Bridge Realization Estimate
ML model predicts what fraction of the bridge is achievable (accuracy: 60%, n=5,839)
Expected realization: 57% of modeled bridge. Strengths: Net-to-Gross Ratio. Risks: Bed Count, Occupancy Rate. Risk-adjusted uplift: $11.2M (vs $19.4M 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 | $7.4M | $7.4M | $0 | 12mo |
| Denial Rate Reduction | 12.0% DEFAULT | 6.5% BENCHMARK | $7.1M | $203K | $7.3M | $0 | 12mo |
| A/R Days Reduction | 52.00 DEFAULT | 38.00 BENCHMARK | $1.1M | $3.4M | $4.5M | $14.2M | 9mo |
| Clean Claim Rate | 88.0% DEFAULT | 96.0% BENCHMARK | $0 | $236K | $236K | $0 | 6mo |
| Net Collection Rate | 93.5% DEFAULT | 22.1% 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 | $1.8M | $3.7M | $5.5M | $7.4M | $7.4M | $7.4M | $7.4M |
| Denial Rate Reduction | $0 | $1.8M | $3.7M | $5.5M | $7.3M | $7.3M | $7.3M | $7.3M |
| A/R Days Reduction | $0 | $1.5M | $3.0M | $4.5M | $4.5M | $4.5M | $4.5M | $4.5M |
| Clean Claim Rate | $0 | $118K | $236K | $236K | $236K | $236K | $236K | $236K |
| Cumulative | $0 | $5.3M | $10.6M | $15.8M | $19.4M | $19.4M | $19.4M | $19.4M |
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 $19.4M is added at exit.
| Entry \ Exit | 9.0x | 10.0x | 11.0x | 11.5x | 12.0x |
|---|---|---|---|---|---|
| 8.0x | 71% / 14.6x | 75% / 16.6x | 79% / 18.6x | 81% / 19.6x | 83% / 20.6x |
| 9.0x | 66% / 12.7x | 71% / 14.4x | 75% / 16.2x | 76% / 17.1x | 78% / 18.0x |
| 10.0x | 62% / 11.1x | 66% / 12.7x | 70% / 14.2x | 72% / 15.0x | 74% / 15.8x |
| 11.0x | 58% / 9.8x | 62% / 11.2x | 66% / 12.7x | 68% / 13.4x | 70% / 14.1x |
| 12.0x | 54% / 8.7x | 59% / 10.0x | 62% / 11.3x | 64% / 12.0x | 66% / 12.7x |
Covenant Headroom (at 10x Entry, 6.5x Max Leverage)
Pro forma EBITDA can decline 43% before the 6.5x covenant trips. RCM uplift reduces leverage from 8.5x to 3.7x, adding 4.8 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 | $15.1M | — | $15.1M | 4.1% |
| Year 1 | $15.6M | +$13.0M | $28.5M | 7.7% |
| Year 2 | $16.0M | +$19.4M | $35.5M | 9.6% |
| Year 3 | $16.5M | +$19.4M | $35.9M | 9.7% |
| Year 4 | $17.0M | +$19.4M | $36.4M | 9.9% |
| Year 5 | $17.5M | +$19.4M | $36.9M | 10.0% |
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 | $3.7M | $5.5M | $7.4M | $8.9M |
| Denial Rate Reductio | $3.7M | $5.5M | $7.3M | $8.8M |
| A/R Days Reduction | $2.2M | $3.4M | $4.5M | $5.4M |
| Clean Claim Rate | $118K | $177K | $236K | $284K |
| Total | $9.7M | $14.6M | $19.4M | $23.3M |
Peer Context — Where This Hospital Sits
Key metrics vs 37 size-matched peers. Low percentile on margin/efficiency metrics = more room for improvement = larger bridge opportunity.
| Metric | Hospital | P25 | P50 | P75 | Percentile |
|---|---|---|---|---|---|
| Op Margin | 4.1% | -5.3% | 5.7% | 12.5% | P42 |
| Net-to-Gross | 11.0% | 14.4% | 19.0% | 22.1% | P17 |
| Occupancy | 34.9% | 60.2% | 67.4% | 75.0% | P0 |
| Rev/Bed | $494K | $1.1M | $1.3M | $1.8M | P0 |
| Exp/Bed | $474K | $1.0M | $1.2M | $1.6M | P0 |
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.