Bridge Realization Estimate
ML model predicts what fraction of the bridge is achievable (accuracy: 60%, n=5,839)
Expected realization: 65% of modeled bridge. Strengths: Occupancy Rate, Net-to-Gross Ratio. Risks: Bed Count, Commercial Payer %. Risk-adjusted uplift: $45.5M (vs $69.7M 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 | $26.5M | $26.5M | $0 | 12mo |
| Denial Rate Reduction | 12.0% DEFAULT | 6.5% BENCHMARK | $25.5M | $729K | $26.2M | $0 | 12mo |
| A/R Days Reduction | 52.00 DEFAULT | 38.00 BENCHMARK | $4.1M | $12.1M | $16.1M | $50.8M | 9mo |
| Clean Claim Rate | 88.0% DEFAULT | 96.0% BENCHMARK | $0 | $848K | $848K | $0 | 6mo |
| Net Collection Rate | 93.5% DEFAULT | 27.4% 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 | $6.6M | $13.3M | $19.9M | $26.5M | $26.5M | $26.5M | $26.5M |
| Denial Rate Reduction | $0 | $6.6M | $13.1M | $19.7M | $26.2M | $26.2M | $26.2M | $26.2M |
| A/R Days Reduction | $0 | $5.4M | $10.7M | $16.1M | $16.1M | $16.1M | $16.1M | $16.1M |
| Clean Claim Rate | $0 | $424K | $848K | $848K | $848K | $848K | $848K | $848K |
| Cumulative | $0 | $19.0M | $38.0M | $56.5M | $69.7M | $69.7M | $69.7M | $69.7M |
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 $69.7M is added at exit.
| Entry \ Exit | 9.0x | 10.0x | 11.0x | 11.5x | 12.0x |
|---|---|---|---|---|---|
| 8.0x | 43% / 6.0x | 48% / 7.0x | 52% / 8.1x | 54% / 8.6x | 55% / 9.1x |
| 9.0x | 38% / 5.0x | 43% / 5.9x | 47% / 6.8x | 49% / 7.3x | 50% / 7.7x |
| 10.0x | 33% / 4.2x | 38% / 5.0x | 42% / 5.8x | 44% / 6.2x | 46% / 6.6x |
| 11.0x | 28% / 3.5x | 33% / 4.2x | 38% / 5.0x | 40% / 5.3x | 42% / 5.7x |
| 12.0x | 24% / 2.9x | 29% / 3.6x | 34% / 4.3x | 36% / 4.6x | 38% / 5.0x |
Covenant Headroom (at 10x Entry, 6.5x Max Leverage)
Pro forma EBITDA can decline -18% before the 6.5x covenant trips. RCM uplift reduces leverage from 8.5x to 7.7x, adding 0.8 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 | $658.1M | — | $658.1M | 49.7% |
| Year 1 | $677.9M | +$46.5M | $724.3M | 54.7% |
| Year 2 | $698.2M | +$69.7M | $767.9M | 57.9% |
| Year 3 | $719.1M | +$69.7M | $788.9M | 59.5% |
| Year 4 | $740.7M | +$69.7M | $810.4M | 61.2% |
| Year 5 | $762.9M | +$69.7M | $832.6M | 62.8% |
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 | $13.3M | $19.9M | $26.5M | $31.8M |
| Denial Rate Reductio | $13.1M | $19.7M | $26.2M | $31.5M |
| A/R Days Reduction | $8.1M | $12.1M | $16.1M | $19.3M |
| Clean Claim Rate | $424K | $636K | $848K | $1.0M |
| Total | $34.9M | $52.3M | $69.7M | $83.7M |
Peer Context — Where This Hospital Sits
Key metrics vs 35 size-matched peers. Low percentile on margin/efficiency metrics = more room for improvement = larger bridge opportunity.
| Metric | Hospital | P25 | P50 | P75 | Percentile |
|---|---|---|---|---|---|
| Op Margin | 49.7% | -23.4% | 2.2% | 12.9% | P97 |
| Net-to-Gross | 13.6% | 13.0% | 20.7% | 27.4% | P26 |
| Occupancy | 69.6% | 67.9% | 74.1% | 81.9% | P31 |
| Rev/Bed | $1.6M | $1.2M | $1.5M | $1.7M | P63 |
| Exp/Bed | $814K | $1.0M | $1.5M | $2.5M | P17 |
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.