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. Risks: Revenue per Bed. Risk-adjusted uplift: $2.1M (vs $3.0M 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 | $1.1M | $31K | $1.1M | $0 | 12mo |
| A/R Days Reduction | 52.00 DEFAULT | 38.00 BENCHMARK | $173K | $513K | $685K | $2.2M | 9mo |
| Clean Claim Rate | 88.0% DEFAULT | 96.0% BENCHMARK | $0 | $36K | $36K | $0 | 6mo |
| Net Collection Rate | 93.5% DEFAULT | 35.5% 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 | $282K | $563K | $845K | $1.1M | $1.1M | $1.1M | $1.1M |
| Denial Rate Reduction | $0 | $279K | $558K | $837K | $1.1M | $1.1M | $1.1M | $1.1M |
| A/R Days Reduction | $0 | $228K | $457K | $685K | $685K | $685K | $685K | $685K |
| Clean Claim Rate | $0 | $18K | $36K | $36K | $36K | $36K | $36K | $36K |
| Cumulative | $0 | $807K | $1.6M | $2.4M | $3.0M | $3.0M | $3.0M | $3.0M |
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 $3.0M is added at exit.
| Entry \ Exit | 9.0x | 10.0x | 11.0x | 11.5x | 12.0x |
|---|---|---|---|---|---|
| 8.0x | 54% / 8.6x | 58% / 9.9x | 62% / 11.2x | 64% / 11.8x | 66% / 12.5x |
| 9.0x | 49% / 7.2x | 53% / 8.4x | 57% / 9.6x | 59% / 10.2x | 61% / 10.7x |
| 10.0x | 44% / 6.2x | 49% / 7.2x | 53% / 8.3x | 55% / 8.8x | 56% / 9.3x |
| 11.0x | 40% / 5.3x | 44% / 6.3x | 49% / 7.2x | 50% / 7.7x | 52% / 8.2x |
| 12.0x | 36% / 4.6x | 41% / 5.5x | 45% / 6.4x | 47% / 6.8x | 49% / 7.2x |
Covenant Headroom (at 10x Entry, 6.5x Max Leverage)
Pro forma EBITDA can decline 10% before the 6.5x covenant trips. RCM uplift reduces leverage from 8.5x to 5.8x, adding 2.6 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 | $6.5M | — | $6.5M | 11.6% |
| Year 1 | $6.7M | +$2.0M | $8.7M | 15.4% |
| Year 2 | $6.9M | +$3.0M | $9.9M | 17.5% |
| Year 3 | $7.1M | +$3.0M | $10.1M | 17.9% |
| Year 4 | $7.3M | +$3.0M | $10.3M | 18.3% |
| Year 5 | $7.6M | +$3.0M | $10.5M | 18.7% |
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 | $563K | $845K | $1.1M | $1.4M |
| Denial Rate Reductio | $558K | $837K | $1.1M | $1.3M |
| A/R Days Reduction | $343K | $514K | $685K | $823K |
| Clean Claim Rate | $18K | $27K | $36K | $43K |
| Total | $1.5M | $2.2M | $3.0M | $3.6M |
Peer Context — Where This Hospital Sits
Key metrics vs 167 size-matched peers. Low percentile on margin/efficiency metrics = more room for improvement = larger bridge opportunity.
| Metric | Hospital | P25 | P50 | P75 | Percentile |
|---|---|---|---|---|---|
| Op Margin | 11.6% | -20.3% | -3.9% | 4.5% | P87 |
| Net-to-Gross | 18.2% | 18.7% | 23.6% | 35.5% | P24 |
| Occupancy | 72.9% | 43.8% | 57.0% | 74.1% | P73 |
| Rev/Bed | $619K | $503K | $962K | $2.1M | P32 |
| Exp/Bed | $547K | $586K | $1.1M | $2.2M | 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.