Bridge Realization Estimate
ML model predicts what fraction of the bridge is achievable (accuracy: 60%, n=5,839)
Expected realization: 60% of modeled bridge. Risks: Occupancy Rate, Revenue per Bed. Risk-adjusted uplift: $2.1M (vs $3.6M 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 | $1.4M | $1.4M | $0 | 12mo |
| Denial Rate Reduction | 12.0% DEFAULT | 6.5% BENCHMARK | $1.3M | $37K | $1.3M | $0 | 12mo |
| A/R Days Reduction | 52.00 DEFAULT | 38.00 BENCHMARK | $208K | $617K | $824K | $2.6M | 9mo |
| Clean Claim Rate | 88.0% DEFAULT | 96.0% BENCHMARK | $0 | $43K | $43K | $0 | 6mo |
| Net Collection Rate | 93.5% DEFAULT | 38.0% 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 | $339K | $678K | $1.0M | $1.4M | $1.4M | $1.4M | $1.4M |
| Denial Rate Reduction | $0 | $335K | $671K | $1.0M | $1.3M | $1.3M | $1.3M | $1.3M |
| A/R Days Reduction | $0 | $275K | $550K | $824K | $824K | $824K | $824K | $824K |
| Clean Claim Rate | $0 | $22K | $43K | $43K | $43K | $43K | $43K | $43K |
| Cumulative | $0 | $971K | $1.9M | $2.9M | $3.6M | $3.6M | $3.6M | $3.6M |
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 $3.6M is added at exit.
| Entry \ Exit | 9.0x | 10.0x | 11.0x | 11.5x | 12.0x |
|---|---|---|---|---|---|
| 8.0x | 41% / 5.5x | 45% / 6.5x | 49% / 7.5x | 51% / 8.0x | 53% / 8.4x |
| 9.0x | 35% / 4.5x | 40% / 5.4x | 44% / 6.3x | 46% / 6.7x | 48% / 7.1x |
| 10.0x | 30% / 3.8x | 35% / 4.5x | 40% / 5.3x | 42% / 5.7x | 44% / 6.1x |
| 11.0x | 26% / 3.1x | 31% / 3.8x | 35% / 4.5x | 37% / 4.9x | 39% / 5.2x |
| 12.0x | 21% / 2.6x | 27% / 3.2x | 31% / 3.9x | 33% / 4.2x | 35% / 4.5x |
Covenant Headroom (at 10x Entry, 6.5x Max Leverage)
Pro forma EBITDA can decline -25% before the 6.5x covenant trips. RCM uplift reduces leverage from 8.5x to 8.1x, adding 0.3 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 | $91.2M | — | $91.2M | 134.6% |
| Year 1 | $94.0M | +$2.4M | $96.3M | 142.2% |
| Year 2 | $96.8M | +$3.6M | $100.3M | 148.1% |
| Year 3 | $99.7M | +$3.6M | $103.2M | 152.4% |
| Year 4 | $102.7M | +$3.6M | $106.2M | 156.8% |
| Year 5 | $105.8M | +$3.6M | $109.3M | 161.3% |
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 | $678K | $1.0M | $1.4M | $1.6M |
| Denial Rate Reductio | $671K | $1.0M | $1.3M | $1.6M |
| A/R Days Reduction | $412K | $618K | $824K | $989K |
| Clean Claim Rate | $22K | $33K | $43K | $52K |
| Total | $1.8M | $2.7M | $3.6M | $4.3M |
Peer Context — Where This Hospital Sits
Key metrics vs 79 size-matched peers. Low percentile on margin/efficiency metrics = more room for improvement = larger bridge opportunity.
| Metric | Hospital | P25 | P50 | P75 | Percentile |
|---|---|---|---|---|---|
| Op Margin | 100.0% | -23.3% | -8.5% | 4.7% | P99 |
| Net-to-Gross | 17.5% | 22.2% | 26.8% | 38.0% | P8 |
| Occupancy | 17.9% | 34.8% | 51.3% | 68.9% | P6 |
| Rev/Bed | $721K | $552K | $947K | $1.5M | P36 |
| Exp/Bed | $-250K | $518K | $1.1M | $1.6M | P0 |
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.