Bridge Realization Estimate
ML model predicts what fraction of the bridge is achievable (accuracy: 60%, n=5,839)
Expected realization: 77% of modeled bridge. Strengths: Occupancy Rate, Payer Diversity. Risks: Commercial Payer %, Bed Count. Risk-adjusted uplift: $17.6M (vs $22.9M 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 | $8.7M | $8.7M | $0 | 12mo |
| Denial Rate Reduction | 12.0% DEFAULT | 6.5% BENCHMARK | $8.4M | $239K | $8.6M | $0 | 12mo |
| A/R Days Reduction | 52.00 DEFAULT | 38.00 BENCHMARK | $1.3M | $4.0M | $5.3M | $16.7M | 9mo |
| Clean Claim Rate | 88.0% DEFAULT | 96.0% BENCHMARK | $0 | $279K | $279K | $0 | 6mo |
| Net Collection Rate | 93.5% DEFAULT | 26.0% 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 | $2.2M | $4.4M | $6.5M | $8.7M | $8.7M | $8.7M | $8.7M |
| Denial Rate Reduction | $0 | $2.2M | $4.3M | $6.5M | $8.6M | $8.6M | $8.6M | $8.6M |
| A/R Days Reduction | $0 | $1.8M | $3.5M | $5.3M | $5.3M | $5.3M | $5.3M | $5.3M |
| Clean Claim Rate | $0 | $139K | $279K | $279K | $279K | $279K | $279K | $279K |
| Cumulative | $0 | $6.2M | $12.5M | $18.6M | $22.9M | $22.9M | $22.9M | $22.9M |
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 $22.9M is added at exit.
| Entry \ Exit | 9.0x | 10.0x | 11.0x | 11.5x | 12.0x |
|---|---|---|---|---|---|
| 8.0x | 42% / 5.8x | 47% / 6.8x | 51% / 7.8x | 53% / 8.3x | 55% / 8.8x |
| 9.0x | 37% / 4.8x | 42% / 5.7x | 46% / 6.6x | 48% / 7.0x | 50% / 7.5x |
| 10.0x | 32% / 4.0x | 37% / 4.8x | 41% / 5.6x | 43% / 6.0x | 45% / 6.4x |
| 11.0x | 27% / 3.3x | 32% / 4.1x | 37% / 4.8x | 39% / 5.2x | 41% / 5.5x |
| 12.0x | 23% / 2.8x | 28% / 3.5x | 33% / 4.1x | 35% / 4.5x | 37% / 4.8x |
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 7.9x, adding 0.6 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 | $295.5M | — | $295.5M | 67.9% |
| Year 1 | $304.4M | +$15.3M | $319.7M | 73.4% |
| Year 2 | $313.5M | +$22.9M | $336.4M | 77.3% |
| Year 3 | $322.9M | +$22.9M | $345.8M | 79.4% |
| Year 4 | $332.6M | +$22.9M | $355.5M | 81.7% |
| Year 5 | $342.6M | +$22.9M | $365.5M | 84.0% |
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 | $4.4M | $6.5M | $8.7M | $10.4M |
| Denial Rate Reductio | $4.3M | $6.5M | $8.6M | $10.3M |
| A/R Days Reduction | $2.6M | $4.0M | $5.3M | $6.4M |
| Clean Claim Rate | $139K | $209K | $279K | $334K |
| Total | $11.5M | $17.2M | $22.9M | $27.5M |
Peer Context — Where This Hospital Sits
Key metrics vs 135 size-matched peers. Low percentile on margin/efficiency metrics = more room for improvement = larger bridge opportunity.
| Metric | Hospital | P25 | P50 | P75 | Percentile |
|---|---|---|---|---|---|
| Op Margin | 67.9% | -7.3% | 4.9% | 14.3% | P99 |
| Net-to-Gross | 17.0% | 13.3% | 18.6% | 26.0% | P39 |
| Occupancy | 99.2% | 53.2% | 66.6% | 75.7% | P97 |
| Rev/Bed | $1.7M | $670K | $1.2M | $1.5M | P82 |
| Exp/Bed | $555K | $693K | $1.1M | $1.5M | P19 |
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.