Bridge Realization Estimate
ML model predicts what fraction of the bridge is achievable (accuracy: 60%, n=5,839)
Expected realization: 68% of modeled bridge. Strengths: Revenue per Bed, Payer Diversity. Risks: Commercial Payer %, Bed Count. Risk-adjusted uplift: $24.9M (vs $36.5M 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 | $13.9M | $13.9M | $0 | 12mo |
| Denial Rate Reduction | 12.0% DEFAULT | 6.5% BENCHMARK | $13.4M | $382K | $13.7M | $0 | 12mo |
| A/R Days Reduction | 52.00 DEFAULT | 38.00 BENCHMARK | $2.1M | $6.3M | $8.4M | $26.6M | 9mo |
| Clean Claim Rate | 88.0% DEFAULT | 96.0% BENCHMARK | $0 | $444K | $444K | $0 | 6mo |
| Net Collection Rate | 93.5% DEFAULT | 28.1% 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 | $3.5M | $6.9M | $10.4M | $13.9M | $13.9M | $13.9M | $13.9M |
| Denial Rate Reduction | $0 | $3.4M | $6.9M | $10.3M | $13.7M | $13.7M | $13.7M | $13.7M |
| A/R Days Reduction | $0 | $2.8M | $5.6M | $8.4M | $8.4M | $8.4M | $8.4M | $8.4M |
| Clean Claim Rate | $0 | $222K | $444K | $444K | $444K | $444K | $444K | $444K |
| Cumulative | $0 | $9.9M | $19.9M | $29.6M | $36.5M | $36.5M | $36.5M | $36.5M |
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 $36.5M is added at exit.
| Entry \ Exit | 9.0x | 10.0x | 11.0x | 11.5x | 12.0x |
|---|---|---|---|---|---|
| 8.0x | 46% / 6.5x | 50% / 7.6x | 54% / 8.7x | 56% / 9.3x | 58% / 9.8x |
| 9.0x | 40% / 5.5x | 45% / 6.4x | 49% / 7.4x | 51% / 7.9x | 53% / 8.3x |
| 10.0x | 36% / 4.6x | 40% / 5.5x | 45% / 6.3x | 47% / 6.8x | 48% / 7.2x |
| 11.0x | 31% / 3.9x | 36% / 4.7x | 40% / 5.5x | 42% / 5.8x | 44% / 6.2x |
| 12.0x | 27% / 3.3x | 32% / 4.0x | 36% / 4.7x | 38% / 5.1x | 40% / 5.5x |
Covenant Headroom (at 10x Entry, 6.5x Max Leverage)
Pro forma EBITDA can decline -10% before the 6.5x covenant trips. RCM uplift reduces leverage from 8.5x to 7.2x, adding 1.3 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 | $204.3M | — | $204.3M | 29.4% |
| Year 1 | $210.4M | +$24.4M | $234.8M | 33.8% |
| Year 2 | $216.7M | +$36.5M | $253.2M | 36.5% |
| Year 3 | $223.2M | +$36.5M | $259.7M | 37.4% |
| Year 4 | $229.9M | +$36.5M | $266.4M | 38.4% |
| Year 5 | $236.8M | +$36.5M | $273.3M | 39.4% |
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 | $6.9M | $10.4M | $13.9M | $16.7M |
| Denial Rate Reductio | $6.9M | $10.3M | $13.7M | $16.5M |
| A/R Days Reduction | $4.2M | $6.3M | $8.4M | $10.1M |
| Clean Claim Rate | $222K | $333K | $444K | $533K |
| Total | $18.3M | $27.4M | $36.5M | $43.8M |
Peer Context — Where This Hospital Sits
Key metrics vs 149 size-matched peers. Low percentile on margin/efficiency metrics = more room for improvement = larger bridge opportunity.
| Metric | Hospital | P25 | P50 | P75 | Percentile |
|---|---|---|---|---|---|
| Op Margin | 29.4% | -6.7% | 5.4% | 13.9% | P97 |
| Net-to-Gross | 42.8% | 13.5% | 18.9% | 28.1% | P91 |
| Occupancy | 49.4% | 50.1% | 65.6% | 75.4% | P24 |
| Rev/Bed | $3.2M | $613K | $1.2M | $1.5M | P96 |
| Exp/Bed | $2.3M | $636K | $1.0M | $1.5M | P94 |
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.