Bridge Realization Estimate
ML model predicts what fraction of the bridge is achievable (accuracy: 60%, n=5,839)
Expected realization: 59% of modeled bridge. Strengths: Occupancy Rate, Net-to-Gross Ratio. Risks: Bed Count, Commercial Payer %. Risk-adjusted uplift: $75.0M (vs $127.2M 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 | $48.3M | $48.3M | $0 | 12mo |
| Denial Rate Reduction | 12.0% DEFAULT | 6.5% BENCHMARK | $46.5M | $1.3M | $47.9M | $0 | 12mo |
| A/R Days Reduction | 52.00 DEFAULT | 38.00 BENCHMARK | $7.4M | $22.0M | $29.4M | $92.7M | 9mo |
| Clean Claim Rate | 88.0% DEFAULT | 96.0% BENCHMARK | $0 | $1.5M | $1.5M | $0 | 6mo |
| Net Collection Rate | 93.5% DEFAULT | 29.8% 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 | $12.1M | $24.2M | $36.3M | $48.3M | $48.3M | $48.3M | $48.3M |
| Denial Rate Reduction | $0 | $12.0M | $23.9M | $35.9M | $47.9M | $47.9M | $47.9M | $47.9M |
| A/R Days Reduction | $0 | $9.8M | $19.6M | $29.4M | $29.4M | $29.4M | $29.4M | $29.4M |
| Clean Claim Rate | $0 | $774K | $1.5M | $1.5M | $1.5M | $1.5M | $1.5M | $1.5M |
| Cumulative | $0 | $34.6M | $69.3M | $103.1M | $127.2M | $127.2M | $127.2M | $127.2M |
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 $127.2M is added at exit.
| Entry \ Exit | 9.0x | 10.0x | 11.0x | 11.5x | 12.0x |
|---|---|---|---|---|---|
| 8.0x | 47% / 6.9x | 52% / 8.0x | 56% / 9.2x | 58% / 9.7x | 59% / 10.3x |
| 9.0x | 42% / 5.8x | 47% / 6.8x | 51% / 7.8x | 53% / 8.3x | 54% / 8.8x |
| 10.0x | 37% / 4.9x | 42% / 5.8x | 46% / 6.7x | 48% / 7.1x | 50% / 7.6x |
| 11.0x | 33% / 4.1x | 38% / 5.0x | 42% / 5.8x | 44% / 6.2x | 46% / 6.6x |
| 12.0x | 29% / 3.5x | 34% / 4.3x | 38% / 5.0x | 40% / 5.4x | 42% / 5.8x |
Covenant Headroom (at 10x Entry, 6.5x Max Leverage)
Pro forma EBITDA can decline -6% before the 6.5x covenant trips. RCM uplift reduces leverage from 8.5x to 6.9x, adding 1.6 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 | $553.5M | — | $553.5M | 22.9% |
| Year 1 | $570.1M | +$84.8M | $654.9M | 27.1% |
| Year 2 | $587.2M | +$127.2M | $714.4M | 29.6% |
| Year 3 | $604.9M | +$127.2M | $732.0M | 30.3% |
| Year 4 | $623.0M | +$127.2M | $750.2M | 31.0% |
| Year 5 | $641.7M | +$127.2M | $768.9M | 31.8% |
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 | $24.2M | $36.3M | $48.3M | $58.0M |
| Denial Rate Reductio | $23.9M | $35.9M | $47.9M | $57.4M |
| A/R Days Reduction | $14.7M | $22.1M | $29.4M | $35.3M |
| Clean Claim Rate | $774K | $1.2M | $1.5M | $1.9M |
| Total | $63.6M | $95.4M | $127.2M | $152.6M |
Peer Context — Where This Hospital Sits
Key metrics vs 54 size-matched peers. Low percentile on margin/efficiency metrics = more room for improvement = larger bridge opportunity.
| Metric | Hospital | P25 | P50 | P75 | Percentile |
|---|---|---|---|---|---|
| Op Margin | 22.9% | -17.7% | -7.1% | 0.9% | P96 |
| Net-to-Gross | 13.3% | 20.7% | 25.0% | 29.8% | P6 |
| Occupancy | 81.9% | 73.4% | 79.7% | 87.0% | P57 |
| Rev/Bed | $1.4M | $1.6M | $2.1M | $2.7M | P11 |
| Exp/Bed | $1.1M | $1.6M | $2.3M | $3.0M | P7 |
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.