Bridge Realization Estimate
ML model predicts what fraction of the bridge is achievable (accuracy: 60%, n=5,839)
Expected realization: 72% of modeled bridge. Strengths: Occupancy Rate, Net-to-Gross Ratio. Risks: Revenue per Bed. Risk-adjusted uplift: $2.0M (vs $2.8M 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 | $1.1M | $1.1M | $0 | 12mo |
| Denial Rate Reduction | 12.0% DEFAULT | 6.5% BENCHMARK | $1.0M | $29K | $1.1M | $0 | 12mo |
| A/R Days Reduction | 52.00 DEFAULT | 38.00 BENCHMARK | $164K | $486K | $650K | $2.0M | 9mo |
| Clean Claim Rate | 88.0% DEFAULT | 96.0% BENCHMARK | $0 | $34K | $34K | $0 | 6mo |
| Net Collection Rate | 93.5% DEFAULT | 36.8% 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 | $267K | $534K | $801K | $1.1M | $1.1M | $1.1M | $1.1M |
| Denial Rate Reduction | $0 | $264K | $529K | $793K | $1.1M | $1.1M | $1.1M | $1.1M |
| A/R Days Reduction | $0 | $217K | $433K | $650K | $650K | $650K | $650K | $650K |
| Clean Claim Rate | $0 | $17K | $34K | $34K | $34K | $34K | $34K | $34K |
| Cumulative | $0 | $765K | $1.5M | $2.3M | $2.8M | $2.8M | $2.8M | $2.8M |
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 $2.8M is added at exit.
| Entry \ Exit | 9.0x | 10.0x | 11.0x | 11.5x | 12.0x |
|---|---|---|---|---|---|
| 8.0x | 66% / 12.4x | 70% / 14.2x | 74% / 15.9x | 76% / 16.8x | 78% / 17.7x |
| 9.0x | 61% / 10.7x | 65% / 12.3x | 69% / 13.8x | 71% / 14.6x | 73% / 15.4x |
| 10.0x | 56% / 9.3x | 61% / 10.7x | 65% / 12.1x | 67% / 12.8x | 68% / 13.5x |
| 11.0x | 52% / 8.2x | 57% / 9.4x | 61% / 10.7x | 63% / 11.3x | 64% / 12.0x |
| 12.0x | 48% / 7.2x | 53% / 8.4x | 57% / 9.5x | 59% / 10.1x | 61% / 10.7x |
Covenant Headroom (at 10x Entry, 6.5x Max Leverage)
Pro forma EBITDA can decline 35% before the 6.5x covenant trips. RCM uplift reduces leverage from 8.5x to 4.3x, adding 4.2 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 | $2.8M | — | $2.8M | 5.3% |
| Year 1 | $2.9M | +$1.9M | $4.8M | 9.0% |
| Year 2 | $3.0M | +$2.8M | $5.8M | 10.9% |
| Year 3 | $3.1M | +$2.8M | $5.9M | 11.1% |
| Year 4 | $3.2M | +$2.8M | $6.0M | 11.3% |
| Year 5 | $3.3M | +$2.8M | $6.1M | 11.4% |
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 | $534K | $801K | $1.1M | $1.3M |
| Denial Rate Reductio | $529K | $793K | $1.1M | $1.3M |
| A/R Days Reduction | $325K | $488K | $650K | $780K |
| Clean Claim Rate | $17K | $26K | $34K | $41K |
| Total | $1.4M | $2.1M | $2.8M | $3.4M |
Peer Context — Where This Hospital Sits
Key metrics vs 154 size-matched peers. Low percentile on margin/efficiency metrics = more room for improvement = larger bridge opportunity.
| Metric | Hospital | P25 | P50 | P75 | Percentile |
|---|---|---|---|---|---|
| Op Margin | 5.3% | -23.0% | -5.4% | 3.7% | P80 |
| Net-to-Gross | 16.4% | 19.2% | 24.3% | 36.8% | P15 |
| Occupancy | 74.9% | 42.9% | 56.9% | 71.5% | P78 |
| Rev/Bed | $660K | $511K | $905K | $2.1M | P36 |
| Exp/Bed | $624K | $601K | $1.1M | $2.2M | P27 |
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.