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: Revenue per Bed, Occupancy Rate. Risk-adjusted uplift: $3.9M (vs $5.3M 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 | $2.0M | $2.0M | $0 | 12mo |
| Denial Rate Reduction | 12.0% DEFAULT | 6.5% BENCHMARK | $1.9M | $55K | $2.0M | $0 | 12mo |
| A/R Days Reduction | 52.00 DEFAULT | 38.00 BENCHMARK | $310K | $918K | $1.2M | $3.9M | 9mo |
| Clean Claim Rate | 88.0% DEFAULT | 96.0% BENCHMARK | $0 | $65K | $65K | $0 | 6mo |
| Net Collection Rate | 93.5% DEFAULT | 60.6% 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 | $505K | $1.0M | $1.5M | $2.0M | $2.0M | $2.0M | $2.0M |
| Denial Rate Reduction | $0 | $500K | $999K | $1.5M | $2.0M | $2.0M | $2.0M | $2.0M |
| A/R Days Reduction | $0 | $409K | $819K | $1.2M | $1.2M | $1.2M | $1.2M | $1.2M |
| Clean Claim Rate | $0 | $32K | $65K | $65K | $65K | $65K | $65K | $65K |
| Cumulative | $0 | $1.4M | $2.9M | $4.3M | $5.3M | $5.3M | $5.3M | $5.3M |
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 $5.3M is added at exit.
| Entry \ Exit | 9.0x | 10.0x | 11.0x | 11.5x | 12.0x |
|---|---|---|---|---|---|
| 8.0x | 49% / 7.3x | 53% / 8.4x | 57% / 9.6x | 59% / 10.2x | 61% / 10.8x |
| 9.0x | 44% / 6.1x | 48% / 7.2x | 52% / 8.2x | 54% / 8.7x | 56% / 9.2x |
| 10.0x | 39% / 5.2x | 44% / 6.1x | 48% / 7.0x | 50% / 7.5x | 51% / 8.0x |
| 11.0x | 35% / 4.4x | 39% / 5.3x | 44% / 6.1x | 46% / 6.5x | 47% / 7.0x |
| 12.0x | 30% / 3.8x | 35% / 4.5x | 40% / 5.3x | 42% / 5.7x | 44% / 6.1x |
Covenant Headroom (at 10x Entry, 6.5x Max Leverage)
Pro forma EBITDA can decline -2% before the 6.5x covenant trips. RCM uplift reduces leverage from 8.5x to 6.6x, adding 1.8 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 | $19.0M | — | $19.0M | 18.8% |
| Year 1 | $19.5M | +$3.5M | $23.1M | 22.9% |
| Year 2 | $20.1M | +$5.3M | $25.4M | 25.2% |
| Year 3 | $20.7M | +$5.3M | $26.0M | 25.8% |
| Year 4 | $21.4M | +$5.3M | $26.7M | 26.4% |
| Year 5 | $22.0M | +$5.3M | $27.3M | 27.1% |
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 | $1.0M | $1.5M | $2.0M | $2.4M |
| Denial Rate Reductio | $999K | $1.5M | $2.0M | $2.4M |
| A/R Days Reduction | $614K | $921K | $1.2M | $1.5M |
| Clean Claim Rate | $32K | $48K | $65K | $77K |
| Total | $2.7M | $4.0M | $5.3M | $6.4M |
Peer Context — Where This Hospital Sits
Key metrics vs 74 size-matched peers. Low percentile on margin/efficiency metrics = more room for improvement = larger bridge opportunity.
| Metric | Hospital | P25 | P50 | P75 | Percentile |
|---|---|---|---|---|---|
| Op Margin | 18.8% | -18.0% | -6.3% | 1.8% | P97 |
| Net-to-Gross | 30.8% | 29.2% | 41.6% | 60.6% | P33 |
| Occupancy | 60.5% | 28.4% | 43.8% | 67.1% | P69 |
| Rev/Bed | $3.9M | $720K | $2.1M | $3.2M | P84 |
| Exp/Bed | $3.2M | $878K | $2.0M | $3.2M | P69 |
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.