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: Occupancy Rate, Revenue per Bed. Risks: Bed Count, Commercial Payer %. Risk-adjusted uplift: $113.1M (vs $166.4M 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 |
|---|---|---|---|---|---|---|---|
| Net Collection Rate | 93.5% DEFAULT | 97.0% BENCHMARK | $47.5M | $0 | $47.5M | $0 | 18mo |
| Cost to Collect | 4.5% DEFAULT | 2.5% BENCHMARK | $0 | $45.2M | $45.2M | $0 | 12mo |
| Denial Rate Reduction | 12.0% DEFAULT | 6.5% BENCHMARK | $43.5M | $1.2M | $44.8M | $0 | 12mo |
| A/R Days Reduction | 52.00 DEFAULT | 38.00 BENCHMARK | $6.9M | $20.6M | $27.5M | $86.7M | 9mo |
| Clean Claim Rate | 88.0% DEFAULT | 96.0% BENCHMARK | $0 | $1.4M | $1.4M | $0 | 6mo |
| 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 |
|---|---|---|---|---|---|---|---|---|
| Net Collection Rate | $0 | $7.9M | $15.8M | $23.7M | $31.7M | $47.5M | $47.5M | $47.5M |
| Cost to Collect | $0 | $11.3M | $22.6M | $33.9M | $45.2M | $45.2M | $45.2M | $45.2M |
| Denial Rate Reduction | $0 | $11.2M | $22.4M | $33.6M | $44.8M | $44.8M | $44.8M | $44.8M |
| A/R Days Reduction | $0 | $9.2M | $18.3M | $27.5M | $27.5M | $27.5M | $27.5M | $27.5M |
| Clean Claim Rate | $0 | $724K | $1.4M | $1.4M | $1.4M | $1.4M | $1.4M | $1.4M |
| Cumulative | $0 | $40.3M | $80.6M | $120.2M | $150.6M | $166.4M | $166.4M | $166.4M |
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 $166.4M is added at exit.
| Entry \ Exit | 9.0x | 10.0x | 11.0x | 11.5x | 12.0x |
|---|---|---|---|---|---|
| 8.0x | 190% / 204.6x | 196% / 227.7x | 202% / 250.8x | 205% / 262.3x | 207% / 273.8x |
| 9.0x | 183% / 181.5x | 189% / 202.0x | 195% / 222.5x | 197% / 232.8x | 200% / 243.1x |
| 10.0x | 177% / 163.0x | 183% / 181.5x | 189% / 199.9x | 191% / 209.2x | 194% / 218.4x |
| 11.0x | 172% / 147.9x | 178% / 164.7x | 183% / 181.5x | 186% / 189.9x | 188% / 198.3x |
| 12.0x | 167% / 135.3x | 173% / 150.7x | 178% / 166.1x | 181% / 173.8x | 183% / 181.5x |
Covenant Headroom (at 10x Entry, 6.5x Max Leverage)
Pro forma EBITDA can decline 95% before the 6.5x covenant trips. RCM uplift reduces leverage from 8.5x to 0.3x, adding 8.2 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 | $6.1M | — | $6.1M | 0.3% |
| Year 1 | $6.3M | +$111.0M | $117.3M | 5.2% |
| Year 2 | $6.5M | +$166.4M | $172.9M | 7.6% |
| Year 3 | $6.7M | +$166.4M | $173.1M | 7.7% |
| Year 4 | $6.9M | +$166.4M | $173.3M | 7.7% |
| Year 5 | $7.1M | +$166.4M | $173.5M | 7.7% |
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% |
|---|---|---|---|---|
| Net Collection Rate | $23.7M | $35.6M | $47.5M | $57.0M |
| Cost to Collect | $22.6M | $33.9M | $45.2M | $54.3M |
| Denial Rate Reductio | $22.4M | $33.6M | $44.8M | $53.7M |
| A/R Days Reduction | $13.8M | $20.6M | $27.5M | $33.0M |
| Clean Claim Rate | $724K | $1.1M | $1.4M | $1.7M |
| Total | $83.2M | $124.8M | $166.4M | $199.7M |
Peer Context — Where This Hospital Sits
Key metrics vs 10 size-matched peers. Low percentile on margin/efficiency metrics = more room for improvement = larger bridge opportunity.
| Metric | Hospital | P25 | P50 | P75 | Percentile |
|---|---|---|---|---|---|
| Op Margin | 0.3% | 0.3% | 1.7% | 18.9% | P22 |
| Net-to-Gross | 27.8% | 27.8% | 31.6% | 37.1% | P22 |
| Occupancy | 78.3% | 71.1% | 74.5% | 77.8% | P70 |
| Rev/Bed | $2.7M | $1.5M | $2.3M | $2.8M | P56 |
| Exp/Bed | $2.7M | $1.3M | $2.0M | $2.6M | P70 |
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.