Bridge Realization Estimate
ML model predicts what fraction of the bridge is achievable (accuracy: 60%, n=5,839)
Expected realization: 73% of modeled bridge. Strengths: Occupancy Rate. Risks: Bed Count. Risk-adjusted uplift: $10.0M (vs $13.6M 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 | $5.2M | $5.2M | $0 | 12mo |
| Denial Rate Reduction | 12.0% DEFAULT | 6.5% BENCHMARK | $5.0M | $143K | $5.1M | $0 | 12mo |
| A/R Days Reduction | 52.00 DEFAULT | 38.00 BENCHMARK | $796K | $2.4M | $3.2M | $10.0M | 9mo |
| Clean Claim Rate | 88.0% DEFAULT | 96.0% BENCHMARK | $0 | $166K | $166K | $0 | 6mo |
| Net Collection Rate | 93.5% DEFAULT | 31.1% 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 | $1.3M | $2.6M | $3.9M | $5.2M | $5.2M | $5.2M | $5.2M |
| Denial Rate Reduction | $0 | $1.3M | $2.6M | $3.9M | $5.1M | $5.1M | $5.1M | $5.1M |
| A/R Days Reduction | $0 | $1.1M | $2.1M | $3.2M | $3.2M | $3.2M | $3.2M | $3.2M |
| Clean Claim Rate | $0 | $83K | $166K | $166K | $166K | $166K | $166K | $166K |
| Cumulative | $0 | $3.7M | $7.4M | $11.1M | $13.6M | $13.6M | $13.6M | $13.6M |
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 $13.6M is added at exit.
| Entry \ Exit | 9.0x | 10.0x | 11.0x | 11.5x | 12.0x |
|---|---|---|---|---|---|
| 8.0x | 139% / 78.8x | 145% / 87.9x | 150% / 97.0x | 152% / 101.5x | 154% / 106.1x |
| 9.0x | 134% / 69.7x | 139% / 77.7x | 144% / 85.8x | 146% / 89.9x | 148% / 93.9x |
| 10.0x | 129% / 62.4x | 134% / 69.7x | 138% / 76.9x | 141% / 80.6x | 143% / 84.2x |
| 11.0x | 124% / 56.4x | 129% / 63.0x | 134% / 69.7x | 136% / 73.0x | 138% / 76.3x |
| 12.0x | 120% / 51.4x | 125% / 57.5x | 129% / 63.6x | 132% / 66.6x | 134% / 69.7x |
Covenant Headroom (at 10x Entry, 6.5x Max Leverage)
Pro forma EBITDA can decline 88% before the 6.5x covenant trips. RCM uplift reduces leverage from 8.5x to 0.8x, adding 7.7 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 | $1.4M | — | $1.4M | 0.5% |
| Year 1 | $1.4M | +$9.1M | $10.5M | 4.0% |
| Year 2 | $1.4M | +$13.6M | $15.1M | 5.8% |
| Year 3 | $1.5M | +$13.6M | $15.1M | 5.8% |
| Year 4 | $1.5M | +$13.6M | $15.2M | 5.8% |
| Year 5 | $1.6M | +$13.6M | $15.2M | 5.9% |
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 | $2.6M | $3.9M | $5.2M | $6.2M |
| Denial Rate Reductio | $2.6M | $3.9M | $5.1M | $6.2M |
| A/R Days Reduction | $1.6M | $2.4M | $3.2M | $3.8M |
| Clean Claim Rate | $83K | $125K | $166K | $199K |
| Total | $6.8M | $10.2M | $13.6M | $16.4M |
Peer Context — Where This Hospital Sits
Key metrics vs 34 size-matched peers. Low percentile on margin/efficiency metrics = more room for improvement = larger bridge opportunity.
| Metric | Hospital | P25 | P50 | P75 | Percentile |
|---|---|---|---|---|---|
| Op Margin | 0.5% | -10.3% | -4.6% | 2.3% | P68 |
| Net-to-Gross | 20.2% | 10.2% | 21.3% | 31.1% | P44 |
| Occupancy | 82.6% | 49.9% | 64.6% | 77.7% | P88 |
| Rev/Bed | $1.2M | $708K | $984K | $1.3M | P56 |
| Exp/Bed | $1.2M | $749K | $984K | $1.3M | P59 |
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.