Bridge Realization Estimate
ML model predicts what fraction of the bridge is achievable (accuracy: 60%, n=5,839)
Expected realization: 82% of modeled bridge. Strengths: Revenue per Bed, Occupancy Rate. Risks: Bed Count, Net-to-Gross Ratio. Risk-adjusted uplift: $383.9M (vs $470.5M 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 | $178.9M | $178.9M | $0 | 12mo |
| Denial Rate Reduction | 12.0% DEFAULT | 6.5% BENCHMARK | $172.2M | $4.9M | $177.1M | $0 | 12mo |
| A/R Days Reduction | 52.00 DEFAULT | 38.00 BENCHMARK | $27.4M | $81.4M | $108.8M | $343.1M | 9mo |
| Clean Claim Rate | 88.0% DEFAULT | 96.0% BENCHMARK | $0 | $5.7M | $5.7M | $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 | $44.7M | $89.4M | $134.2M | $178.9M | $178.9M | $178.9M | $178.9M |
| Denial Rate Reduction | $0 | $44.3M | $88.5M | $132.8M | $177.1M | $177.1M | $177.1M | $177.1M |
| A/R Days Reduction | $0 | $36.3M | $72.6M | $108.8M | $108.8M | $108.8M | $108.8M | $108.8M |
| Clean Claim Rate | $0 | $2.9M | $5.7M | $5.7M | $5.7M | $5.7M | $5.7M | $5.7M |
| Cumulative | $0 | $128.1M | $256.3M | $381.5M | $470.5M | $470.5M | $470.5M | $470.5M |
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 $470.5M is added at exit.
| Entry \ Exit | 9.0x | 10.0x | 11.0x | 11.5x | 12.0x |
|---|---|---|---|---|---|
| 8.0x | 41% / 5.7x | 46% / 6.7x | 50% / 7.7x | 52% / 8.1x | 54% / 8.6x |
| 9.0x | 36% / 4.7x | 41% / 5.6x | 45% / 6.4x | 47% / 6.9x | 49% / 7.3x |
| 10.0x | 31% / 3.9x | 36% / 4.7x | 40% / 5.5x | 42% / 5.9x | 44% / 6.3x |
| 11.0x | 26% / 3.2x | 32% / 4.0x | 36% / 4.7x | 38% / 5.0x | 40% / 5.4x |
| 12.0x | 22% / 2.7x | 27% / 3.4x | 32% / 4.0x | 34% / 4.3x | 36% / 4.7x |
Covenant Headroom (at 10x Entry, 6.5x Max Leverage)
Pro forma EBITDA can decline -23% before the 6.5x covenant trips. RCM uplift reduces leverage from 8.5x to 8.0x, adding 0.5 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 | $7.86B | — | $7.86B | 87.9% |
| Year 1 | $8.10B | +$313.7M | $8.41B | 94.1% |
| Year 2 | $8.34B | +$470.5M | $8.81B | 98.5% |
| Year 3 | $8.59B | +$470.5M | $9.06B | 101.3% |
| Year 4 | $8.85B | +$470.5M | $9.32B | 104.2% |
| Year 5 | $9.12B | +$470.5M | $9.59B | 107.2% |
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 | $89.4M | $134.2M | $178.9M | $214.7M |
| Denial Rate Reductio | $88.5M | $132.8M | $177.1M | $212.5M |
| A/R Days Reduction | $54.4M | $81.6M | $108.8M | $130.6M |
| Clean Claim Rate | $2.9M | $4.3M | $5.7M | $6.9M |
| Total | $235.3M | $352.9M | $470.5M | $564.7M |
Peer Context — Where This Hospital Sits
Key metrics vs 29 size-matched peers. Low percentile on margin/efficiency metrics = more room for improvement = larger bridge opportunity.
| Metric | Hospital | P25 | P50 | P75 | Percentile |
|---|---|---|---|---|---|
| Op Margin | 87.9% | -20.6% | -9.3% | -0.7% | P96 |
| Net-to-Gross | 100.0% | 16.9% | 23.9% | 28.4% | P96 |
| Occupancy | 71.5% | 70.2% | 75.4% | 78.5% | P31 |
| Rev/Bed | $14.1M | $1.7M | $2.2M | $2.7M | P96 |
| Exp/Bed | $1.7M | $1.6M | $2.1M | $2.6M | P31 |
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.