Bridge Realization Estimate
ML model predicts what fraction of the bridge is achievable (accuracy: 60%, n=5,839)
Expected realization: 69% of modeled bridge. Strengths: Bed Count. Risk-adjusted uplift: $2.0M (vs $2.9M 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 | $1.1M | $1.1M | $0 | 12mo |
| Denial Rate Reduction | 12.0% DEFAULT | 6.5% BENCHMARK | $1.1M | $30K | $1.1M | $0 | 12mo |
| A/R Days Reduction | 52.00 DEFAULT | 38.00 BENCHMARK | $170K | $505K | $675K | $2.1M | 9mo |
| Clean Claim Rate | 88.0% DEFAULT | 96.0% BENCHMARK | $0 | $35K | $35K | $0 | 6mo |
| Net Collection Rate | 93.5% DEFAULT | 50.4% 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 | $277K | $555K | $832K | $1.1M | $1.1M | $1.1M | $1.1M |
| Denial Rate Reduction | $0 | $275K | $549K | $824K | $1.1M | $1.1M | $1.1M | $1.1M |
| A/R Days Reduction | $0 | $225K | $450K | $675K | $675K | $675K | $675K | $675K |
| Clean Claim Rate | $0 | $18K | $35K | $35K | $35K | $35K | $35K | $35K |
| Cumulative | $0 | $795K | $1.6M | $2.4M | $2.9M | $2.9M | $2.9M | $2.9M |
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 $2.9M is added at exit.
| Entry \ Exit | 9.0x | 10.0x | 11.0x | 11.5x | 12.0x |
|---|---|---|---|---|---|
| 8.0x | 46% / 6.7x | 51% / 7.8x | 55% / 8.9x | 57% / 9.5x | 59% / 10.0x |
| 9.0x | 41% / 5.6x | 46% / 6.6x | 50% / 7.6x | 52% / 8.1x | 54% / 8.6x |
| 10.0x | 36% / 4.7x | 41% / 5.6x | 45% / 6.5x | 47% / 6.9x | 49% / 7.4x |
| 11.0x | 32% / 4.0x | 37% / 4.8x | 41% / 5.6x | 43% / 6.0x | 45% / 6.4x |
| 12.0x | 28% / 3.4x | 33% / 4.1x | 37% / 4.9x | 39% / 5.2x | 41% / 5.6x |
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 7.0x, adding 1.4 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 | $14.3M | — | $14.3M | 25.8% |
| Year 1 | $14.7M | +$1.9M | $16.7M | 30.1% |
| Year 2 | $15.2M | +$2.9M | $18.1M | 32.6% |
| Year 3 | $15.6M | +$2.9M | $18.6M | 33.5% |
| Year 4 | $16.1M | +$2.9M | $19.0M | 34.3% |
| Year 5 | $16.6M | +$2.9M | $19.5M | 35.2% |
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 | $555K | $832K | $1.1M | $1.3M |
| Denial Rate Reductio | $549K | $824K | $1.1M | $1.3M |
| A/R Days Reduction | $337K | $506K | $675K | $810K |
| Clean Claim Rate | $18K | $27K | $35K | $43K |
| Total | $1.5M | $2.2M | $2.9M | $3.5M |
Peer Context — Where This Hospital Sits
Key metrics vs 76 size-matched peers. Low percentile on margin/efficiency metrics = more room for improvement = larger bridge opportunity.
| Metric | Hospital | P25 | P50 | P75 | Percentile |
|---|---|---|---|---|---|
| Op Margin | 25.8% | -9.2% | -3.3% | 7.3% | P95 |
| Net-to-Gross | 17.2% | 32.7% | 41.9% | 50.4% | P0 |
| Occupancy | 51.4% | 19.4% | 28.8% | 42.3% | P83 |
| Rev/Bed | $1.4M | $906K | $1.4M | $1.9M | P51 |
| Exp/Bed | $1.1M | $1.1M | $1.5M | $1.9M | P24 |
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.