Bridge Realization Estimate
ML model predicts what fraction of the bridge is achievable (accuracy: 60%, n=5,839)
Expected realization: 71% of modeled bridge. Strengths: Occupancy Rate. Risks: Revenue per Bed. Risk-adjusted uplift: $3.3M (vs $4.7M 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 | $1.8M | $1.8M | $0 | 12mo |
| Denial Rate Reduction | 12.0% DEFAULT | 6.5% BENCHMARK | $1.7M | $49K | $1.8M | $0 | 12mo |
| A/R Days Reduction | 52.00 DEFAULT | 38.00 BENCHMARK | $273K | $810K | $1.1M | $3.4M | 9mo |
| Clean Claim Rate | 88.0% DEFAULT | 96.0% BENCHMARK | $0 | $57K | $57K | $0 | 6mo |
| Net Collection Rate | 93.5% DEFAULT | 38.5% 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 | $445K | $891K | $1.3M | $1.8M | $1.8M | $1.8M | $1.8M |
| Denial Rate Reduction | $0 | $441K | $882K | $1.3M | $1.8M | $1.8M | $1.8M | $1.8M |
| A/R Days Reduction | $0 | $361K | $723K | $1.1M | $1.1M | $1.1M | $1.1M | $1.1M |
| Clean Claim Rate | $0 | $28K | $57K | $57K | $57K | $57K | $57K | $57K |
| Cumulative | $0 | $1.3M | $2.6M | $3.8M | $4.7M | $4.7M | $4.7M | $4.7M |
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 $4.7M is added at exit.
| Entry \ Exit | 9.0x | 10.0x | 11.0x | 11.5x | 12.0x |
|---|---|---|---|---|---|
| 8.0x | 51% / 7.7x | 55% / 9.0x | 59% / 10.2x | 61% / 10.8x | 63% / 11.4x |
| 9.0x | 45% / 6.5x | 50% / 7.6x | 54% / 8.7x | 56% / 9.2x | 58% / 9.8x |
| 10.0x | 41% / 5.5x | 45% / 6.5x | 50% / 7.5x | 52% / 8.0x | 53% / 8.5x |
| 11.0x | 37% / 4.7x | 41% / 5.6x | 45% / 6.5x | 47% / 7.0x | 49% / 7.4x |
| 12.0x | 32% / 4.1x | 37% / 4.9x | 42% / 5.7x | 44% / 6.1x | 45% / 6.5x |
Covenant Headroom (at 10x Entry, 6.5x Max Leverage)
Pro forma EBITDA can decline 3% before the 6.5x covenant trips. RCM uplift reduces leverage from 8.5x to 6.3x, adding 2.2 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 | $13.7M | — | $13.7M | 15.3% |
| Year 1 | $14.1M | +$3.1M | $17.2M | 19.3% |
| Year 2 | $14.5M | +$4.7M | $19.2M | 21.5% |
| Year 3 | $14.9M | +$4.7M | $19.6M | 22.0% |
| Year 4 | $15.4M | +$4.7M | $20.1M | 22.5% |
| Year 5 | $15.8M | +$4.7M | $20.5M | 23.0% |
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 | $891K | $1.3M | $1.8M | $2.1M |
| Denial Rate Reductio | $882K | $1.3M | $1.8M | $2.1M |
| A/R Days Reduction | $542K | $813K | $1.1M | $1.3M |
| Clean Claim Rate | $28K | $43K | $57K | $68K |
| Total | $2.3M | $3.5M | $4.7M | $5.6M |
Peer Context — Where This Hospital Sits
Key metrics vs 45 size-matched peers. Low percentile on margin/efficiency metrics = more room for improvement = larger bridge opportunity.
| Metric | Hospital | P25 | P50 | P75 | Percentile |
|---|---|---|---|---|---|
| Op Margin | 15.3% | -7.1% | 0.1% | 14.2% | P74 |
| Net-to-Gross | 36.9% | 17.2% | 26.1% | 38.5% | P72 |
| Occupancy | 77.0% | 54.7% | 65.7% | 78.0% | P71 |
| Rev/Bed | $530K | $332K | $1.3M | $1.9M | P28 |
| Exp/Bed | $449K | $338K | $1.1M | $1.8M | P29 |
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.