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: Bed Count. Risks: Net-to-Gross Ratio. Risk-adjusted uplift: $1.2M (vs $1.8M 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 | $694K | $694K | $0 | 12mo |
| Denial Rate Reduction | 12.0% DEFAULT | 6.5% BENCHMARK | $668K | $19K | $687K | $0 | 12mo |
| A/R Days Reduction | 52.00 DEFAULT | 38.00 BENCHMARK | $106K | $316K | $422K | $1.3M | 9mo |
| Clean Claim Rate | 88.0% DEFAULT | 96.0% BENCHMARK | $0 | $22K | $22K | $0 | 6mo |
| Net Collection Rate | 93.5% DEFAULT | 58.1% 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 | $173K | $347K | $520K | $694K | $694K | $694K | $694K |
| Denial Rate Reduction | $0 | $172K | $343K | $515K | $687K | $687K | $687K | $687K |
| A/R Days Reduction | $0 | $141K | $281K | $422K | $422K | $422K | $422K | $422K |
| Clean Claim Rate | $0 | $11K | $22K | $22K | $22K | $22K | $22K | $22K |
| Cumulative | $0 | $497K | $994K | $1.5M | $1.8M | $1.8M | $1.8M | $1.8M |
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 $1.8M is added at exit.
| Entry \ Exit | 9.0x | 10.0x | 11.0x | 11.5x | 12.0x |
|---|---|---|---|---|---|
| 8.0x | 61% / 10.9x | 66% / 12.5x | 70% / 14.1x | 71% / 14.8x | 73% / 15.6x |
| 9.0x | 56% / 9.3x | 61% / 10.7x | 65% / 12.1x | 67% / 12.8x | 68% / 13.5x |
| 10.0x | 52% / 8.1x | 56% / 9.3x | 60% / 10.6x | 62% / 11.2x | 64% / 11.8x |
| 11.0x | 48% / 7.0x | 52% / 8.2x | 56% / 9.3x | 58% / 9.9x | 60% / 10.5x |
| 12.0x | 44% / 6.2x | 49% / 7.2x | 53% / 8.3x | 55% / 8.8x | 56% / 9.3x |
Covenant Headroom (at 10x Entry, 6.5x Max Leverage)
Pro forma EBITDA can decline 27% before the 6.5x covenant trips. RCM uplift reduces leverage from 8.5x to 4.8x, adding 3.7 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 | $2.4M | — | $2.4M | 6.8% |
| Year 1 | $2.4M | +$1.2M | $3.6M | 10.5% |
| Year 2 | $2.5M | +$1.8M | $4.3M | 12.5% |
| Year 3 | $2.6M | +$1.8M | $4.4M | 12.7% |
| Year 4 | $2.6M | +$1.8M | $4.5M | 12.9% |
| Year 5 | $2.7M | +$1.8M | $4.6M | 13.1% |
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 | $347K | $520K | $694K | $832K |
| Denial Rate Reductio | $343K | $515K | $687K | $824K |
| A/R Days Reduction | $211K | $317K | $422K | $506K |
| Clean Claim Rate | $11K | $17K | $22K | $27K |
| Total | $912K | $1.4M | $1.8M | $2.2M |
Peer Context — Where This Hospital Sits
Key metrics vs 138 size-matched peers. Low percentile on margin/efficiency metrics = more room for improvement = larger bridge opportunity.
| Metric | Hospital | P25 | P50 | P75 | Percentile |
|---|---|---|---|---|---|
| Op Margin | 6.8% | -16.7% | -2.7% | 6.1% | P76 |
| Net-to-Gross | 61.4% | 31.7% | 43.7% | 58.1% | P78 |
| Occupancy | 53.8% | 21.1% | 46.4% | 68.5% | P58 |
| Rev/Bed | $1.2M | $282K | $460K | $868K | P84 |
| Exp/Bed | $1.1M | $272K | $457K | $963K | P78 |
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.