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, Revenue per Bed. Risks: Bed Count. Risk-adjusted uplift: $26.4M (vs $34.4M 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 |
|---|---|---|---|---|---|---|---|
| Cost to Collect | 4.5% DEFAULT | 2.5% BENCHMARK | $0 | $13.1M | $13.1M | $0 | 12mo |
| Denial Rate Reduction | 12.0% DEFAULT | 6.5% BENCHMARK | $12.6M | $359K | $12.9M | $0 | 12mo |
| A/R Days Reduction | 52.00 DEFAULT | 38.00 BENCHMARK | $2.0M | $5.9M | $8.0M | $25.1M | 9mo |
| Clean Claim Rate | 88.0% DEFAULT | 96.0% BENCHMARK | $0 | $418K | $418K | $0 | 6mo |
| Net Collection Rate | 93.5% DEFAULT | 34.3% 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 | $3.3M | $6.5M | $9.8M | $13.1M | $13.1M | $13.1M | $13.1M |
| Denial Rate Reduction | $0 | $3.2M | $6.5M | $9.7M | $12.9M | $12.9M | $12.9M | $12.9M |
| A/R Days Reduction | $0 | $2.7M | $5.3M | $8.0M | $8.0M | $8.0M | $8.0M | $8.0M |
| Clean Claim Rate | $0 | $209K | $418K | $418K | $418K | $418K | $418K | $418K |
| Cumulative | $0 | $9.4M | $18.7M | $27.9M | $34.4M | $34.4M | $34.4M | $34.4M |
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 $34.4M is added at exit.
| Entry \ Exit | 9.0x | 10.0x | 11.0x | 11.5x | 12.0x |
|---|---|---|---|---|---|
| 8.0x | 87% / 22.6x | 91% / 25.4x | 95% / 28.3x | 97% / 29.7x | 99% / 31.2x |
| 9.0x | 82% / 19.7x | 86% / 22.2x | 90% / 24.8x | 92% / 26.1x | 94% / 27.4x |
| 10.0x | 77% / 17.4x | 82% / 19.7x | 86% / 22.0x | 87% / 23.1x | 89% / 24.3x |
| 11.0x | 73% / 15.5x | 77% / 17.6x | 82% / 19.7x | 83% / 20.7x | 85% / 21.8x |
| 12.0x | 69% / 14.0x | 74% / 15.9x | 78% / 17.8x | 80% / 18.7x | 82% / 19.7x |
Covenant Headroom (at 10x Entry, 6.5x Max Leverage)
Pro forma EBITDA can decline 61% before the 6.5x covenant trips. RCM uplift reduces leverage from 8.5x to 2.5x, adding 6.0 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 | $14.5M | — | $14.5M | 2.2% |
| Year 1 | $14.9M | +$22.9M | $37.8M | 5.8% |
| Year 2 | $15.4M | +$34.4M | $49.8M | 7.6% |
| Year 3 | $15.8M | +$34.4M | $50.2M | 7.7% |
| Year 4 | $16.3M | +$34.4M | $50.7M | 7.8% |
| Year 5 | $16.8M | +$34.4M | $51.2M | 7.8% |
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 | $6.5M | $9.8M | $13.1M | $15.7M |
| Denial Rate Reductio | $6.5M | $9.7M | $12.9M | $15.5M |
| A/R Days Reduction | $4.0M | $6.0M | $8.0M | $9.5M |
| Clean Claim Rate | $209K | $314K | $418K | $502K |
| Total | $17.2M | $25.8M | $34.4M | $41.2M |
Peer Context — Where This Hospital Sits
Key metrics vs 29 size-matched peers. Low percentile on margin/efficiency metrics = more room for improvement = larger bridge opportunity.
| Metric | Hospital | P25 | P50 | P75 | Percentile |
|---|---|---|---|---|---|
| Op Margin | 2.2% | -14.9% | -11.0% | -4.4% | P86 |
| Net-to-Gross | 19.8% | 24.7% | 29.0% | 34.3% | P7 |
| Occupancy | 90.3% | 70.5% | 75.6% | 90.3% | P72 |
| Rev/Bed | $2.7M | $1.6M | $2.4M | $2.7M | P69 |
| Exp/Bed | $2.7M | $1.7M | $2.7M | $3.1M | P48 |
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.