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, Net-to-Gross Ratio. Risks: Bed Count. Risk-adjusted uplift: $14.7M (vs $19.9M 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 | $7.6M | $7.6M | $0 | 12mo |
| Denial Rate Reduction | 12.0% DEFAULT | 6.5% BENCHMARK | $7.3M | $208K | $7.5M | $0 | 12mo |
| A/R Days Reduction | 52.00 DEFAULT | 38.00 BENCHMARK | $1.2M | $3.4M | $4.6M | $14.5M | 9mo |
| Clean Claim Rate | 88.0% DEFAULT | 96.0% BENCHMARK | $0 | $242K | $242K | $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 | $1.9M | $3.8M | $5.7M | $7.6M | $7.6M | $7.6M | $7.6M |
| Denial Rate Reduction | $0 | $1.9M | $3.7M | $5.6M | $7.5M | $7.5M | $7.5M | $7.5M |
| A/R Days Reduction | $0 | $1.5M | $3.1M | $4.6M | $4.6M | $4.6M | $4.6M | $4.6M |
| Clean Claim Rate | $0 | $121K | $242K | $242K | $242K | $242K | $242K | $242K |
| Cumulative | $0 | $5.4M | $10.8M | $16.1M | $19.9M | $19.9M | $19.9M | $19.9M |
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 $19.9M is added at exit.
| Entry \ Exit | 9.0x | 10.0x | 11.0x | 11.5x | 12.0x |
|---|---|---|---|---|---|
| 8.0x | 53% / 8.3x | 57% / 9.6x | 61% / 10.8x | 63% / 11.5x | 65% / 12.1x |
| 9.0x | 48% / 7.0x | 52% / 8.1x | 56% / 9.3x | 58% / 9.8x | 60% / 10.4x |
| 10.0x | 43% / 6.0x | 48% / 7.0x | 52% / 8.0x | 54% / 8.5x | 55% / 9.1x |
| 11.0x | 39% / 5.1x | 43% / 6.1x | 48% / 7.0x | 49% / 7.5x | 51% / 7.9x |
| 12.0x | 35% / 4.4x | 40% / 5.3x | 44% / 6.1x | 46% / 6.6x | 48% / 7.0x |
Covenant Headroom (at 10x Entry, 6.5x Max Leverage)
Pro forma EBITDA can decline 8% before the 6.5x covenant trips. RCM uplift reduces leverage from 8.5x to 6.0x, adding 2.5 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 | $47.8M | — | $47.8M | 12.6% |
| Year 1 | $49.2M | +$13.3M | $62.5M | 16.5% |
| Year 2 | $50.7M | +$19.9M | $70.6M | 18.6% |
| Year 3 | $52.2M | +$19.9M | $72.1M | 19.0% |
| Year 4 | $53.7M | +$19.9M | $73.7M | 19.5% |
| Year 5 | $55.4M | +$19.9M | $75.3M | 19.9% |
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 | $3.8M | $5.7M | $7.6M | $9.1M |
| Denial Rate Reductio | $3.7M | $5.6M | $7.5M | $9.0M |
| A/R Days Reduction | $2.3M | $3.5M | $4.6M | $5.5M |
| Clean Claim Rate | $121K | $182K | $242K | $291K |
| Total | $10.0M | $14.9M | $19.9M | $23.9M |
Peer Context — Where This Hospital Sits
Key metrics vs 110 size-matched peers. Low percentile on margin/efficiency metrics = more room for improvement = larger bridge opportunity.
| Metric | Hospital | P25 | P50 | P75 | Percentile |
|---|---|---|---|---|---|
| Op Margin | 12.6% | -5.1% | 2.8% | 17.1% | P67 |
| Net-to-Gross | 11.0% | 10.0% | 14.2% | 20.5% | P39 |
| Occupancy | 82.4% | 52.6% | 64.4% | 75.3% | P88 |
| Rev/Bed | $1.5M | $828K | $1.2M | $1.4M | P78 |
| Exp/Bed | $1.3M | $753K | $971K | $1.3M | 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.