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. Risks: Bed Count, Commercial Payer %. Risk-adjusted uplift: $45.8M (vs $66.2M 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 | $25.2M | $25.2M | $0 | 12mo |
| Denial Rate Reduction | 12.0% DEFAULT | 6.5% BENCHMARK | $24.2M | $692K | $24.9M | $0 | 12mo |
| A/R Days Reduction | 52.00 DEFAULT | 38.00 BENCHMARK | $3.9M | $11.5M | $15.3M | $48.3M | 9mo |
| Clean Claim Rate | 88.0% DEFAULT | 96.0% BENCHMARK | $0 | $806K | $806K | $0 | 6mo |
| Net Collection Rate | 93.5% DEFAULT | 27.1% 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 | $6.3M | $12.6M | $18.9M | $25.2M | $25.2M | $25.2M | $25.2M |
| Denial Rate Reduction | $0 | $6.2M | $12.5M | $18.7M | $24.9M | $24.9M | $24.9M | $24.9M |
| A/R Days Reduction | $0 | $5.1M | $10.2M | $15.3M | $15.3M | $15.3M | $15.3M | $15.3M |
| Clean Claim Rate | $0 | $403K | $806K | $806K | $806K | $806K | $806K | $806K |
| Cumulative | $0 | $18.0M | $36.1M | $53.7M | $66.2M | $66.2M | $66.2M | $66.2M |
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 $66.2M is added at exit.
| Entry \ Exit | 9.0x | 10.0x | 11.0x | 11.5x | 12.0x |
|---|---|---|---|---|---|
| 8.0x | 150% / 97.7x | 156% / 109.0x | 161% / 120.2x | 163% / 125.8x | 165% / 131.4x |
| 9.0x | 144% / 86.5x | 149% / 96.5x | 154% / 106.5x | 157% / 111.5x | 159% / 116.4x |
| 10.0x | 139% / 77.5x | 144% / 86.5x | 149% / 95.5x | 151% / 100.0x | 153% / 104.5x |
| 11.0x | 134% / 70.2x | 139% / 78.3x | 144% / 86.5x | 146% / 90.6x | 148% / 94.7x |
| 12.0x | 130% / 64.1x | 135% / 71.5x | 140% / 79.0x | 142% / 82.8x | 144% / 86.5x |
Covenant Headroom (at 10x Entry, 6.5x Max Leverage)
Pro forma EBITDA can decline 90% before the 6.5x covenant trips. RCM uplift reduces leverage from 8.5x to 0.6x, adding 7.8 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 | $5.2M | — | $5.2M | 0.4% |
| Year 1 | $5.4M | +$44.2M | $49.5M | 3.9% |
| Year 2 | $5.6M | +$66.2M | $71.8M | 5.7% |
| Year 3 | $5.7M | +$66.2M | $72.0M | 5.7% |
| Year 4 | $5.9M | +$66.2M | $72.1M | 5.7% |
| Year 5 | $6.1M | +$66.2M | $72.3M | 5.7% |
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 | $12.6M | $18.9M | $25.2M | $30.2M |
| Denial Rate Reductio | $12.5M | $18.7M | $24.9M | $29.9M |
| A/R Days Reduction | $7.7M | $11.5M | $15.3M | $18.4M |
| Clean Claim Rate | $403K | $604K | $806K | $967K |
| Total | $33.1M | $49.7M | $66.2M | $79.5M |
Peer Context — Where This Hospital Sits
Key metrics vs 36 size-matched peers. Low percentile on margin/efficiency metrics = more room for improvement = larger bridge opportunity.
| Metric | Hospital | P25 | P50 | P75 | Percentile |
|---|---|---|---|---|---|
| Op Margin | 0.4% | -20.2% | 2.5% | 12.8% | P44 |
| Net-to-Gross | 31.7% | 13.3% | 21.2% | 27.1% | P83 |
| Occupancy | 89.9% | 67.1% | 73.0% | 81.9% | P92 |
| Rev/Bed | $1.6M | $1.2M | $1.5M | $1.7M | P61 |
| Exp/Bed | $1.6M | $1.1M | $1.4M | $2.4M | P56 |
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.