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: Occupancy Rate. Risks: Bed Count, Revenue per Bed. Risk-adjusted uplift: $18.3M (vs $28.5M 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 | $10.8M | $10.8M | $0 | 12mo |
| Denial Rate Reduction | 12.0% DEFAULT | 6.5% BENCHMARK | $10.4M | $298K | $10.7M | $0 | 12mo |
| A/R Days Reduction | 52.00 DEFAULT | 38.00 BENCHMARK | $1.7M | $4.9M | $6.6M | $20.8M | 9mo |
| Clean Claim Rate | 88.0% DEFAULT | 96.0% BENCHMARK | $0 | $347K | $347K | $0 | 6mo |
| Net Collection Rate | 93.5% DEFAULT | 33.0% 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 | $2.7M | $5.4M | $8.1M | $10.8M | $10.8M | $10.8M | $10.8M |
| Denial Rate Reduction | $0 | $2.7M | $5.4M | $8.1M | $10.7M | $10.7M | $10.7M | $10.7M |
| A/R Days Reduction | $0 | $2.2M | $4.4M | $6.6M | $6.6M | $6.6M | $6.6M | $6.6M |
| Clean Claim Rate | $0 | $174K | $347K | $347K | $347K | $347K | $347K | $347K |
| Cumulative | $0 | $7.8M | $15.5M | $23.1M | $28.5M | $28.5M | $28.5M | $28.5M |
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 $28.5M is added at exit.
| Entry \ Exit | 9.0x | 10.0x | 11.0x | 11.5x | 12.0x |
|---|---|---|---|---|---|
| 8.0x | 78% / 17.6x | 82% / 20.0x | 86% / 22.3x | 88% / 23.4x | 90% / 24.6x |
| 9.0x | 73% / 15.3x | 77% / 17.4x | 81% / 19.4x | 83% / 20.5x | 85% / 21.5x |
| 10.0x | 68% / 13.5x | 73% / 15.3x | 77% / 17.2x | 78% / 18.1x | 80% / 19.0x |
| 11.0x | 64% / 11.9x | 69% / 13.6x | 73% / 15.3x | 74% / 16.2x | 76% / 17.0x |
| 12.0x | 61% / 10.7x | 65% / 12.2x | 69% / 13.8x | 71% / 14.5x | 73% / 15.3x |
Covenant Headroom (at 10x Entry, 6.5x Max Leverage)
Pro forma EBITDA can decline 52% before the 6.5x covenant trips. RCM uplift reduces leverage from 8.5x to 3.1x, adding 5.3 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 | $16.8M | — | $16.8M | 3.1% |
| Year 1 | $17.3M | +$19.0M | $36.3M | 6.7% |
| Year 2 | $17.8M | +$28.5M | $46.4M | 8.6% |
| Year 3 | $18.4M | +$28.5M | $46.9M | 8.6% |
| Year 4 | $18.9M | +$28.5M | $47.4M | 8.8% |
| Year 5 | $19.5M | +$28.5M | $48.0M | 8.9% |
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 | $5.4M | $8.1M | $10.8M | $13.0M |
| Denial Rate Reductio | $5.4M | $8.1M | $10.7M | $12.9M |
| A/R Days Reduction | $3.3M | $4.9M | $6.6M | $7.9M |
| Clean Claim Rate | $174K | $260K | $347K | $416K |
| Total | $14.3M | $21.4M | $28.5M | $34.2M |
Peer Context — Where This Hospital Sits
Key metrics vs 13 size-matched peers. Low percentile on margin/efficiency metrics = more room for improvement = larger bridge opportunity.
| Metric | Hospital | P25 | P50 | P75 | Percentile |
|---|---|---|---|---|---|
| Op Margin | 3.1% | -6.9% | -5.0% | -3.2% | P77 |
| Net-to-Gross | 35.8% | 20.7% | 25.4% | 33.0% | P77 |
| Occupancy | 61.3% | 61.3% | 74.5% | 82.9% | P23 |
| Rev/Bed | $914K | $914K | $1.3M | $1.6M | P23 |
| Exp/Bed | $886K | $886K | $1.3M | $1.8M | P23 |
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.