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, Revenue per Bed. Risks: Commercial Payer %. Risk-adjusted uplift: $17.5M (vs $24.1M 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 | $9.2M | $9.2M | $0 | 12mo |
| Denial Rate Reduction | 12.0% DEFAULT | 6.5% BENCHMARK | $8.8M | $252K | $9.1M | $0 | 12mo |
| A/R Days Reduction | 52.00 DEFAULT | 38.00 BENCHMARK | $1.4M | $4.2M | $5.6M | $17.6M | 9mo |
| Clean Claim Rate | 88.0% DEFAULT | 96.0% BENCHMARK | $0 | $294K | $294K | $0 | 6mo |
| Net Collection Rate | 93.5% DEFAULT | 29.2% 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 | $2.3M | $4.6M | $6.9M | $9.2M | $9.2M | $9.2M | $9.2M |
| Denial Rate Reduction | $0 | $2.3M | $4.5M | $6.8M | $9.1M | $9.1M | $9.1M | $9.1M |
| A/R Days Reduction | $0 | $1.9M | $3.7M | $5.6M | $5.6M | $5.6M | $5.6M | $5.6M |
| Clean Claim Rate | $0 | $147K | $294K | $294K | $294K | $294K | $294K | $294K |
| Cumulative | $0 | $6.6M | $13.1M | $19.6M | $24.1M | $24.1M | $24.1M | $24.1M |
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 $24.1M is added at exit.
| Entry \ Exit | 9.0x | 10.0x | 11.0x | 11.5x | 12.0x |
|---|---|---|---|---|---|
| 8.0x | 151% / 99.1x | 156% / 110.5x | 161% / 121.9x | 164% / 127.6x | 166% / 133.3x |
| 9.0x | 145% / 87.8x | 150% / 97.9x | 155% / 108.0x | 157% / 113.0x | 160% / 118.1x |
| 10.0x | 139% / 78.7x | 145% / 87.8x | 150% / 96.9x | 152% / 101.4x | 154% / 106.0x |
| 11.0x | 135% / 71.2x | 140% / 79.5x | 145% / 87.8x | 147% / 91.9x | 149% / 96.0x |
| 12.0x | 130% / 65.0x | 136% / 72.6x | 140% / 80.2x | 143% / 84.0x | 145% / 87.8x |
Covenant Headroom (at 10x Entry, 6.5x Max Leverage)
Pro forma EBITDA can decline 91% before the 6.5x covenant trips. RCM uplift reduces leverage from 8.5x to 0.6x, adding 7.9 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 | $1.9M | — | $1.9M | 0.4% |
| Year 1 | $1.9M | +$16.1M | $18.0M | 3.9% |
| Year 2 | $2.0M | +$24.1M | $26.1M | 5.7% |
| Year 3 | $2.1M | +$24.1M | $26.2M | 5.7% |
| Year 4 | $2.1M | +$24.1M | $26.3M | 5.7% |
| Year 5 | $2.2M | +$24.1M | $26.3M | 5.7% |
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 | $4.6M | $6.9M | $9.2M | $11.0M |
| Denial Rate Reductio | $4.5M | $6.8M | $9.1M | $10.9M |
| A/R Days Reduction | $2.8M | $4.2M | $5.6M | $6.7M |
| Clean Claim Rate | $147K | $220K | $294K | $352K |
| Total | $12.1M | $18.1M | $24.1M | $29.0M |
Peer Context — Where This Hospital Sits
Key metrics vs 210 size-matched peers. Low percentile on margin/efficiency metrics = more room for improvement = larger bridge opportunity.
| Metric | Hospital | P25 | P50 | P75 | Percentile |
|---|---|---|---|---|---|
| Op Margin | 0.4% | -17.6% | -4.5% | 4.0% | P66 |
| Net-to-Gross | 28.2% | 18.0% | 22.3% | 29.2% | P72 |
| Occupancy | 71.0% | 46.6% | 60.8% | 72.6% | P70 |
| Rev/Bed | $2.7M | $790K | $1.4M | $2.2M | P84 |
| Exp/Bed | $2.7M | $821K | $1.6M | $2.4M | P81 |
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.