Bridge Realization Estimate
ML model predicts what fraction of the bridge is achievable (accuracy: 60%, n=5,839)
Expected realization: 69% of modeled bridge. Strengths: Occupancy Rate, Commercial Payer %. Risks: Bed Count. Risk-adjusted uplift: $35.7M (vs $51.8M 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 | $19.7M | $19.7M | $0 | 12mo |
| Denial Rate Reduction | 12.0% DEFAULT | 6.5% BENCHMARK | $19.0M | $542K | $19.5M | $0 | 12mo |
| A/R Days Reduction | 52.00 DEFAULT | 38.00 BENCHMARK | $3.0M | $9.0M | $12.0M | $37.8M | 9mo |
| Clean Claim Rate | 88.0% DEFAULT | 96.0% BENCHMARK | $0 | $631K | $631K | $0 | 6mo |
| Net Collection Rate | 93.5% DEFAULT | 26.5% 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 | $19.7M | $19.7M | $19.7M | $19.7M |
| Denial Rate Reduction | $0 | $4.9M | $9.8M | $14.6M | $19.5M | $19.5M | $19.5M | $19.5M |
| A/R Days Reduction | $0 | $4.0M | $8.0M | $12.0M | $12.0M | $12.0M | $12.0M | $12.0M |
| Clean Claim Rate | $0 | $315K | $631K | $631K | $631K | $631K | $631K | $631K |
| Cumulative | $0 | $14.1M | $28.2M | $42.0M | $51.8M | $51.8M | $51.8M | $51.8M |
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 $51.8M is added at exit.
| Entry \ Exit | 9.0x | 10.0x | 11.0x | 11.5x | 12.0x |
|---|---|---|---|---|---|
| 8.0x | 59% / 10.0x | 63% / 11.5x | 67% / 13.0x | 69% / 13.7x | 71% / 14.5x |
| 9.0x | 54% / 8.6x | 58% / 9.9x | 62% / 11.2x | 64% / 11.8x | 66% / 12.5x |
| 10.0x | 49% / 7.4x | 54% / 8.6x | 58% / 9.7x | 60% / 10.3x | 61% / 10.9x |
| 11.0x | 45% / 6.4x | 50% / 7.5x | 54% / 8.6x | 56% / 9.1x | 57% / 9.6x |
| 12.0x | 41% / 5.6x | 46% / 6.6x | 50% / 7.6x | 52% / 8.1x | 54% / 8.6x |
Covenant Headroom (at 10x Entry, 6.5x Max Leverage)
Pro forma EBITDA can decline 21% before the 6.5x covenant trips. RCM uplift reduces leverage from 8.5x to 5.1x, adding 3.4 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 | $78.8M | — | $78.8M | 8.0% |
| Year 1 | $81.2M | +$34.6M | $115.8M | 11.7% |
| Year 2 | $83.6M | +$51.8M | $135.5M | 13.7% |
| Year 3 | $86.1M | +$51.8M | $138.0M | 14.0% |
| Year 4 | $88.7M | +$51.8M | $140.6M | 14.3% |
| Year 5 | $91.4M | +$51.8M | $143.2M | 14.5% |
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 | $19.7M | $23.7M |
| Denial Rate Reductio | $9.8M | $14.6M | $19.5M | $23.4M |
| A/R Days Reduction | $6.0M | $9.0M | $12.0M | $14.4M |
| Clean Claim Rate | $315K | $473K | $631K | $757K |
| Total | $25.9M | $38.9M | $51.8M | $62.2M |
Peer Context — Where This Hospital Sits
Key metrics vs 38 size-matched peers. Low percentile on margin/efficiency metrics = more room for improvement = larger bridge opportunity.
| Metric | Hospital | P25 | P50 | P75 | Percentile |
|---|---|---|---|---|---|
| Op Margin | -50.0% | -15.4% | 3.5% | 13.0% | P0 |
| Net-to-Gross | 11.8% | 12.7% | 21.2% | 26.5% | P18 |
| Occupancy | 82.0% | 67.7% | 74.8% | 81.4% | P76 |
| Rev/Bed | $1.3M | $1.2M | $1.5M | $1.7M | P26 |
| Exp/Bed | $3.0M | $1.0M | $1.4M | $2.3M | P84 |
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.