Bridge Realization Estimate
ML model predicts what fraction of the bridge is achievable (accuracy: 60%, n=5,839)
Expected realization: 69% of modeled bridge. Strengths: Occupancy Rate. Risks: Bed Count. Risk-adjusted uplift: $12.8M (vs $18.6M 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 | $7.1M | $7.1M | $0 | 12mo |
| Denial Rate Reduction | 12.0% DEFAULT | 6.5% BENCHMARK | $6.8M | $194K | $7.0M | $0 | 12mo |
| A/R Days Reduction | 52.00 DEFAULT | 38.00 BENCHMARK | $1.1M | $3.2M | $4.3M | $13.6M | 9mo |
| Clean Claim Rate | 88.0% DEFAULT | 96.0% BENCHMARK | $0 | $226K | $226K | $0 | 6mo |
| Net Collection Rate | 93.5% DEFAULT | 29.3% 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 | $1.8M | $3.5M | $5.3M | $7.1M | $7.1M | $7.1M | $7.1M |
| Denial Rate Reduction | $0 | $1.7M | $3.5M | $5.2M | $7.0M | $7.0M | $7.0M | $7.0M |
| A/R Days Reduction | $0 | $1.4M | $2.9M | $4.3M | $4.3M | $4.3M | $4.3M | $4.3M |
| Clean Claim Rate | $0 | $113K | $226K | $226K | $226K | $226K | $226K | $226K |
| Cumulative | $0 | $5.1M | $10.1M | $15.1M | $18.6M | $18.6M | $18.6M | $18.6M |
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 $18.6M is added at exit.
| Entry \ Exit | 9.0x | 10.0x | 11.0x | 11.5x | 12.0x |
|---|---|---|---|---|---|
| 8.0x | 209% / 280.9x | 215% / 312.5x | 222% / 344.0x | 224% / 359.8x | 227% / 375.6x |
| 9.0x | 202% / 249.3x | 208% / 277.4x | 214% / 305.4x | 217% / 319.5x | 220% / 333.5x |
| 10.0x | 195% / 224.1x | 202% / 249.3x | 207% / 274.6x | 210% / 287.2x | 213% / 299.8x |
| 11.0x | 190% / 203.4x | 196% / 226.4x | 202% / 249.3x | 204% / 260.8x | 207% / 272.3x |
| 12.0x | 184% / 186.2x | 191% / 207.2x | 196% / 228.3x | 199% / 238.8x | 202% / 249.3x |
Covenant Headroom (at 10x Entry, 6.5x Max Leverage)
Pro forma EBITDA can decline 97% before the 6.5x covenant trips. RCM uplift reduces leverage from 8.5x to 0.2x, adding 8.2 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 | $493K | — | $493K | 0.1% |
| Year 1 | $508K | +$12.4M | $12.9M | 3.7% |
| Year 2 | $523K | +$18.6M | $19.1M | 5.4% |
| Year 3 | $539K | +$18.6M | $19.1M | 5.4% |
| Year 4 | $555K | +$18.6M | $19.2M | 5.4% |
| Year 5 | $572K | +$18.6M | $19.2M | 5.4% |
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 | $3.5M | $5.3M | $7.1M | $8.5M |
| Denial Rate Reductio | $3.5M | $5.2M | $7.0M | $8.4M |
| A/R Days Reduction | $2.2M | $3.2M | $4.3M | $5.2M |
| Clean Claim Rate | $113K | $170K | $226K | $271K |
| Total | $9.3M | $13.9M | $18.6M | $22.3M |
Peer Context — Where This Hospital Sits
Key metrics vs 32 size-matched peers. Low percentile on margin/efficiency metrics = more room for improvement = larger bridge opportunity.
| Metric | Hospital | P25 | P50 | P75 | Percentile |
|---|---|---|---|---|---|
| Op Margin | 0.1% | -4.2% | -0.8% | 6.3% | P52 |
| Net-to-Gross | 20.7% | 16.2% | 20.7% | 29.3% | P48 |
| Occupancy | 65.5% | 59.2% | 66.5% | 78.7% | P41 |
| Rev/Bed | $1.1M | $1.3M | $1.6M | $2.0M | P19 |
| Exp/Bed | $1.1M | $1.1M | $1.4M | $2.0M | P25 |
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.