Bridge Realization Estimate
ML model predicts what fraction of the bridge is achievable (accuracy: 60%, n=5,839)
Expected realization: 70% of modeled bridge. Strengths: Occupancy Rate, Payer Diversity. Risks: Net-to-Gross Ratio, Commercial Payer %. Risk-adjusted uplift: $2.8M (vs $4.0M 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 | $1.5M | $1.5M | $0 | 12mo |
| Denial Rate Reduction | 12.0% DEFAULT | 6.5% BENCHMARK | $1.5M | $42K | $1.5M | $0 | 12mo |
| A/R Days Reduction | 52.00 DEFAULT | 38.00 BENCHMARK | $234K | $695K | $929K | $2.9M | 9mo |
| Clean Claim Rate | 88.0% DEFAULT | 96.0% BENCHMARK | $0 | $49K | $49K | $0 | 6mo |
| Net Collection Rate | 93.5% DEFAULT | 62.1% 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 | $382K | $764K | $1.1M | $1.5M | $1.5M | $1.5M | $1.5M |
| Denial Rate Reduction | $0 | $378K | $756K | $1.1M | $1.5M | $1.5M | $1.5M | $1.5M |
| A/R Days Reduction | $0 | $310K | $620K | $929K | $929K | $929K | $929K | $929K |
| Clean Claim Rate | $0 | $24K | $49K | $49K | $49K | $49K | $49K | $49K |
| Cumulative | $0 | $1.1M | $2.2M | $3.3M | $4.0M | $4.0M | $4.0M | $4.0M |
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 $4.0M is added at exit.
| Entry \ Exit | 9.0x | 10.0x | 11.0x | 11.5x | 12.0x |
|---|---|---|---|---|---|
| 8.0x | 46% / 6.5x | 50% / 7.6x | 54% / 8.7x | 56% / 9.2x | 58% / 9.8x |
| 9.0x | 40% / 5.5x | 45% / 6.4x | 49% / 7.4x | 51% / 7.9x | 53% / 8.3x |
| 10.0x | 36% / 4.6x | 40% / 5.5x | 45% / 6.3x | 47% / 6.8x | 48% / 7.2x |
| 11.0x | 31% / 3.9x | 36% / 4.7x | 40% / 5.5x | 42% / 5.8x | 44% / 6.2x |
| 12.0x | 27% / 3.3x | 32% / 4.0x | 36% / 4.7x | 38% / 5.1x | 40% / 5.5x |
Covenant Headroom (at 10x Entry, 6.5x Max Leverage)
Pro forma EBITDA can decline -10% before the 6.5x covenant trips. RCM uplift reduces leverage from 8.5x to 7.2x, adding 1.3 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 | $22.5M | — | $22.5M | 29.5% |
| Year 1 | $23.2M | +$2.7M | $25.9M | 33.9% |
| Year 2 | $23.9M | +$4.0M | $27.9M | 36.6% |
| Year 3 | $24.6M | +$4.0M | $28.6M | 37.5% |
| Year 4 | $25.4M | +$4.0M | $29.4M | 38.5% |
| Year 5 | $26.1M | +$4.0M | $30.1M | 39.5% |
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 | $764K | $1.1M | $1.5M | $1.8M |
| Denial Rate Reductio | $756K | $1.1M | $1.5M | $1.8M |
| A/R Days Reduction | $465K | $697K | $929K | $1.1M |
| Clean Claim Rate | $24K | $37K | $49K | $59K |
| Total | $2.0M | $3.0M | $4.0M | $4.8M |
Peer Context — Where This Hospital Sits
Key metrics vs 33 size-matched peers. Low percentile on margin/efficiency metrics = more room for improvement = larger bridge opportunity.
| Metric | Hospital | P25 | P50 | P75 | Percentile |
|---|---|---|---|---|---|
| Op Margin | 29.5% | -16.0% | -4.3% | 12.1% | P88 |
| Net-to-Gross | 100.0% | 16.6% | 26.6% | 62.0% | P94 |
| Occupancy | 77.2% | 27.2% | 54.6% | 77.8% | P70 |
| Rev/Bed | $779K | $421K | $576K | $992K | P66 |
| Exp/Bed | $549K | $381K | $588K | $1.0M | P45 |
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.