Bridge Realization Estimate
ML model predicts what fraction of the bridge is achievable (accuracy: 60%, n=5,839)
Expected realization: 66% of modeled bridge. Risks: Bed Count. Risk-adjusted uplift: $19.6M (vs $29.8M 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 | $11.3M | $11.3M | $0 | 12mo |
| Denial Rate Reduction | 12.0% DEFAULT | 6.5% BENCHMARK | $10.9M | $312K | $11.2M | $0 | 12mo |
| A/R Days Reduction | 52.00 DEFAULT | 38.00 BENCHMARK | $1.7M | $5.2M | $6.9M | $21.8M | 9mo |
| Clean Claim Rate | 88.0% DEFAULT | 96.0% BENCHMARK | $0 | $363K | $363K | $0 | 6mo |
| Net Collection Rate | 93.5% DEFAULT | 28.9% 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 | $2.8M | $5.7M | $8.5M | $11.3M | $11.3M | $11.3M | $11.3M |
| Denial Rate Reduction | $0 | $2.8M | $5.6M | $8.4M | $11.2M | $11.2M | $11.2M | $11.2M |
| A/R Days Reduction | $0 | $2.3M | $4.6M | $6.9M | $6.9M | $6.9M | $6.9M | $6.9M |
| Clean Claim Rate | $0 | $182K | $363K | $363K | $363K | $363K | $363K | $363K |
| Cumulative | $0 | $8.1M | $16.3M | $24.2M | $29.8M | $29.8M | $29.8M | $29.8M |
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 $29.8M is added at exit.
| Entry \ Exit | 9.0x | 10.0x | 11.0x | 11.5x | 12.0x |
|---|---|---|---|---|---|
| 8.0x | 101% / 33.0x | 106% / 37.1x | 110% / 41.1x | 112% / 43.1x | 114% / 45.1x |
| 9.0x | 96% / 29.0x | 101% / 32.6x | 105% / 36.2x | 107% / 38.0x | 109% / 39.8x |
| 10.0x | 92% / 25.8x | 96% / 29.0x | 100% / 32.2x | 102% / 33.9x | 104% / 35.5x |
| 11.0x | 87% / 23.1x | 92% / 26.1x | 96% / 29.0x | 98% / 30.5x | 100% / 31.9x |
| 12.0x | 84% / 20.9x | 88% / 23.6x | 92% / 26.3x | 94% / 27.7x | 96% / 29.0x |
Covenant Headroom (at 10x Entry, 6.5x Max Leverage)
Pro forma EBITDA can decline 73% before the 6.5x covenant trips. RCM uplift reduces leverage from 8.5x to 1.8x, adding 6.7 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 | $7.8M | — | $7.8M | 1.4% |
| Year 1 | $8.1M | +$19.9M | $28.0M | 4.9% |
| Year 2 | $8.3M | +$29.8M | $38.2M | 6.7% |
| Year 3 | $8.6M | +$29.8M | $38.4M | 6.8% |
| Year 4 | $8.8M | +$29.8M | $38.7M | 6.8% |
| Year 5 | $9.1M | +$29.8M | $38.9M | 6.9% |
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 | $5.7M | $8.5M | $11.3M | $13.6M |
| Denial Rate Reductio | $5.6M | $8.4M | $11.2M | $13.5M |
| A/R Days Reduction | $3.5M | $5.2M | $6.9M | $8.3M |
| Clean Claim Rate | $182K | $272K | $363K | $436K |
| Total | $14.9M | $22.4M | $29.8M | $35.8M |
Peer Context — Where This Hospital Sits
Key metrics vs 148 size-matched peers. Low percentile on margin/efficiency metrics = more room for improvement = larger bridge opportunity.
| Metric | Hospital | P25 | P50 | P75 | Percentile |
|---|---|---|---|---|---|
| Op Margin | 1.4% | -15.8% | -4.4% | 3.8% | P68 |
| Net-to-Gross | 23.8% | 17.8% | 23.1% | 28.9% | P53 |
| Occupancy | 54.1% | 54.8% | 65.7% | 75.3% | P23 |
| Rev/Bed | $1.5M | $1.3M | $1.9M | $2.7M | P33 |
| Exp/Bed | $1.5M | $1.5M | $2.0M | $2.8M | 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.