Bridge Realization Estimate
ML model predicts what fraction of the bridge is achievable (accuracy: 60%, n=5,839)
Expected realization: 65% of modeled bridge. Strengths: Net-to-Gross Ratio. Risks: Bed Count, Commercial Payer %. Risk-adjusted uplift: $10.6M (vs $16.2M 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 | $6.2M | $6.2M | $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 | $944K | $2.8M | $3.7M | $11.8M | 9mo |
| Clean Claim Rate | 88.0% DEFAULT | 96.0% BENCHMARK | $0 | $197K | $197K | $0 | 6mo |
| Net Collection Rate | 93.5% DEFAULT | 20.4% 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 | $6.2M | $6.2M | $6.2M | $6.2M |
| 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 | $197K | $197K | $197K | $197K | $197K | $197K |
| Cumulative | $0 | $4.4M | $8.8M | $13.1M | $16.2M | $16.2M | $16.2M | $16.2M |
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 $16.2M is added at exit.
| Entry \ Exit | 9.0x | 10.0x | 11.0x | 11.5x | 12.0x |
|---|---|---|---|---|---|
| 8.0x | 55% / 9.1x | 60% / 10.4x | 64% / 11.8x | 66% / 12.5x | 67% / 13.2x |
| 9.0x | 50% / 7.7x | 55% / 8.9x | 59% / 10.1x | 61% / 10.7x | 63% / 11.3x |
| 10.0x | 46% / 6.6x | 50% / 7.7x | 54% / 8.8x | 56% / 9.3x | 58% / 9.9x |
| 11.0x | 42% / 5.7x | 46% / 6.7x | 50% / 7.7x | 52% / 8.2x | 54% / 8.7x |
| 12.0x | 38% / 5.0x | 42% / 5.9x | 47% / 6.8x | 49% / 7.2x | 50% / 7.7x |
Covenant Headroom (at 10x Entry, 6.5x Max Leverage)
Pro forma EBITDA can decline 15% before the 6.5x covenant trips. RCM uplift reduces leverage from 8.5x to 5.5x, adding 2.9 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 | $30.8M | — | $30.8M | 10.0% |
| Year 1 | $31.8M | +$10.8M | $42.6M | 13.8% |
| Year 2 | $32.7M | +$16.2M | $48.9M | 15.9% |
| Year 3 | $33.7M | +$16.2M | $49.9M | 16.2% |
| Year 4 | $34.7M | +$16.2M | $50.9M | 16.5% |
| Year 5 | $35.8M | +$16.2M | $51.9M | 16.9% |
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 | $6.2M | $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 | $148K | $197K | $236K |
| Total | $8.1M | $12.1M | $16.2M | $19.4M |
Peer Context — Where This Hospital Sits
Key metrics vs 104 size-matched peers. Low percentile on margin/efficiency metrics = more room for improvement = larger bridge opportunity.
| Metric | Hospital | P25 | P50 | P75 | Percentile |
|---|---|---|---|---|---|
| Op Margin | 10.0% | -4.9% | 5.2% | 18.5% | P56 |
| Net-to-Gross | 8.0% | 9.9% | 14.2% | 20.5% | P5 |
| Occupancy | 52.4% | 56.6% | 66.3% | 75.4% | P18 |
| Rev/Bed | $932K | $857K | $1.2M | $1.4M | P32 |
| Exp/Bed | $839K | $777K | $988K | $1.3M | P33 |
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.