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, Revenue per Bed. Risks: Bed Count, Commercial Payer %. Risk-adjusted uplift: $70.6M (vs $104.5M 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 | $39.7M | $39.7M | $0 | 12mo |
| Denial Rate Reduction | 12.0% DEFAULT | 6.5% BENCHMARK | $38.2M | $1.1M | $39.3M | $0 | 12mo |
| A/R Days Reduction | 52.00 DEFAULT | 38.00 BENCHMARK | $6.1M | $18.1M | $24.2M | $76.2M | 9mo |
| Clean Claim Rate | 88.0% DEFAULT | 96.0% BENCHMARK | $0 | $1.3M | $1.3M | $0 | 6mo |
| Net Collection Rate | 93.5% DEFAULT | 30.8% 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 | $9.9M | $19.9M | $29.8M | $39.7M | $39.7M | $39.7M | $39.7M |
| Denial Rate Reduction | $0 | $9.8M | $19.7M | $29.5M | $39.3M | $39.3M | $39.3M | $39.3M |
| A/R Days Reduction | $0 | $8.1M | $16.1M | $24.2M | $24.2M | $24.2M | $24.2M | $24.2M |
| Clean Claim Rate | $0 | $635K | $1.3M | $1.3M | $1.3M | $1.3M | $1.3M | $1.3M |
| Cumulative | $0 | $28.4M | $56.9M | $84.7M | $104.5M | $104.5M | $104.5M | $104.5M |
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 $104.5M is added at exit.
| Entry \ Exit | 9.0x | 10.0x | 11.0x | 11.5x | 12.0x |
|---|---|---|---|---|---|
| 8.0x | 122% / 54.1x | 127% / 60.5x | 132% / 66.9x | 134% / 70.0x | 136% / 73.2x |
| 9.0x | 117% / 47.7x | 122% / 53.4x | 126% / 59.1x | 128% / 61.9x | 130% / 64.7x |
| 10.0x | 112% / 42.6x | 117% / 47.7x | 121% / 52.8x | 123% / 55.4x | 125% / 57.9x |
| 11.0x | 108% / 38.5x | 112% / 43.1x | 117% / 47.7x | 119% / 50.1x | 121% / 52.4x |
| 12.0x | 104% / 35.0x | 108% / 39.2x | 113% / 43.5x | 115% / 45.6x | 117% / 47.7x |
Covenant Headroom (at 10x Entry, 6.5x Max Leverage)
Pro forma EBITDA can decline 83% before the 6.5x covenant trips. RCM uplift reduces leverage from 8.5x to 1.1x, adding 7.4 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 | $15.6M | — | $15.6M | 0.8% |
| Year 1 | $16.1M | +$69.6M | $85.7M | 4.3% |
| Year 2 | $16.6M | +$104.5M | $121.0M | 6.1% |
| Year 3 | $17.1M | +$104.5M | $121.5M | 6.1% |
| Year 4 | $17.6M | +$104.5M | $122.0M | 6.1% |
| Year 5 | $18.1M | +$104.5M | $122.6M | 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 | $19.9M | $29.8M | $39.7M | $47.7M |
| Denial Rate Reductio | $19.7M | $29.5M | $39.3M | $47.2M |
| A/R Days Reduction | $12.1M | $18.1M | $24.2M | $29.0M |
| Clean Claim Rate | $635K | $953K | $1.3M | $1.5M |
| Total | $52.2M | $78.3M | $104.5M | $125.4M |
Peer Context — Where This Hospital Sits
Key metrics vs 19 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% | -16.1% | -5.9% | 2.5% | P68 |
| Net-to-Gross | 13.3% | 17.2% | 27.4% | 30.8% | P11 |
| Occupancy | 71.4% | 70.8% | 74.5% | 77.9% | P26 |
| Rev/Bed | $2.6M | $1.9M | $2.2M | $2.9M | P63 |
| Exp/Bed | $2.6M | $1.8M | $2.4M | $2.7M | P68 |
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.