Bridge Realization Estimate
ML model predicts what fraction of the bridge is achievable (accuracy: 60%, n=5,839)
Expected realization: 72% of modeled bridge. Strengths: Occupancy Rate. Risks: Revenue per Bed. Risk-adjusted uplift: $3.0M (vs $4.2M 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 | $1.6M | $1.6M | $0 | 12mo |
| Denial Rate Reduction | 12.0% DEFAULT | 6.5% BENCHMARK | $1.5M | $44K | $1.6M | $0 | 12mo |
| A/R Days Reduction | 52.00 DEFAULT | 38.00 BENCHMARK | $245K | $727K | $973K | $3.1M | 9mo |
| Clean Claim Rate | 88.0% DEFAULT | 96.0% BENCHMARK | $0 | $51K | $51K | $0 | 6mo |
| Net Collection Rate | 93.5% DEFAULT | 34.9% 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 | $400K | $799K | $1.2M | $1.6M | $1.6M | $1.6M | $1.6M |
| Denial Rate Reduction | $0 | $396K | $791K | $1.2M | $1.6M | $1.6M | $1.6M | $1.6M |
| A/R Days Reduction | $0 | $324K | $649K | $973K | $973K | $973K | $973K | $973K |
| Clean Claim Rate | $0 | $26K | $51K | $51K | $51K | $51K | $51K | $51K |
| Cumulative | $0 | $1.1M | $2.3M | $3.4M | $4.2M | $4.2M | $4.2M | $4.2M |
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 $4.2M is added at exit.
| Entry \ Exit | 9.0x | 10.0x | 11.0x | 11.5x | 12.0x |
|---|---|---|---|---|---|
| 8.0x | 130% / 64.4x | 135% / 71.9x | 140% / 79.4x | 142% / 83.1x | 144% / 86.9x |
| 9.0x | 124% / 56.9x | 129% / 63.5x | 134% / 70.2x | 136% / 73.5x | 138% / 76.9x |
| 10.0x | 119% / 50.8x | 124% / 56.9x | 129% / 62.9x | 131% / 65.9x | 133% / 68.9x |
| 11.0x | 115% / 45.9x | 120% / 51.4x | 124% / 56.9x | 126% / 59.6x | 129% / 62.3x |
| 12.0x | 111% / 41.8x | 116% / 46.8x | 120% / 51.8x | 122% / 54.4x | 124% / 56.9x |
Covenant Headroom (at 10x Entry, 6.5x Max Leverage)
Pro forma EBITDA can decline 86% before the 6.5x covenant trips. RCM uplift reduces leverage from 8.5x to 0.9x, adding 7.5 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 | $520K | — | $520K | 0.7% |
| Year 1 | $536K | +$2.8M | $3.3M | 4.2% |
| Year 2 | $552K | +$4.2M | $4.8M | 6.0% |
| Year 3 | $568K | +$4.2M | $4.8M | 6.0% |
| Year 4 | $585K | +$4.2M | $4.8M | 6.0% |
| Year 5 | $603K | +$4.2M | $4.8M | 6.0% |
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 | $799K | $1.2M | $1.6M | $1.9M |
| Denial Rate Reductio | $791K | $1.2M | $1.6M | $1.9M |
| A/R Days Reduction | $486K | $730K | $973K | $1.2M |
| Clean Claim Rate | $26K | $38K | $51K | $61K |
| Total | $2.1M | $3.2M | $4.2M | $5.0M |
Peer Context — Where This Hospital Sits
Key metrics vs 37 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% | -9.6% | 0.1% | 8.8% | P51 |
| Net-to-Gross | 45.9% | 18.5% | 30.7% | 34.9% | P78 |
| Occupancy | 81.7% | 46.0% | 54.0% | 63.7% | P92 |
| Rev/Bed | $506K | $506K | $1.2M | $1.6M | P24 |
| Exp/Bed | $503K | $522K | $1.3M | $1.5M | P22 |
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.