Bridge Realization Estimate
ML model predicts what fraction of the bridge is achievable (accuracy: 60%, n=5,839)
Expected realization: 64% of modeled bridge. Risks: Revenue per Bed, Net-to-Gross Ratio. Risk-adjusted uplift: $0.5M (vs $0.8M 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 | $286K | $286K | $0 | 12mo |
| Denial Rate Reduction | 12.0% DEFAULT | 6.5% BENCHMARK | $275K | $8K | $283K | $0 | 12mo |
| A/R Days Reduction | 52.00 DEFAULT | 38.00 BENCHMARK | $44K | $130K | $174K | $548K | 9mo |
| Clean Claim Rate | 88.0% DEFAULT | 96.0% BENCHMARK | $0 | $10K | $10K | $0 | 6mo |
| Net Collection Rate | 93.5% DEFAULT | 36.7% 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 | $71K | $143K | $214K | $286K | $286K | $286K | $286K |
| Denial Rate Reduction | $0 | $71K | $142K | $213K | $283K | $283K | $283K | $283K |
| A/R Days Reduction | $0 | $58K | $116K | $174K | $174K | $174K | $174K | $174K |
| Clean Claim Rate | $0 | $5K | $10K | $10K | $10K | $10K | $10K | $10K |
| Cumulative | $0 | $205K | $410K | $611K | $753K | $753K | $753K | $753K |
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 $753K is added at exit.
| Entry \ Exit | 9.0x | 10.0x | 11.0x | 11.5x | 12.0x |
|---|---|---|---|---|---|
| 8.0x | 57% / 9.5x | 61% / 10.9x | 65% / 12.3x | 67% / 13.0x | 69% / 13.8x |
| 9.0x | 52% / 8.1x | 56% / 9.3x | 60% / 10.6x | 62% / 11.2x | 64% / 11.9x |
| 10.0x | 47% / 7.0x | 52% / 8.1x | 56% / 9.2x | 58% / 9.8x | 60% / 10.3x |
| 11.0x | 43% / 6.0x | 48% / 7.1x | 52% / 8.1x | 54% / 8.6x | 56% / 9.1x |
| 12.0x | 39% / 5.2x | 44% / 6.2x | 48% / 7.1x | 50% / 7.6x | 52% / 8.1x |
Covenant Headroom (at 10x Entry, 6.5x Max Leverage)
Pro forma EBITDA can decline 18% before the 6.5x covenant trips. RCM uplift reduces leverage from 8.5x to 5.3x, adding 3.1 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 | $1.3M | — | $1.3M | 9.0% |
| Year 1 | $1.3M | +$502K | $1.8M | 12.8% |
| Year 2 | $1.4M | +$753K | $2.1M | 14.8% |
| Year 3 | $1.4M | +$753K | $2.2M | 15.1% |
| Year 4 | $1.5M | +$753K | $2.2M | 15.4% |
| Year 5 | $1.5M | +$753K | $2.2M | 15.7% |
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 | $143K | $214K | $286K | $343K |
| Denial Rate Reductio | $142K | $213K | $283K | $340K |
| A/R Days Reduction | $87K | $130K | $174K | $209K |
| Clean Claim Rate | $5K | $7K | $10K | $12K |
| Total | $376K | $565K | $753K | $904K |
Peer Context — Where This Hospital Sits
Key metrics vs 66 size-matched peers. Low percentile on margin/efficiency metrics = more room for improvement = larger bridge opportunity.
| Metric | Hospital | P25 | P50 | P75 | Percentile |
|---|---|---|---|---|---|
| Op Margin | 9.0% | -11.6% | 1.4% | 18.2% | P62 |
| Net-to-Gross | 68.2% | 24.6% | 30.3% | 36.7% | P95 |
| Occupancy | 49.6% | 42.1% | 52.9% | 66.9% | P44 |
| Rev/Bed | $177K | $404K | $1.3M | $2.0M | P2 |
| Exp/Bed | $161K | $355K | $1.3M | $1.8M | P2 |
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.