Bridge Realization Estimate
ML model predicts what fraction of the bridge is achievable (accuracy: 60%, n=5,839)
Expected realization: 64% of modeled bridge. Strengths: Net-to-Gross Ratio. Risks: Occupancy Rate, Revenue per Bed. Risk-adjusted uplift: $2.0M (vs $3.1M 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 | $1.2M | $1.2M | $0 | 12mo |
| Denial Rate Reduction | 12.0% DEFAULT | 6.5% BENCHMARK | $1.1M | $33K | $1.2M | $0 | 12mo |
| A/R Days Reduction | 52.00 DEFAULT | 38.00 BENCHMARK | $181K | $538K | $719K | $2.3M | 9mo |
| Clean Claim Rate | 88.0% DEFAULT | 96.0% BENCHMARK | $0 | $38K | $38K | $0 | 6mo |
| Net Collection Rate | 93.5% DEFAULT | 63.6% 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 | $296K | $591K | $887K | $1.2M | $1.2M | $1.2M | $1.2M |
| Denial Rate Reduction | $0 | $293K | $585K | $878K | $1.2M | $1.2M | $1.2M | $1.2M |
| A/R Days Reduction | $0 | $240K | $480K | $719K | $719K | $719K | $719K | $719K |
| Clean Claim Rate | $0 | $19K | $38K | $38K | $38K | $38K | $38K | $38K |
| Cumulative | $0 | $847K | $1.7M | $2.5M | $3.1M | $3.1M | $3.1M | $3.1M |
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 $3.1M is added at exit.
| Entry \ Exit | 9.0x | 10.0x | 11.0x | 11.5x | 12.0x |
|---|---|---|---|---|---|
| 8.0x | 97% / 30.0x | 102% / 33.7x | 106% / 37.4x | 108% / 39.3x | 110% / 41.1x |
| 9.0x | 92% / 26.3x | 97% / 29.6x | 101% / 32.9x | 103% / 34.5x | 105% / 36.2x |
| 10.0x | 88% / 23.4x | 92% / 26.3x | 96% / 29.3x | 98% / 30.8x | 100% / 32.2x |
| 11.0x | 84% / 20.9x | 88% / 23.6x | 92% / 26.3x | 94% / 27.7x | 96% / 29.0x |
| 12.0x | 80% / 18.9x | 85% / 21.4x | 89% / 23.9x | 90% / 25.1x | 92% / 26.3x |
Covenant Headroom (at 10x Entry, 6.5x Max Leverage)
Pro forma EBITDA can decline 70% before the 6.5x covenant trips. RCM uplift reduces leverage from 8.5x to 1.9x, adding 6.5 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 | $918K | — | $918K | 1.6% |
| Year 1 | $945K | +$2.1M | $3.0M | 5.1% |
| Year 2 | $973K | +$3.1M | $4.1M | 6.9% |
| Year 3 | $1.0M | +$3.1M | $4.1M | 7.0% |
| Year 4 | $1.0M | +$3.1M | $4.1M | 7.0% |
| Year 5 | $1.1M | +$3.1M | $4.2M | 7.1% |
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 | $591K | $887K | $1.2M | $1.4M |
| Denial Rate Reductio | $585K | $878K | $1.2M | $1.4M |
| A/R Days Reduction | $360K | $540K | $719K | $863K |
| Clean Claim Rate | $19K | $28K | $38K | $45K |
| Total | $1.6M | $2.3M | $3.1M | $3.7M |
Peer Context — Where This Hospital Sits
Key metrics vs 30 size-matched peers. Low percentile on margin/efficiency metrics = more room for improvement = larger bridge opportunity.
| Metric | Hospital | P25 | P50 | P75 | Percentile |
|---|---|---|---|---|---|
| Op Margin | 1.6% | -15.9% | -3.8% | 11.4% | P59 |
| Net-to-Gross | 6.5% | 10.9% | 26.7% | 63.6% | P0 |
| Occupancy | 38.1% | 29.1% | 56.8% | 77.7% | P30 |
| Rev/Bed | $597K | $435K | $578K | $1.0M | P55 |
| Exp/Bed | $588K | $380K | $594K | $1.1M | P47 |
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.