Bridge Realization Estimate
ML model predicts what fraction of the bridge is achievable (accuracy: 60%, n=5,839)
Expected realization: 62% of modeled bridge. Strengths: Net-to-Gross Ratio. Risks: Occupancy Rate, Bed Count. Risk-adjusted uplift: $5.6M (vs $9.1M 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 | $3.5M | $3.5M | $0 | 12mo |
| Denial Rate Reduction | 12.0% DEFAULT | 6.5% BENCHMARK | $3.3M | $96K | $3.4M | $0 | 12mo |
| A/R Days Reduction | 52.00 DEFAULT | 38.00 BENCHMARK | $533K | $1.6M | $2.1M | $6.7M | 9mo |
| Clean Claim Rate | 88.0% DEFAULT | 96.0% BENCHMARK | $0 | $111K | $111K | $0 | 6mo |
| Net Collection Rate | 93.5% DEFAULT | 20.5% 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 | $869K | $1.7M | $2.6M | $3.5M | $3.5M | $3.5M | $3.5M |
| Denial Rate Reduction | $0 | $860K | $1.7M | $2.6M | $3.4M | $3.4M | $3.4M | $3.4M |
| A/R Days Reduction | $0 | $705K | $1.4M | $2.1M | $2.1M | $2.1M | $2.1M | $2.1M |
| Clean Claim Rate | $0 | $56K | $111K | $111K | $111K | $111K | $111K | $111K |
| Cumulative | $0 | $2.5M | $5.0M | $7.4M | $9.1M | $9.1M | $9.1M | $9.1M |
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 $9.1M is added at exit.
| Entry \ Exit | 9.0x | 10.0x | 11.0x | 11.5x | 12.0x |
|---|---|---|---|---|---|
| 8.0x | 531% / 9988.6x | 544% / 11098.8x | 557% / 12209.0x | 563% / 12764.1x | 568% / 13319.2x |
| 9.0x | 516% / 8878.4x | 529% / 9865.3x | 541% / 10852.1x | 547% / 11345.5x | 553% / 11839.0x |
| 10.0x | 503% / 7990.2x | 516% / 8878.4x | 528% / 9766.6x | 534% / 10210.7x | 539% / 10654.8x |
| 11.0x | 492% / 7263.6x | 504% / 8071.0x | 516% / 8878.4x | 522% / 9282.1x | 527% / 9685.8x |
| 12.0x | 482% / 6658.0x | 494% / 7398.1x | 505% / 8138.3x | 511% / 8508.4x | 516% / 8878.4x |
Covenant Headroom (at 10x Entry, 6.5x Max Leverage)
Pro forma EBITDA can decline 100% before the 6.5x covenant trips. RCM uplift reduces leverage from 8.5x to 0.0x, adding 8.5 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 | $7K | — | $7K | 0.0% |
| Year 1 | $7K | +$6.1M | $6.1M | 3.5% |
| Year 2 | $7K | +$9.1M | $9.1M | 5.3% |
| Year 3 | $7K | +$9.1M | $9.1M | 5.3% |
| Year 4 | $8K | +$9.1M | $9.1M | 5.3% |
| Year 5 | $8K | +$9.1M | $9.1M | 5.3% |
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 | $1.7M | $2.6M | $3.5M | $4.2M |
| Denial Rate Reductio | $1.7M | $2.6M | $3.4M | $4.1M |
| A/R Days Reduction | $1.1M | $1.6M | $2.1M | $2.5M |
| Clean Claim Rate | $56K | $83K | $111K | $133K |
| Total | $4.6M | $6.9M | $9.1M | $11.0M |
Peer Context — Where This Hospital Sits
Key metrics vs 107 size-matched peers. Low percentile on margin/efficiency metrics = more room for improvement = larger bridge opportunity.
| Metric | Hospital | P25 | P50 | P75 | Percentile |
|---|---|---|---|---|---|
| Op Margin | 0.0% | -4.9% | 3.2% | 17.3% | P42 |
| Net-to-Gross | 11.6% | 9.9% | 14.1% | 20.5% | P42 |
| Occupancy | 34.1% | 52.7% | 64.7% | 75.4% | P6 |
| Rev/Bed | $634K | $830K | $1.2M | $1.4M | P12 |
| Exp/Bed | $634K | $753K | $970K | $1.3M | P12 |
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.