Bridge Realization Estimate
ML model predicts what fraction of the bridge is achievable (accuracy: 60%, n=5,839)
Expected realization: 67% of modeled bridge. Strengths: Occupancy Rate, Net-to-Gross Ratio. Risks: Bed Count, Revenue per Bed. Risk-adjusted uplift: $7.7M (vs $11.4M 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 | $4.3M | $4.3M | $0 | 12mo |
| Denial Rate Reduction | 12.0% DEFAULT | 6.5% BENCHMARK | $4.2M | $119K | $4.3M | $0 | 12mo |
| A/R Days Reduction | 52.00 DEFAULT | 38.00 BENCHMARK | $664K | $2.0M | $2.6M | $8.3M | 9mo |
| Clean Claim Rate | 88.0% DEFAULT | 96.0% BENCHMARK | $0 | $138K | $138K | $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 | $1.1M | $2.2M | $3.2M | $4.3M | $4.3M | $4.3M | $4.3M |
| Denial Rate Reduction | $0 | $1.1M | $2.1M | $3.2M | $4.3M | $4.3M | $4.3M | $4.3M |
| A/R Days Reduction | $0 | $877K | $1.8M | $2.6M | $2.6M | $2.6M | $2.6M | $2.6M |
| Clean Claim Rate | $0 | $69K | $138K | $138K | $138K | $138K | $138K | $138K |
| Cumulative | $0 | $3.1M | $6.2M | $9.2M | $11.4M | $11.4M | $11.4M | $11.4M |
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 $11.4M is added at exit.
| Entry \ Exit | 9.0x | 10.0x | 11.0x | 11.5x | 12.0x |
|---|---|---|---|---|---|
| 8.0x | 86% / 22.0x | 90% / 24.8x | 94% / 27.6x | 96% / 29.0x | 98% / 30.4x |
| 9.0x | 81% / 19.2x | 85% / 21.7x | 89% / 24.2x | 91% / 25.4x | 93% / 26.7x |
| 10.0x | 76% / 16.9x | 81% / 19.2x | 85% / 21.4x | 86% / 22.6x | 88% / 23.7x |
| 11.0x | 72% / 15.1x | 77% / 17.1x | 81% / 19.2x | 82% / 20.2x | 84% / 21.2x |
| 12.0x | 68% / 13.6x | 73% / 15.4x | 77% / 17.3x | 79% / 18.2x | 81% / 19.2x |
Covenant Headroom (at 10x Entry, 6.5x Max Leverage)
Pro forma EBITDA can decline 60% before the 6.5x covenant trips. RCM uplift reduces leverage from 8.5x to 2.6x, adding 5.9 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 | $5.0M | — | $5.0M | 2.3% |
| Year 1 | $5.1M | +$7.6M | $12.7M | 5.9% |
| Year 2 | $5.3M | +$11.4M | $16.6M | 7.7% |
| Year 3 | $5.4M | +$11.4M | $16.8M | 7.8% |
| Year 4 | $5.6M | +$11.4M | $17.0M | 7.8% |
| Year 5 | $5.8M | +$11.4M | $17.1M | 7.9% |
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 | $2.2M | $3.2M | $4.3M | $5.2M |
| Denial Rate Reductio | $2.1M | $3.2M | $4.3M | $5.1M |
| A/R Days Reduction | $1.3M | $2.0M | $2.6M | $3.2M |
| Clean Claim Rate | $69K | $104K | $138K | $166K |
| Total | $5.7M | $8.5M | $11.4M | $13.7M |
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 | 2.3% | -9.1% | -4.6% | 1.9% | P77 |
| Net-to-Gross | 10.4% | 10.6% | 21.3% | 31.1% | P23 |
| Occupancy | 58.6% | 53.2% | 66.3% | 77.9% | P33 |
| Rev/Bed | $829K | $723K | $1.1M | $1.3M | P37 |
| Exp/Bed | $810K | $781K | $1.1M | $1.3M | P33 |
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.