Bridge Realization Estimate
ML model predicts what fraction of the bridge is achievable (accuracy: 60%, n=5,839)
Expected realization: 60% of modeled bridge. Strengths: Occupancy Rate. Risks: Bed Count, Commercial Payer %. Risk-adjusted uplift: $67.4M (vs $112.9M 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 | $42.9M | $42.9M | $0 | 12mo |
| Denial Rate Reduction | 12.0% DEFAULT | 6.5% BENCHMARK | $41.3M | $1.2M | $42.5M | $0 | 12mo |
| A/R Days Reduction | 52.00 DEFAULT | 38.00 BENCHMARK | $6.6M | $19.5M | $26.1M | $82.3M | 9mo |
| Clean Claim Rate | 88.0% DEFAULT | 96.0% BENCHMARK | $0 | $1.4M | $1.4M | $0 | 6mo |
| Net Collection Rate | 93.5% DEFAULT | 31.7% 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 | $10.7M | $21.5M | $32.2M | $42.9M | $42.9M | $42.9M | $42.9M |
| Denial Rate Reduction | $0 | $10.6M | $21.2M | $31.9M | $42.5M | $42.5M | $42.5M | $42.5M |
| A/R Days Reduction | $0 | $8.7M | $17.4M | $26.1M | $26.1M | $26.1M | $26.1M | $26.1M |
| Clean Claim Rate | $0 | $686K | $1.4M | $1.4M | $1.4M | $1.4M | $1.4M | $1.4M |
| Cumulative | $0 | $30.7M | $61.5M | $91.5M | $112.9M | $112.9M | $112.9M | $112.9M |
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 $112.9M is added at exit.
| Entry \ Exit | 9.0x | 10.0x | 11.0x | 11.5x | 12.0x |
|---|---|---|---|---|---|
| 8.0x | 60% / 10.5x | 65% / 12.1x | 69% / 13.6x | 70% / 14.3x | 72% / 15.1x |
| 9.0x | 55% / 9.0x | 60% / 10.4x | 64% / 11.7x | 65% / 12.4x | 67% / 13.1x |
| 10.0x | 51% / 7.8x | 55% / 9.0x | 59% / 10.2x | 61% / 10.8x | 63% / 11.4x |
| 11.0x | 47% / 6.8x | 51% / 7.9x | 55% / 9.0x | 57% / 9.6x | 59% / 10.1x |
| 12.0x | 43% / 5.9x | 47% / 7.0x | 51% / 8.0x | 53% / 8.5x | 55% / 9.0x |
Covenant Headroom (at 10x Entry, 6.5x Max Leverage)
Pro forma EBITDA can decline 25% before the 6.5x covenant trips. RCM uplift reduces leverage from 8.5x to 4.9x, adding 3.6 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 | $155.8M | — | $155.8M | 7.3% |
| Year 1 | $160.5M | +$75.2M | $235.7M | 11.0% |
| Year 2 | $165.3M | +$112.9M | $278.1M | 13.0% |
| Year 3 | $170.2M | +$112.9M | $283.1M | 13.2% |
| Year 4 | $175.3M | +$112.9M | $288.2M | 13.4% |
| Year 5 | $180.6M | +$112.9M | $293.4M | 13.7% |
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 | $21.5M | $32.2M | $42.9M | $51.5M |
| Denial Rate Reductio | $21.2M | $31.9M | $42.5M | $51.0M |
| A/R Days Reduction | $13.1M | $19.6M | $26.1M | $31.3M |
| Clean Claim Rate | $686K | $1.0M | $1.4M | $1.6M |
| Total | $56.4M | $84.6M | $112.9M | $135.4M |
Peer Context — Where This Hospital Sits
Key metrics vs 13 size-matched peers. Low percentile on margin/efficiency metrics = more room for improvement = larger bridge opportunity.
| Metric | Hospital | P25 | P50 | P75 | Percentile |
|---|---|---|---|---|---|
| Op Margin | 7.3% | -4.6% | 2.8% | 12.7% | P62 |
| Net-to-Gross | 21.8% | 13.3% | 21.8% | 31.7% | P46 |
| Occupancy | 71.9% | 69.6% | 78.0% | 81.9% | P31 |
| Rev/Bed | $1.5M | $1.4M | $1.6M | $2.7M | P38 |
| Exp/Bed | $1.4M | $1.1M | $1.9M | $3.0M | 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.