Bridge Realization Estimate
ML model predicts what fraction of the bridge is achievable (accuracy: 60%, n=5,839)
Expected realization: 74% of modeled bridge. Strengths: Occupancy Rate. Risks: Revenue per Bed. Risk-adjusted uplift: $2.6M (vs $3.5M 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 | $1.3M | $1.3M | $0 | 12mo |
| Denial Rate Reduction | 12.0% DEFAULT | 6.5% BENCHMARK | $1.3M | $37K | $1.3M | $0 | 12mo |
| A/R Days Reduction | 52.00 DEFAULT | 38.00 BENCHMARK | $204K | $605K | $809K | $2.5M | 9mo |
| Clean Claim Rate | 88.0% DEFAULT | 96.0% BENCHMARK | $0 | $43K | $43K | $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 | $332K | $664K | $997K | $1.3M | $1.3M | $1.3M | $1.3M |
| Denial Rate Reduction | $0 | $329K | $658K | $987K | $1.3M | $1.3M | $1.3M | $1.3M |
| A/R Days Reduction | $0 | $270K | $539K | $809K | $809K | $809K | $809K | $809K |
| Clean Claim Rate | $0 | $21K | $43K | $43K | $43K | $43K | $43K | $43K |
| Cumulative | $0 | $952K | $1.9M | $2.8M | $3.5M | $3.5M | $3.5M | $3.5M |
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 $3.5M is added at exit.
| Entry \ Exit | 9.0x | 10.0x | 11.0x | 11.5x | 12.0x |
|---|---|---|---|---|---|
| 8.0x | 46% / 6.5x | 50% / 7.6x | 54% / 8.7x | 56% / 9.2x | 58% / 9.8x |
| 9.0x | 40% / 5.4x | 45% / 6.4x | 49% / 7.4x | 51% / 7.8x | 53% / 8.3x |
| 10.0x | 36% / 4.6x | 40% / 5.4x | 45% / 6.3x | 46% / 6.7x | 48% / 7.2x |
| 11.0x | 31% / 3.9x | 36% / 4.7x | 40% / 5.4x | 42% / 5.8x | 44% / 6.2x |
| 12.0x | 27% / 3.3x | 32% / 4.0x | 36% / 4.7x | 38% / 5.1x | 40% / 5.4x |
Covenant Headroom (at 10x Entry, 6.5x Max Leverage)
Pro forma EBITDA can decline -11% before the 6.5x covenant trips. RCM uplift reduces leverage from 8.5x to 7.2x, adding 1.3 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 | $19.8M | — | $19.8M | 29.8% |
| Year 1 | $20.4M | +$2.3M | $22.7M | 34.2% |
| Year 2 | $21.0M | +$3.5M | $24.5M | 36.8% |
| Year 3 | $21.6M | +$3.5M | $25.1M | 37.8% |
| Year 4 | $22.3M | +$3.5M | $25.8M | 38.8% |
| Year 5 | $22.9M | +$3.5M | $26.4M | 39.8% |
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 | $664K | $997K | $1.3M | $1.6M |
| Denial Rate Reductio | $658K | $987K | $1.3M | $1.6M |
| A/R Days Reduction | $404K | $606K | $809K | $970K |
| Clean Claim Rate | $21K | $32K | $43K | $51K |
| Total | $1.7M | $2.6M | $3.5M | $4.2M |
Peer Context — Where This Hospital Sits
Key metrics vs 208 size-matched peers. Low percentile on margin/efficiency metrics = more room for improvement = larger bridge opportunity.
| Metric | Hospital | P25 | P50 | P75 | Percentile |
|---|---|---|---|---|---|
| Op Margin | 29.8% | -17.5% | -4.5% | 3.8% | P99 |
| Net-to-Gross | 58.9% | 17.9% | 22.3% | 29.2% | P95 |
| Occupancy | 92.4% | 46.5% | 60.1% | 72.5% | P95 |
| Rev/Bed | $389K | $780K | $1.4M | $2.2M | P8 |
| Exp/Bed | $273K | $818K | $1.6M | $2.4M | P4 |
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.