Bridge Realization Estimate
ML model predicts what fraction of the bridge is achievable (accuracy: 60%, n=5,839)
Expected realization: 68% of modeled bridge. Strengths: Occupancy Rate, Net-to-Gross Ratio. Risks: Bed Count, Commercial Payer %. Risk-adjusted uplift: $11.0M (vs $16.1M 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 | $6.1M | $6.1M | $0 | 12mo |
| Denial Rate Reduction | 12.0% DEFAULT | 6.5% BENCHMARK | $5.9M | $169K | $6.1M | $0 | 12mo |
| A/R Days Reduction | 52.00 DEFAULT | 38.00 BENCHMARK | $940K | $2.8M | $3.7M | $11.8M | 9mo |
| Clean Claim Rate | 88.0% DEFAULT | 96.0% BENCHMARK | $0 | $196K | $196K | $0 | 6mo |
| Net Collection Rate | 93.5% DEFAULT | 20.6% 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 | $1.5M | $3.1M | $4.6M | $6.1M | $6.1M | $6.1M | $6.1M |
| Denial Rate Reduction | $0 | $1.5M | $3.0M | $4.6M | $6.1M | $6.1M | $6.1M | $6.1M |
| A/R Days Reduction | $0 | $1.2M | $2.5M | $3.7M | $3.7M | $3.7M | $3.7M | $3.7M |
| Clean Claim Rate | $0 | $98K | $196K | $196K | $196K | $196K | $196K | $196K |
| Cumulative | $0 | $4.4M | $8.8M | $13.1M | $16.1M | $16.1M | $16.1M | $16.1M |
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 $16.1M is added at exit.
| Entry \ Exit | 9.0x | 10.0x | 11.0x | 11.5x | 12.0x |
|---|---|---|---|---|---|
| 8.0x | 72% / 15.1x | 76% / 17.1x | 80% / 19.1x | 82% / 20.1x | 84% / 21.1x |
| 9.0x | 67% / 13.0x | 71% / 14.8x | 75% / 16.6x | 77% / 17.5x | 79% / 18.4x |
| 10.0x | 63% / 11.4x | 67% / 13.0x | 71% / 14.6x | 73% / 15.5x | 75% / 16.3x |
| 11.0x | 59% / 10.1x | 63% / 11.5x | 67% / 13.0x | 69% / 13.8x | 71% / 14.5x |
| 12.0x | 55% / 8.9x | 59% / 10.3x | 63% / 11.7x | 65% / 12.3x | 67% / 13.0x |
Covenant Headroom (at 10x Entry, 6.5x Max Leverage)
Pro forma EBITDA can decline 44% before the 6.5x covenant trips. RCM uplift reduces leverage from 8.5x to 3.6x, 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 | $12.0M | — | $12.0M | 3.9% |
| Year 1 | $12.4M | +$10.7M | $23.1M | 7.5% |
| Year 2 | $12.7M | +$16.1M | $28.9M | 9.4% |
| Year 3 | $13.1M | +$16.1M | $29.2M | 9.5% |
| Year 4 | $13.5M | +$16.1M | $29.6M | 9.7% |
| Year 5 | $13.9M | +$16.1M | $30.0M | 9.8% |
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 | $3.1M | $4.6M | $6.1M | $7.4M |
| Denial Rate Reductio | $3.0M | $4.6M | $6.1M | $7.3M |
| A/R Days Reduction | $1.9M | $2.8M | $3.7M | $4.5M |
| Clean Claim Rate | $98K | $147K | $196K | $235K |
| Total | $8.1M | $12.1M | $16.1M | $19.3M |
Peer Context — Where This Hospital Sits
Key metrics vs 108 size-matched peers. Low percentile on margin/efficiency metrics = more room for improvement = larger bridge opportunity.
| Metric | Hospital | P25 | P50 | P75 | Percentile |
|---|---|---|---|---|---|
| Op Margin | 3.9% | -4.9% | 2.8% | 16.9% | P51 |
| Net-to-Gross | 14.4% | 10.1% | 14.4% | 20.6% | P50 |
| Occupancy | 63.8% | 53.2% | 64.8% | 75.4% | P44 |
| Rev/Bed | $1.1M | $834K | $1.2M | $1.4M | P42 |
| Exp/Bed | $1.0M | $769K | $976K | $1.3M | P55 |
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.