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: Revenue per Bed. Risks: Occupancy Rate. Risk-adjusted uplift: $7.6M (vs $11.1M 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 | $4.2M | $4.2M | $0 | 12mo |
| Denial Rate Reduction | 12.0% DEFAULT | 6.5% BENCHMARK | $4.1M | $116K | $4.2M | $0 | 12mo |
| A/R Days Reduction | 52.00 DEFAULT | 38.00 BENCHMARK | $647K | $1.9M | $2.6M | $8.1M | 9mo |
| Clean Claim Rate | 88.0% DEFAULT | 96.0% BENCHMARK | $0 | $135K | $135K | $0 | 6mo |
| Net Collection Rate | 93.5% DEFAULT | 38.3% 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 | $1.1M | $2.1M | $3.2M | $4.2M | $4.2M | $4.2M | $4.2M |
| Denial Rate Reduction | $0 | $1.0M | $2.1M | $3.1M | $4.2M | $4.2M | $4.2M | $4.2M |
| A/R Days Reduction | $0 | $855K | $1.7M | $2.6M | $2.6M | $2.6M | $2.6M | $2.6M |
| Clean Claim Rate | $0 | $67K | $135K | $135K | $135K | $135K | $135K | $135K |
| Cumulative | $0 | $3.0M | $6.0M | $9.0M | $11.1M | $11.1M | $11.1M | $11.1M |
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 $11.1M is added at exit.
| Entry \ Exit | 9.0x | 10.0x | 11.0x | 11.5x | 12.0x |
|---|---|---|---|---|---|
| 8.0x | 95% / 28.0x | 99% / 31.5x | 104% / 35.0x | 106% / 36.7x | 108% / 38.5x |
| 9.0x | 90% / 24.6x | 94% / 27.7x | 98% / 30.8x | 100% / 32.3x | 102% / 33.8x |
| 10.0x | 85% / 21.8x | 90% / 24.6x | 94% / 27.4x | 96% / 28.7x | 98% / 30.1x |
| 11.0x | 81% / 19.5x | 86% / 22.0x | 90% / 24.6x | 92% / 25.8x | 93% / 27.1x |
| 12.0x | 77% / 17.6x | 82% / 19.9x | 86% / 22.2x | 88% / 23.4x | 90% / 24.6x |
Covenant Headroom (at 10x Entry, 6.5x Max Leverage)
Pro forma EBITDA can decline 68% before the 6.5x covenant trips. RCM uplift reduces leverage from 8.5x to 2.1x, adding 6.4 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 | $3.6M | — | $3.6M | 1.7% |
| Year 1 | $3.7M | +$7.4M | $11.1M | 5.2% |
| Year 2 | $3.8M | +$11.1M | $14.9M | 7.0% |
| Year 3 | $3.9M | +$11.1M | $15.0M | 7.1% |
| Year 4 | $4.0M | +$11.1M | $15.1M | 7.2% |
| Year 5 | $4.1M | +$11.1M | $15.2M | 7.2% |
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 | $2.1M | $3.2M | $4.2M | $5.1M |
| Denial Rate Reductio | $2.1M | $3.1M | $4.2M | $5.0M |
| A/R Days Reduction | $1.3M | $1.9M | $2.6M | $3.1M |
| Clean Claim Rate | $67K | $101K | $135K | $162K |
| Total | $5.5M | $8.3M | $11.1M | $13.3M |
Peer Context — Where This Hospital Sits
Key metrics vs 78 size-matched peers. Low percentile on margin/efficiency metrics = more room for improvement = larger bridge opportunity.
| Metric | Hospital | P25 | P50 | P75 | Percentile |
|---|---|---|---|---|---|
| Op Margin | 1.7% | -22.1% | -8.2% | 6.1% | P68 |
| Net-to-Gross | 24.4% | 22.3% | 27.9% | 38.3% | P36 |
| Occupancy | 44.8% | 34.5% | 49.9% | 68.6% | P45 |
| Rev/Bed | $2.4M | $580K | $988K | $1.6M | P91 |
| Exp/Bed | $2.3M | $532K | $1.2M | $1.7M | P90 |
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.