Bridge Realization Estimate
ML model predicts what fraction of the bridge is achievable (accuracy: 60%, n=5,839)
Expected realization: 68% of modeled bridge. Strengths: Occupancy Rate, Net-to-Gross Ratio. Risks: Bed Count. Risk-adjusted uplift: $28.2M (vs $41.6M 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 | $15.8M | $15.8M | $0 | 12mo |
| Denial Rate Reduction | 12.0% DEFAULT | 6.5% BENCHMARK | $15.2M | $435K | $15.7M | $0 | 12mo |
| A/R Days Reduction | 52.00 DEFAULT | 38.00 BENCHMARK | $2.4M | $7.2M | $9.6M | $30.3M | 9mo |
| Clean Claim Rate | 88.0% DEFAULT | 96.0% BENCHMARK | $0 | $506K | $506K | $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 | $4.0M | $7.9M | $11.9M | $15.8M | $15.8M | $15.8M | $15.8M |
| Denial Rate Reduction | $0 | $3.9M | $7.8M | $11.7M | $15.7M | $15.7M | $15.7M | $15.7M |
| A/R Days Reduction | $0 | $3.2M | $6.4M | $9.6M | $9.6M | $9.6M | $9.6M | $9.6M |
| Clean Claim Rate | $0 | $253K | $506K | $506K | $506K | $506K | $506K | $506K |
| Cumulative | $0 | $11.3M | $22.7M | $33.7M | $41.6M | $41.6M | $41.6M | $41.6M |
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 $41.6M is added at exit.
| Entry \ Exit | 9.0x | 10.0x | 11.0x | 11.5x | 12.0x |
|---|---|---|---|---|---|
| 8.0x | 244% / 482.0x | 251% / 535.9x | 258% / 589.9x | 261% / 616.8x | 265% / 643.8x |
| 9.0x | 236% / 428.1x | 243% / 476.0x | 250% / 524.0x | 253% / 547.9x | 256% / 571.9x |
| 10.0x | 229% / 385.0x | 236% / 428.1x | 242% / 471.2x | 246% / 492.8x | 249% / 514.4x |
| 11.0x | 223% / 349.7x | 230% / 388.9x | 236% / 428.1x | 239% / 447.7x | 242% / 467.3x |
| 12.0x | 217% / 320.3x | 224% / 356.2x | 230% / 392.1x | 233% / 410.1x | 236% / 428.1x |
Covenant Headroom (at 10x Entry, 6.5x Max Leverage)
Pro forma EBITDA can decline 98% before the 6.5x covenant trips. RCM uplift reduces leverage from 8.5x to 0.1x, adding 8.3 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 | $638K | — | $638K | 0.1% |
| Year 1 | $657K | +$27.7M | $28.4M | 3.6% |
| Year 2 | $677K | +$41.6M | $42.3M | 5.3% |
| Year 3 | $697K | +$41.6M | $42.3M | 5.3% |
| Year 4 | $718K | +$41.6M | $42.3M | 5.4% |
| Year 5 | $739K | +$41.6M | $42.3M | 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 | $7.9M | $11.9M | $15.8M | $19.0M |
| Denial Rate Reductio | $7.8M | $11.7M | $15.7M | $18.8M |
| A/R Days Reduction | $4.8M | $7.2M | $9.6M | $11.5M |
| Clean Claim Rate | $253K | $379K | $506K | $607K |
| Total | $20.8M | $31.2M | $41.6M | $49.9M |
Peer Context — Where This Hospital Sits
Key metrics vs 109 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% | -14.7% | -5.4% | 3.0% | P65 |
| Net-to-Gross | 14.7% | 17.9% | 23.8% | 28.9% | P10 |
| Occupancy | 67.2% | 57.3% | 68.9% | 77.4% | P46 |
| Rev/Bed | $1.6M | $1.5M | $1.9M | $2.8M | P34 |
| Exp/Bed | $1.6M | $1.6M | $2.0M | $2.9M | P24 |
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.