Bridge Realization Estimate
ML model predicts what fraction of the bridge is achievable (accuracy: 60%, n=5,839)
Expected realization: 68% of modeled bridge. Strengths: Occupancy Rate. Risks: Bed Count, Commercial Payer %. Risk-adjusted uplift: $19.8M (vs $29.2M 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 | $11.1M | $11.1M | $0 | 12mo |
| Denial Rate Reduction | 12.0% DEFAULT | 6.5% BENCHMARK | $10.7M | $306K | $11.0M | $0 | 12mo |
| A/R Days Reduction | 52.00 DEFAULT | 38.00 BENCHMARK | $1.7M | $5.1M | $6.8M | $21.3M | 9mo |
| Clean Claim Rate | 88.0% DEFAULT | 96.0% BENCHMARK | $0 | $356K | $356K | $0 | 6mo |
| Net Collection Rate | 93.5% DEFAULT | 33.1% 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 | $2.8M | $5.6M | $8.3M | $11.1M | $11.1M | $11.1M | $11.1M |
| Denial Rate Reduction | $0 | $2.8M | $5.5M | $8.3M | $11.0M | $11.0M | $11.0M | $11.0M |
| A/R Days Reduction | $0 | $2.3M | $4.5M | $6.8M | $6.8M | $6.8M | $6.8M | $6.8M |
| Clean Claim Rate | $0 | $178K | $356K | $356K | $356K | $356K | $356K | $356K |
| Cumulative | $0 | $8.0M | $15.9M | $23.7M | $29.2M | $29.2M | $29.2M | $29.2M |
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 $29.2M is added at exit.
| Entry \ Exit | 9.0x | 10.0x | 11.0x | 11.5x | 12.0x |
|---|---|---|---|---|---|
| 8.0x | 225% / 364.6x | 232% / 405.5x | 239% / 446.4x | 242% / 466.8x | 245% / 487.3x |
| 9.0x | 218% / 323.8x | 225% / 360.1x | 231% / 396.4x | 234% / 414.6x | 237% / 432.8x |
| 10.0x | 211% / 291.1x | 218% / 323.8x | 224% / 356.5x | 227% / 372.8x | 230% / 389.2x |
| 11.0x | 205% / 264.3x | 212% / 294.0x | 218% / 323.8x | 221% / 338.6x | 223% / 353.5x |
| 12.0x | 200% / 242.0x | 206% / 269.3x | 212% / 296.5x | 215% / 310.1x | 218% / 323.8x |
Covenant Headroom (at 10x Entry, 6.5x Max Leverage)
Pro forma EBITDA can decline 97% before the 6.5x covenant trips. RCM uplift reduces leverage from 8.5x to 0.2x, adding 8.3 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 | $595K | — | $595K | 0.1% |
| Year 1 | $613K | +$19.5M | $20.1M | 3.6% |
| Year 2 | $631K | +$29.2M | $29.9M | 5.4% |
| Year 3 | $650K | +$29.2M | $29.9M | 5.4% |
| Year 4 | $670K | +$29.2M | $29.9M | 5.4% |
| Year 5 | $690K | +$29.2M | $29.9M | 5.4% |
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 | $5.6M | $8.3M | $11.1M | $13.3M |
| Denial Rate Reductio | $5.5M | $8.3M | $11.0M | $13.2M |
| A/R Days Reduction | $3.4M | $5.1M | $6.8M | $8.1M |
| Clean Claim Rate | $178K | $267K | $356K | $427K |
| Total | $14.6M | $21.9M | $29.2M | $35.1M |
Peer Context — Where This Hospital Sits
Key metrics vs 8 size-matched peers. Low percentile on margin/efficiency metrics = more room for improvement = larger bridge opportunity.
| Metric | Hospital | P25 | P50 | P75 | Percentile |
|---|---|---|---|---|---|
| Op Margin | 0.1% | -14.1% | -4.2% | 5.9% | P62 |
| Net-to-Gross | 19.5% | 18.5% | 21.8% | 27.6% | P25 |
| Occupancy | 57.7% | 41.4% | 51.6% | 62.8% | P50 |
| Rev/Bed | $1.8M | $1.2M | $1.3M | $1.7M | P75 |
| Exp/Bed | $1.8M | $1.0M | $1.3M | $1.8M | P62 |
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.