Bridge Realization Estimate
ML model predicts what fraction of the bridge is achievable (accuracy: 60%, n=5,839)
Expected realization: 73% of modeled bridge. Strengths: Occupancy Rate, Revenue per Bed. Risks: Bed Count, Commercial Payer %. Risk-adjusted uplift: $60.9M (vs $83.3M 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 | $31.7M | $31.7M | $0 | 12mo |
| Denial Rate Reduction | 12.0% DEFAULT | 6.5% BENCHMARK | $30.5M | $870K | $31.3M | $0 | 12mo |
| A/R Days Reduction | 52.00 DEFAULT | 38.00 BENCHMARK | $4.9M | $14.4M | $19.3M | $60.7M | 9mo |
| Clean Claim Rate | 88.0% DEFAULT | 96.0% BENCHMARK | $0 | $1.0M | $1.0M | $0 | 6mo |
| Net Collection Rate | 93.5% DEFAULT | 28.4% 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 | $7.9M | $15.8M | $23.7M | $31.7M | $31.7M | $31.7M | $31.7M |
| Denial Rate Reduction | $0 | $7.8M | $15.7M | $23.5M | $31.3M | $31.3M | $31.3M | $31.3M |
| A/R Days Reduction | $0 | $6.4M | $12.8M | $19.3M | $19.3M | $19.3M | $19.3M | $19.3M |
| Clean Claim Rate | $0 | $506K | $1.0M | $1.0M | $1.0M | $1.0M | $1.0M | $1.0M |
| Cumulative | $0 | $22.7M | $45.3M | $67.5M | $83.3M | $83.3M | $83.3M | $83.3M |
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 $83.3M is added at exit.
| Entry \ Exit | 9.0x | 10.0x | 11.0x | 11.5x | 12.0x |
|---|---|---|---|---|---|
| 8.0x | 71% / 14.5x | 75% / 16.5x | 79% / 18.5x | 81% / 19.5x | 83% / 20.5x |
| 9.0x | 66% / 12.6x | 70% / 14.3x | 74% / 16.1x | 76% / 16.9x | 78% / 17.8x |
| 10.0x | 61% / 11.0x | 66% / 12.6x | 70% / 14.1x | 72% / 14.9x | 74% / 15.7x |
| 11.0x | 57% / 9.7x | 62% / 11.1x | 66% / 12.6x | 68% / 13.3x | 70% / 14.0x |
| 12.0x | 54% / 8.6x | 58% / 9.9x | 62% / 11.2x | 64% / 11.9x | 66% / 12.6x |
Covenant Headroom (at 10x Entry, 6.5x Max Leverage)
Pro forma EBITDA can decline 43% before the 6.5x covenant trips. RCM uplift reduces leverage from 8.5x to 3.7x, adding 4.7 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 | $65.4M | — | $65.4M | 4.1% |
| Year 1 | $67.4M | +$55.5M | $122.9M | 7.8% |
| Year 2 | $69.4M | +$83.3M | $152.6M | 9.6% |
| Year 3 | $71.5M | +$83.3M | $154.7M | 9.8% |
| Year 4 | $73.6M | +$83.3M | $156.9M | 9.9% |
| Year 5 | $75.8M | +$83.3M | $159.1M | 10.1% |
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 | $15.8M | $23.7M | $31.7M | $38.0M |
| Denial Rate Reductio | $15.7M | $23.5M | $31.3M | $37.6M |
| A/R Days Reduction | $9.6M | $14.4M | $19.3M | $23.1M |
| Clean Claim Rate | $506K | $760K | $1.0M | $1.2M |
| Total | $41.6M | $62.4M | $83.3M | $99.9M |
Peer Context — Where This Hospital Sits
Key metrics vs 36 size-matched peers. Low percentile on margin/efficiency metrics = more room for improvement = larger bridge opportunity.
| Metric | Hospital | P25 | P50 | P75 | Percentile |
|---|---|---|---|---|---|
| Op Margin | 4.1% | -19.0% | -5.6% | 1.0% | P81 |
| Net-to-Gross | 14.1% | 16.4% | 23.8% | 28.4% | P12 |
| Occupancy | 83.9% | 62.4% | 73.7% | 78.9% | P86 |
| Rev/Bed | $3.0M | $1.3M | $1.8M | $2.6M | P88 |
| Exp/Bed | $2.9M | $1.3M | $1.7M | $2.5M | P86 |
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.