Bridge Realization Estimate
ML model predicts what fraction of the bridge is achievable (accuracy: 60%, n=5,839)
Expected realization: 75% of modeled bridge. Strengths: Occupancy Rate, Revenue per Bed. Risks: Bed Count. Risk-adjusted uplift: $67.2M (vs $89.6M 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 | $34.0M | $34.0M | $0 | 12mo |
| Denial Rate Reduction | 12.0% DEFAULT | 6.5% BENCHMARK | $32.8M | $936K | $33.7M | $0 | 12mo |
| A/R Days Reduction | 52.00 DEFAULT | 38.00 BENCHMARK | $5.2M | $15.5M | $20.7M | $65.3M | 9mo |
| Clean Claim Rate | 88.0% DEFAULT | 96.0% BENCHMARK | $0 | $1.1M | $1.1M | $0 | 6mo |
| Net Collection Rate | 93.5% DEFAULT | 34.8% 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 | $8.5M | $17.0M | $25.5M | $34.0M | $34.0M | $34.0M | $34.0M |
| Denial Rate Reduction | $0 | $8.4M | $16.9M | $25.3M | $33.7M | $33.7M | $33.7M | $33.7M |
| A/R Days Reduction | $0 | $6.9M | $13.8M | $20.7M | $20.7M | $20.7M | $20.7M | $20.7M |
| Clean Claim Rate | $0 | $545K | $1.1M | $1.1M | $1.1M | $1.1M | $1.1M | $1.1M |
| Cumulative | $0 | $24.4M | $48.8M | $72.6M | $89.6M | $89.6M | $89.6M | $89.6M |
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 $89.6M is added at exit.
| Entry \ Exit | 9.0x | 10.0x | 11.0x | 11.5x | 12.0x |
|---|---|---|---|---|---|
| 8.0x | 64% / 12.0x | 69% / 13.7x | 73% / 15.3x | 75% / 16.2x | 76% / 17.0x |
| 9.0x | 59% / 10.3x | 64% / 11.8x | 68% / 13.3x | 70% / 14.0x | 71% / 14.8x |
| 10.0x | 55% / 8.9x | 59% / 10.3x | 63% / 11.6x | 65% / 12.3x | 67% / 13.0x |
| 11.0x | 51% / 7.8x | 55% / 9.1x | 59% / 10.3x | 61% / 10.9x | 63% / 11.5x |
| 12.0x | 47% / 6.9x | 52% / 8.0x | 56% / 9.2x | 58% / 9.7x | 59% / 10.3x |
Covenant Headroom (at 10x Entry, 6.5x Max Leverage)
Pro forma EBITDA can decline 32% before the 6.5x covenant trips. RCM uplift reduces leverage from 8.5x to 4.4x, adding 4.1 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 | $97.2M | — | $97.2M | 5.7% |
| Year 1 | $100.1M | +$59.7M | $159.8M | 9.4% |
| Year 2 | $103.1M | +$89.6M | $192.6M | 11.3% |
| Year 3 | $106.2M | +$89.6M | $195.7M | 11.5% |
| Year 4 | $109.3M | +$89.6M | $198.9M | 11.7% |
| Year 5 | $112.6M | +$89.6M | $202.2M | 11.9% |
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 | $17.0M | $25.5M | $34.0M | $40.9M |
| Denial Rate Reductio | $16.9M | $25.3M | $33.7M | $40.5M |
| A/R Days Reduction | $10.4M | $15.5M | $20.7M | $24.9M |
| Clean Claim Rate | $545K | $817K | $1.1M | $1.3M |
| Total | $44.8M | $67.2M | $89.6M | $107.5M |
Peer Context — Where This Hospital Sits
Key metrics vs 27 size-matched peers. Low percentile on margin/efficiency metrics = more room for improvement = larger bridge opportunity.
| Metric | Hospital | P25 | P50 | P75 | Percentile |
|---|---|---|---|---|---|
| Op Margin | 5.7% | -15.0% | -11.3% | -5.1% | P96 |
| Net-to-Gross | 50.7% | 25.5% | 29.2% | 34.8% | P93 |
| Occupancy | 78.3% | 73.4% | 77.3% | 92.0% | P56 |
| Rev/Bed | $4.9M | $1.7M | $2.4M | $2.9M | P93 |
| Exp/Bed | $4.6M | $2.0M | $2.7M | $3.1M | P93 |
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.