Bridge Realization Estimate
ML model predicts what fraction of the bridge is achievable (accuracy: 60%, n=5,839)
Expected realization: 75% of modeled bridge. Strengths: Occupancy Rate, Revenue per Bed. Risk-adjusted uplift: $7.6M (vs $10.1M 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 | $3.8M | $3.8M | $0 | 12mo |
| Denial Rate Reduction | 12.0% DEFAULT | 6.5% BENCHMARK | $3.7M | $106K | $3.8M | $0 | 12mo |
| A/R Days Reduction | 52.00 DEFAULT | 38.00 BENCHMARK | $590K | $1.8M | $2.3M | $7.4M | 9mo |
| Clean Claim Rate | 88.0% DEFAULT | 96.0% BENCHMARK | $0 | $123K | $123K | $0 | 6mo |
| Net Collection Rate | 93.5% DEFAULT | 41.4% 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 | $962K | $1.9M | $2.9M | $3.8M | $3.8M | $3.8M | $3.8M |
| Denial Rate Reduction | $0 | $952K | $1.9M | $2.9M | $3.8M | $3.8M | $3.8M | $3.8M |
| A/R Days Reduction | $0 | $780K | $1.6M | $2.3M | $2.3M | $2.3M | $2.3M | $2.3M |
| Clean Claim Rate | $0 | $62K | $123K | $123K | $123K | $123K | $123K | $123K |
| Cumulative | $0 | $2.8M | $5.5M | $8.2M | $10.1M | $10.1M | $10.1M | $10.1M |
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 $10.1M is added at exit.
| Entry \ Exit | 9.0x | 10.0x | 11.0x | 11.5x | 12.0x |
|---|---|---|---|---|---|
| 8.0x | 49% / 7.2x | 53% / 8.4x | 57% / 9.6x | 59% / 10.1x | 61% / 10.7x |
| 9.0x | 43% / 6.1x | 48% / 7.1x | 52% / 8.1x | 54% / 8.7x | 56% / 9.2x |
| 10.0x | 39% / 5.1x | 43% / 6.1x | 48% / 7.0x | 49% / 7.5x | 51% / 7.9x |
| 11.0x | 34% / 4.4x | 39% / 5.2x | 43% / 6.1x | 45% / 6.5x | 47% / 6.9x |
| 12.0x | 30% / 3.7x | 35% / 4.5x | 40% / 5.3x | 42% / 5.7x | 43% / 6.1x |
Covenant Headroom (at 10x Entry, 6.5x Max Leverage)
Pro forma EBITDA can decline -2% before the 6.5x covenant trips. RCM uplift reduces leverage from 8.5x to 6.6x, adding 1.8 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 | $37.0M | — | $37.0M | 19.3% |
| Year 1 | $38.1M | +$6.7M | $44.9M | 23.3% |
| Year 2 | $39.3M | +$10.1M | $49.4M | 25.7% |
| Year 3 | $40.5M | +$10.1M | $50.6M | 26.3% |
| Year 4 | $41.7M | +$10.1M | $51.8M | 26.9% |
| Year 5 | $42.9M | +$10.1M | $53.1M | 27.6% |
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 | $1.9M | $2.9M | $3.8M | $4.6M |
| Denial Rate Reductio | $1.9M | $2.9M | $3.8M | $4.6M |
| A/R Days Reduction | $1.2M | $1.8M | $2.3M | $2.8M |
| Clean Claim Rate | $62K | $92K | $123K | $148K |
| Total | $5.1M | $7.6M | $10.1M | $12.1M |
Peer Context — Where This Hospital Sits
Key metrics vs 73 size-matched peers. Low percentile on margin/efficiency metrics = more room for improvement = larger bridge opportunity.
| Metric | Hospital | P25 | P50 | P75 | Percentile |
|---|---|---|---|---|---|
| Op Margin | 19.3% | -11.2% | 2.8% | 18.5% | P75 |
| Net-to-Gross | 24.0% | 25.2% | 31.4% | 41.4% | P17 |
| Occupancy | 77.1% | 39.4% | 52.4% | 65.7% | P85 |
| Rev/Bed | $2.6M | $399K | $1.2M | $2.0M | P83 |
| Exp/Bed | $2.1M | $365K | $1.2M | $1.9M | P79 |
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.