Bridge Realization Estimate
ML model predicts what fraction of the bridge is achievable (accuracy: 60%, n=5,839)
Expected realization: 71% of modeled bridge. Strengths: Occupancy Rate, Revenue per Bed. Risks: Bed Count. Risk-adjusted uplift: $54.6M (vs $77.3M 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 | $29.4M | $29.4M | $0 | 12mo |
| Denial Rate Reduction | 12.0% DEFAULT | 6.5% BENCHMARK | $28.3M | $809K | $29.1M | $0 | 12mo |
| A/R Days Reduction | 52.00 DEFAULT | 38.00 BENCHMARK | $4.5M | $13.4M | $17.9M | $56.4M | 9mo |
| Clean Claim Rate | 88.0% DEFAULT | 96.0% BENCHMARK | $0 | $941K | $941K | $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 | $7.4M | $14.7M | $22.1M | $29.4M | $29.4M | $29.4M | $29.4M |
| Denial Rate Reduction | $0 | $7.3M | $14.6M | $21.8M | $29.1M | $29.1M | $29.1M | $29.1M |
| A/R Days Reduction | $0 | $6.0M | $11.9M | $17.9M | $17.9M | $17.9M | $17.9M | $17.9M |
| Clean Claim Rate | $0 | $470K | $941K | $941K | $941K | $941K | $941K | $941K |
| Cumulative | $0 | $21.1M | $42.1M | $62.7M | $77.3M | $77.3M | $77.3M | $77.3M |
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 $77.3M is added at exit.
| Entry \ Exit | 9.0x | 10.0x | 11.0x | 11.5x | 12.0x |
|---|---|---|---|---|---|
| 8.0x | 56% / 9.2x | 60% / 10.6x | 64% / 11.9x | 66% / 12.6x | 68% / 13.3x |
| 9.0x | 51% / 7.8x | 55% / 9.0x | 59% / 10.2x | 61% / 10.9x | 63% / 11.5x |
| 10.0x | 46% / 6.7x | 51% / 7.8x | 55% / 8.9x | 57% / 9.4x | 59% / 10.0x |
| 11.0x | 42% / 5.8x | 47% / 6.8x | 51% / 7.8x | 53% / 8.3x | 55% / 8.8x |
| 12.0x | 38% / 5.0x | 43% / 6.0x | 47% / 6.9x | 49% / 7.3x | 51% / 7.8x |
Covenant Headroom (at 10x Entry, 6.5x Max Leverage)
Pro forma EBITDA can decline 15% before the 6.5x covenant trips. RCM uplift reduces leverage from 8.5x to 5.5x, adding 3.0 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 | $143.2M | — | $143.2M | 9.7% |
| Year 1 | $147.5M | +$51.6M | $199.1M | 13.5% |
| Year 2 | $151.9M | +$77.3M | $229.3M | 15.6% |
| Year 3 | $156.5M | +$77.3M | $233.8M | 15.9% |
| Year 4 | $161.2M | +$77.3M | $238.5M | 16.2% |
| Year 5 | $166.0M | +$77.3M | $243.4M | 16.6% |
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 | $14.7M | $22.1M | $29.4M | $35.3M |
| Denial Rate Reductio | $14.6M | $21.8M | $29.1M | $34.9M |
| A/R Days Reduction | $8.9M | $13.4M | $17.9M | $21.5M |
| Clean Claim Rate | $470K | $706K | $941K | $1.1M |
| Total | $38.7M | $58.0M | $77.3M | $92.8M |
Peer Context — Where This Hospital Sits
Key metrics vs 35 size-matched peers. Low percentile on margin/efficiency metrics = more room for improvement = larger bridge opportunity.
| Metric | Hospital | P25 | P50 | P75 | Percentile |
|---|---|---|---|---|---|
| Op Margin | 9.7% | -19.0% | -7.0% | 0.1% | P94 |
| Net-to-Gross | 36.5% | 16.8% | 23.8% | 28.4% | P94 |
| Occupancy | 77.3% | 62.0% | 73.3% | 78.0% | P69 |
| Rev/Bed | $2.8M | $1.3M | $1.9M | $2.6M | P78 |
| Exp/Bed | $2.5M | $1.4M | $1.9M | $2.6M | P69 |
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.