Bridge Realization Estimate
ML model predicts what fraction of the bridge is achievable (accuracy: 60%, n=5,839)
Expected realization: 73% of modeled bridge. Strengths: Occupancy Rate. Risk-adjusted uplift: $10.7M (vs $14.6M 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 | $5.6M | $5.6M | $0 | 12mo |
| Denial Rate Reduction | 12.0% DEFAULT | 6.5% BENCHMARK | $5.4M | $153K | $5.5M | $0 | 12mo |
| A/R Days Reduction | 52.00 DEFAULT | 38.00 BENCHMARK | $853K | $2.5M | $3.4M | $10.7M | 9mo |
| Clean Claim Rate | 88.0% DEFAULT | 96.0% BENCHMARK | $0 | $178K | $178K | $0 | 6mo |
| Net Collection Rate | 93.5% DEFAULT | 31.0% 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 | $1.4M | $2.8M | $4.2M | $5.6M | $5.6M | $5.6M | $5.6M |
| Denial Rate Reduction | $0 | $1.4M | $2.8M | $4.1M | $5.5M | $5.5M | $5.5M | $5.5M |
| A/R Days Reduction | $0 | $1.1M | $2.3M | $3.4M | $3.4M | $3.4M | $3.4M | $3.4M |
| Clean Claim Rate | $0 | $89K | $178K | $178K | $178K | $178K | $178K | $178K |
| Cumulative | $0 | $4.0M | $8.0M | $11.9M | $14.6M | $14.6M | $14.6M | $14.6M |
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 $14.6M is added at exit.
| Entry \ Exit | 9.0x | 10.0x | 11.0x | 11.5x | 12.0x |
|---|---|---|---|---|---|
| 8.0x | 204% / 260.1x | 211% / 289.4x | 217% / 318.6x | 220% / 333.2x | 222% / 347.9x |
| 9.0x | 197% / 230.8x | 203% / 256.8x | 209% / 282.9x | 212% / 295.9x | 215% / 308.9x |
| 10.0x | 191% / 207.4x | 197% / 230.8x | 203% / 254.2x | 205% / 265.9x | 208% / 277.6x |
| 11.0x | 185% / 188.3x | 191% / 209.6x | 197% / 230.8x | 200% / 241.5x | 202% / 252.1x |
| 12.0x | 180% / 172.3x | 186% / 191.8x | 192% / 211.3x | 194% / 221.1x | 197% / 230.8x |
Covenant Headroom (at 10x Entry, 6.5x Max Leverage)
Pro forma EBITDA can decline 96% 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 | $420K | — | $420K | 0.2% |
| Year 1 | $432K | +$9.7M | $10.2M | 3.7% |
| Year 2 | $445K | +$14.6M | $15.1M | 5.4% |
| Year 3 | $459K | +$14.6M | $15.1M | 5.4% |
| Year 4 | $472K | +$14.6M | $15.1M | 5.4% |
| Year 5 | $486K | +$14.6M | $15.1M | 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 | $2.8M | $4.2M | $5.6M | $6.7M |
| Denial Rate Reductio | $2.8M | $4.1M | $5.5M | $6.6M |
| A/R Days Reduction | $1.7M | $2.5M | $3.4M | $4.1M |
| Clean Claim Rate | $89K | $133K | $178K | $213K |
| Total | $7.3M | $11.0M | $14.6M | $17.5M |
Peer Context — Where This Hospital Sits
Key metrics vs 27 size-matched peers. Low percentile on margin/efficiency metrics = more room for improvement = larger bridge opportunity.
| Metric | Hospital | P25 | P50 | P75 | Percentile |
|---|---|---|---|---|---|
| Op Margin | 0.2% | -12.5% | 0.2% | 5.0% | P48 |
| Net-to-Gross | 24.6% | 21.3% | 24.5% | 31.0% | P52 |
| Occupancy | 81.7% | 44.9% | 54.4% | 69.8% | P89 |
| Rev/Bed | $1.4M | $723K | $943K | $1.4M | P70 |
| Exp/Bed | $1.4M | $802K | $1.0M | $1.4M | P70 |
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.