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, Revenue per Bed. Risks: Bed Count. Risk-adjusted uplift: $18.8M (vs $25.4M 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 | $9.7M | $9.7M | $0 | 12mo |
| Denial Rate Reduction | 12.0% DEFAULT | 6.5% BENCHMARK | $9.3M | $266K | $9.6M | $0 | 12mo |
| A/R Days Reduction | 52.00 DEFAULT | 38.00 BENCHMARK | $1.5M | $4.4M | $5.9M | $18.5M | 9mo |
| Clean Claim Rate | 88.0% DEFAULT | 96.0% BENCHMARK | $0 | $309K | $309K | $0 | 6mo |
| Net Collection Rate | 93.5% DEFAULT | 26.9% 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 | $2.4M | $4.8M | $7.2M | $9.7M | $9.7M | $9.7M | $9.7M |
| Denial Rate Reduction | $0 | $2.4M | $4.8M | $7.2M | $9.6M | $9.6M | $9.6M | $9.6M |
| A/R Days Reduction | $0 | $2.0M | $3.9M | $5.9M | $5.9M | $5.9M | $5.9M | $5.9M |
| Clean Claim Rate | $0 | $155K | $309K | $309K | $309K | $309K | $309K | $309K |
| Cumulative | $0 | $6.9M | $13.8M | $20.6M | $25.4M | $25.4M | $25.4M | $25.4M |
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 $25.4M is added at exit.
| Entry \ Exit | 9.0x | 10.0x | 11.0x | 11.5x | 12.0x |
|---|---|---|---|---|---|
| 8.0x | 107% / 37.6x | 111% / 42.1x | 116% / 46.6x | 118% / 48.9x | 120% / 51.2x |
| 9.0x | 101% / 33.0x | 106% / 37.0x | 110% / 41.1x | 112% / 43.1x | 114% / 45.1x |
| 10.0x | 97% / 29.4x | 101% / 33.0x | 106% / 36.6x | 108% / 38.5x | 109% / 40.3x |
| 11.0x | 92% / 26.4x | 97% / 29.7x | 101% / 33.0x | 103% / 34.7x | 105% / 36.3x |
| 12.0x | 89% / 24.0x | 93% / 27.0x | 97% / 30.0x | 99% / 31.5x | 101% / 33.0x |
Covenant Headroom (at 10x Entry, 6.5x Max Leverage)
Pro forma EBITDA can decline 76% before the 6.5x covenant trips. RCM uplift reduces leverage from 8.5x to 1.6x, adding 6.9 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 | $5.8M | — | $5.8M | 1.2% |
| Year 1 | $5.9M | +$16.9M | $22.9M | 4.7% |
| Year 2 | $6.1M | +$25.4M | $31.5M | 6.5% |
| Year 3 | $6.3M | +$25.4M | $31.7M | 6.6% |
| Year 4 | $6.5M | +$25.4M | $31.9M | 6.6% |
| Year 5 | $6.7M | +$25.4M | $32.1M | 6.6% |
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 | $4.8M | $7.2M | $9.7M | $11.6M |
| Denial Rate Reductio | $4.8M | $7.2M | $9.6M | $11.5M |
| A/R Days Reduction | $2.9M | $4.4M | $5.9M | $7.1M |
| Clean Claim Rate | $155K | $232K | $309K | $371K |
| Total | $12.7M | $19.1M | $25.4M | $30.5M |
Peer Context — Where This Hospital Sits
Key metrics vs 24 size-matched peers. Low percentile on margin/efficiency metrics = more room for improvement = larger bridge opportunity.
| Metric | Hospital | P25 | P50 | P75 | Percentile |
|---|---|---|---|---|---|
| Op Margin | 1.2% | -8.4% | 2.7% | 11.9% | P42 |
| Net-to-Gross | 17.5% | 15.9% | 18.8% | 26.9% | P38 |
| Occupancy | 81.0% | 61.0% | 64.8% | 73.2% | P83 |
| Rev/Bed | $2.2M | $1.5M | $1.8M | $2.3M | P67 |
| Exp/Bed | $2.2M | $1.4M | $1.8M | $2.1M | P75 |
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.