Bridge Realization Estimate
ML model predicts what fraction of the bridge is achievable (accuracy: 60%, n=5,839)
Expected realization: 76% of modeled bridge. Strengths: Occupancy Rate, Revenue per Bed. Risks: Bed Count, Commercial Payer %. Risk-adjusted uplift: $39.5M (vs $52.0M 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 | $19.8M | $19.8M | $0 | 12mo |
| Denial Rate Reduction | 12.0% DEFAULT | 6.5% BENCHMARK | $19.0M | $544K | $19.6M | $0 | 12mo |
| A/R Days Reduction | 52.00 DEFAULT | 38.00 BENCHMARK | $3.0M | $9.0M | $12.0M | $37.9M | 9mo |
| Clean Claim Rate | 88.0% DEFAULT | 96.0% BENCHMARK | $0 | $633K | $633K | $0 | 6mo |
| Net Collection Rate | 93.5% DEFAULT | 30.0% 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 | $4.9M | $9.9M | $14.8M | $19.8M | $19.8M | $19.8M | $19.8M |
| Denial Rate Reduction | $0 | $4.9M | $9.8M | $14.7M | $19.6M | $19.6M | $19.6M | $19.6M |
| A/R Days Reduction | $0 | $4.0M | $8.0M | $12.0M | $12.0M | $12.0M | $12.0M | $12.0M |
| Clean Claim Rate | $0 | $316K | $633K | $633K | $633K | $633K | $633K | $633K |
| Cumulative | $0 | $14.2M | $28.3M | $42.2M | $52.0M | $52.0M | $52.0M | $52.0M |
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 $52.0M is added at exit.
| Entry \ Exit | 9.0x | 10.0x | 11.0x | 11.5x | 12.0x |
|---|---|---|---|---|---|
| 8.0x | Loss | Loss | Loss | Loss | Loss |
| 9.0x | Loss | Loss | Loss | Loss | Loss |
| 10.0x | Loss | Loss | Loss | Loss | Loss |
| 11.0x | Loss | Loss | Loss | Loss | Loss |
| 12.0x | Loss | Loss | Loss | Loss | Loss |
Covenant Headroom (at 10x Entry, 6.5x Max Leverage)
Pro forma EBITDA can decline 0% before the 6.5x covenant trips. RCM uplift reduces leverage from 99.0x to 99.0x, adding 0.0 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 | $-186.4M | — | $-186.4M | -18.9% |
| Year 1 | $-192.0M | +$34.7M | $-157.3M | -15.9% |
| Year 2 | $-197.8M | +$52.0M | $-145.8M | -14.7% |
| Year 3 | $-203.7M | +$52.0M | $-151.7M | -15.3% |
| Year 4 | $-209.8M | +$52.0M | $-157.8M | -16.0% |
| Year 5 | $-216.1M | +$52.0M | $-164.1M | -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 | $9.9M | $14.8M | $19.8M | $23.7M |
| Denial Rate Reductio | $9.8M | $14.7M | $19.6M | $23.5M |
| A/R Days Reduction | $6.0M | $9.0M | $12.0M | $14.4M |
| Clean Claim Rate | $316K | $474K | $633K | $759K |
| Total | $26.0M | $39.0M | $52.0M | $62.4M |
Peer Context — Where This Hospital Sits
Key metrics vs 65 size-matched peers. Low percentile on margin/efficiency metrics = more room for improvement = larger bridge opportunity.
| Metric | Hospital | P25 | P50 | P75 | Percentile |
|---|---|---|---|---|---|
| Op Margin | -18.9% | -16.7% | -6.9% | 0.3% | P20 |
| Net-to-Gross | 16.8% | 16.8% | 23.1% | 30.0% | P25 |
| Occupancy | 89.6% | 56.3% | 69.3% | 77.5% | P92 |
| Rev/Bed | $3.0M | $1.1M | $1.5M | $1.9M | P92 |
| Exp/Bed | $3.6M | $1.2M | $1.6M | $1.9M | P98 |
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.