Bridge Realization Estimate
ML model predicts what fraction of the bridge is achievable (accuracy: 60%, n=5,839)
Expected realization: 68% of modeled bridge. Risks: Commercial Payer %. Risk-adjusted uplift: $10.7M (vs $15.7M 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 | $6.0M | $6.0M | $0 | 12mo |
| Denial Rate Reduction | 12.0% DEFAULT | 6.5% BENCHMARK | $5.8M | $165K | $5.9M | $0 | 12mo |
| A/R Days Reduction | 52.00 DEFAULT | 38.00 BENCHMARK | $918K | $2.7M | $3.6M | $11.5M | 9mo |
| Clean Claim Rate | 88.0% DEFAULT | 96.0% BENCHMARK | $0 | $192K | $192K | $0 | 6mo |
| Net Collection Rate | 93.5% DEFAULT | 41.7% 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 | $1.5M | $3.0M | $4.5M | $6.0M | $6.0M | $6.0M | $6.0M |
| Denial Rate Reduction | $0 | $1.5M | $3.0M | $4.4M | $5.9M | $5.9M | $5.9M | $5.9M |
| A/R Days Reduction | $0 | $1.2M | $2.4M | $3.6M | $3.6M | $3.6M | $3.6M | $3.6M |
| Clean Claim Rate | $0 | $96K | $192K | $192K | $192K | $192K | $192K | $192K |
| Cumulative | $0 | $4.3M | $8.6M | $12.8M | $15.7M | $15.7M | $15.7M | $15.7M |
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 $15.7M is added at exit.
| Entry \ Exit | 9.0x | 10.0x | 11.0x | 11.5x | 12.0x |
|---|---|---|---|---|---|
| 8.0x | 43% / 6.0x | 48% / 7.1x | 52% / 8.1x | 54% / 8.6x | 56% / 9.1x |
| 9.0x | 38% / 5.0x | 43% / 5.9x | 47% / 6.8x | 49% / 7.3x | 51% / 7.8x |
| 10.0x | 33% / 4.2x | 38% / 5.0x | 42% / 5.8x | 44% / 6.2x | 46% / 6.7x |
| 11.0x | 29% / 3.5x | 34% / 4.3x | 38% / 5.0x | 40% / 5.4x | 42% / 5.8x |
| 12.0x | 24% / 3.0x | 29% / 3.6x | 34% / 4.3x | 36% / 4.7x | 38% / 5.0x |
Covenant Headroom (at 10x Entry, 6.5x Max Leverage)
Pro forma EBITDA can decline -17% before the 6.5x covenant trips. RCM uplift reduces leverage from 8.5x to 7.6x, 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 | $141.8M | — | $141.8M | 47.4% |
| Year 1 | $146.0M | +$10.5M | $156.5M | 52.3% |
| Year 2 | $150.4M | +$15.7M | $166.2M | 55.5% |
| Year 3 | $154.9M | +$15.7M | $170.7M | 57.0% |
| Year 4 | $159.6M | +$15.7M | $175.3M | 58.6% |
| Year 5 | $164.4M | +$15.7M | $180.1M | 60.2% |
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 | $3.0M | $4.5M | $6.0M | $7.2M |
| Denial Rate Reductio | $3.0M | $4.4M | $5.9M | $7.1M |
| A/R Days Reduction | $1.8M | $2.7M | $3.6M | $4.4M |
| Clean Claim Rate | $96K | $144K | $192K | $230K |
| Total | $7.9M | $11.8M | $15.7M | $18.9M |
Peer Context — Where This Hospital Sits
Key metrics vs 17 size-matched peers. Low percentile on margin/efficiency metrics = more room for improvement = larger bridge opportunity.
| Metric | Hospital | P25 | P50 | P75 | Percentile |
|---|---|---|---|---|---|
| Op Margin | 47.4% | 7.1% | 17.6% | 30.3% | P94 |
| Net-to-Gross | 21.7% | 31.3% | 37.9% | 41.7% | P6 |
| Occupancy | 54.3% | 39.7% | 56.3% | 64.7% | P41 |
| Rev/Bed | $1.7M | $1.3M | $1.9M | $2.5M | P44 |
| Exp/Bed | $905K | $823K | $1.1M | $1.9M | P35 |
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.