rate Reduction | $0 | $8.2M | $16.3M | $24.5M | $32.6M | $32.6M | $32.6M | $32.6M |
| A/R Days Reduction | $0 | $6.7M | $13.4M | $20.0M | $20.0M | $20.0M | $20.0M | $20.0M |
| Clean Claim Rate | $0 | $527K | $1.1M | $1.1M | $1.1M | $1.1M | $1.1M | $1.1M |
| Cumulative | $0 | $23.6M | $47.2M | $70.2M | $86.6M | $86.6M | $86.6M | $86.6M |
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 $86.6M is added at exit.
| Entry \ Exit | 9.0x | 10.0x | 11.0x | 11.5x | 12.0x |
|---|---|---|---|---|---|
| 8.0x | 68% / 13.5x | 73% / 15.4x | 77% / 17.2x | 79% / 18.2x | 80% / 19.1x |
| 9.0x | 63% / 11.7x | 68% / 13.3x | 72% / 15.0x | 74% / 15.8x | 75% / 16.6x |
| 10.0x | 59% / 10.2x | 63% / 11.7x | 67% / 13.1x | 69% / 13.9x | 71% / 14.6x |
| 11.0x | 55% / 8.9x | 59% / 10.3x | 63% / 11.7x | 65% / 12.3x | 67% / 13.0x |
| 12.0x | 51% / 7.9x | 56% / 9.2x | 60% / 10.4x | 62% / 11.0x | 63% / 11.7x |
Covenant Headroom (at 10x Entry, 6.5x Max Leverage)
Pro forma EBITDA can decline 39% before the 6.5x covenant trips. RCM uplift reduces leverage from 8.5x to 4.0x, adding 4.5 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 | $76.5M | — | $76.5M | 4.6% |
| Year 1 | $78.8M | +$57.8M | $136.5M | 8.3% |
| Year 2 | $81.1M | +$86.6M | $167.8M | 10.2% |
| Year 3 | $83.6M | +$86.6M | $170.2M | 10.3% |
| Year 4 | $86.1M | +$86.6M | $172.7M | 10.5% |
| Year 5 | $88.6M | +$86.6M | $175.3M | 10.6% |
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 | $16.5M | $24.7M | $32.9M | $39.5M |
| Denial Rate Reductio | $16.3M | $24.5M | $32.6M | $39.1M |
| A/R Days Reduction | $10.0M | $15.0M | $20.0M | $24.0M |
| Clean Claim Rate | $527K | $790K | $1.1M | $1.3M |
| Total | $43.3M | $65.0M | $86.6M | $104.0M |
Peer Context — Where This Hospital Sits
Key metrics vs 383 size-matched peers. Low percentile on margin/efficiency metrics = more room for improvement = larger bridge opportunity.
| Metric | Hospital | P25 | P50 | P75 | Percentile |
|---|---|---|---|---|---|
| Op Margin | 4.6% | -15.1% | -4.8% | 3.3% | P78 |
| Net-to-Gross | 16.5% | 20.4% | 26.7% | 31.7% | P13 |
| Occupancy | 73.2% | 67.6% | 75.7% | 83.6% | P40 |
| Rev/Bed | $2.0M | $1.4M | $1.8M | $2.4M | P59 |
| Exp/Bed | $1.9M | $1.4M | $1.9M | $2.7M | 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.