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: Occupancy Rate. Risks: Revenue per Bed. Risk-adjusted uplift: $4.2M (vs $6.1M 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 | $2.3M | $2.3M | $0 | 12mo |
| Denial Rate Reduction | 12.0% DEFAULT | 6.5% BENCHMARK | $2.2M | $64K | $2.3M | $0 | 12mo |
| A/R Days Reduction | 52.00 DEFAULT | 38.00 BENCHMARK | $355K | $1.1M | $1.4M | $4.4M | 9mo |
| Clean Claim Rate | 88.0% DEFAULT | 96.0% BENCHMARK | $0 | $74K | $74K | $0 | 6mo |
| Net Collection Rate | 93.5% DEFAULT | 32.8% 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 | $579K | $1.2M | $1.7M | $2.3M | $2.3M | $2.3M | $2.3M |
| Denial Rate Reduction | $0 | $573K | $1.1M | $1.7M | $2.3M | $2.3M | $2.3M | $2.3M |
| A/R Days Reduction | $0 | $469K | $939K | $1.4M | $1.4M | $1.4M | $1.4M | $1.4M |
| Clean Claim Rate | $0 | $37K | $74K | $74K | $74K | $74K | $74K | $74K |
| Cumulative | $0 | $1.7M | $3.3M | $4.9M | $6.1M | $6.1M | $6.1M | $6.1M |
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 $6.1M is added at exit.
| Entry \ Exit | 9.0x | 10.0x | 11.0x | 11.5x | 12.0x |
|---|---|---|---|---|---|
| 8.0x | 124% / 56.8x | 129% / 63.5x | 134% / 70.2x | 136% / 73.5x | 138% / 76.9x |
| 9.0x | 119% / 50.2x | 124% / 56.1x | 128% / 62.0x | 130% / 65.0x | 133% / 68.0x |
| 10.0x | 114% / 44.8x | 119% / 50.2x | 123% / 55.5x | 125% / 58.2x | 127% / 60.9x |
| 11.0x | 110% / 40.5x | 114% / 45.3x | 119% / 50.2x | 121% / 52.6x | 123% / 55.0x |
| 12.0x | 106% / 36.8x | 110% / 41.3x | 115% / 45.7x | 117% / 47.9x | 119% / 50.2x |
Covenant Headroom (at 10x Entry, 6.5x Max Leverage)
Pro forma EBITDA can decline 84% before the 6.5x covenant trips. RCM uplift reduces leverage from 8.5x to 1.1x, adding 7.4 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 | $863K | — | $863K | 0.7% |
| Year 1 | $889K | +$4.1M | $4.9M | 4.3% |
| Year 2 | $915K | +$6.1M | $7.0M | 6.1% |
| Year 3 | $943K | +$6.1M | $7.0M | 6.1% |
| Year 4 | $971K | +$6.1M | $7.1M | 6.1% |
| Year 5 | $1.0M | +$6.1M | $7.1M | 6.1% |
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 | $1.2M | $1.7M | $2.3M | $2.8M |
| Denial Rate Reductio | $1.1M | $1.7M | $2.3M | $2.7M |
| A/R Days Reduction | $704K | $1.1M | $1.4M | $1.7M |
| Clean Claim Rate | $37K | $56K | $74K | $89K |
| Total | $3.0M | $4.6M | $6.1M | $7.3M |
Peer Context — Where This Hospital Sits
Key metrics vs 100 size-matched peers. Low percentile on margin/efficiency metrics = more room for improvement = larger bridge opportunity.
| Metric | Hospital | P25 | P50 | P75 | Percentile |
|---|---|---|---|---|---|
| Op Margin | 0.7% | -20.8% | -7.8% | 3.3% | P69 |
| Net-to-Gross | 45.8% | 20.8% | 25.2% | 32.8% | P92 |
| Occupancy | 68.8% | 42.5% | 57.5% | 70.5% | P68 |
| Rev/Bed | $629K | $695K | $1.2M | $1.6M | P22 |
| Exp/Bed | $624K | $726K | $1.2M | $1.7M | P21 |
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.