Bridge Realization Estimate
ML model predicts what fraction of the bridge is achievable (accuracy: 60%, n=5,839)
Expected realization: 64% of modeled bridge. Strengths: Bed Count, Net-to-Gross Ratio. Risks: Occupancy Rate. Risk-adjusted uplift: $2.1M (vs $3.2M 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 | $1.2M | $1.2M | $0 | 12mo |
| Denial Rate Reduction | 12.0% DEFAULT | 6.5% BENCHMARK | $1.2M | $34K | $1.2M | $0 | 12mo |
| A/R Days Reduction | 52.00 DEFAULT | 38.00 BENCHMARK | $187K | $556K | $743K | $2.3M | 9mo |
| Clean Claim Rate | 88.0% DEFAULT | 96.0% BENCHMARK | $0 | $39K | $39K | $0 | 6mo |
| Net Collection Rate | 93.5% DEFAULT | 56.1% 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 | $305K | $611K | $916K | $1.2M | $1.2M | $1.2M | $1.2M |
| Denial Rate Reduction | $0 | $302K | $605K | $907K | $1.2M | $1.2M | $1.2M | $1.2M |
| A/R Days Reduction | $0 | $248K | $496K | $743K | $743K | $743K | $743K | $743K |
| Clean Claim Rate | $0 | $20K | $39K | $39K | $39K | $39K | $39K | $39K |
| Cumulative | $0 | $875K | $1.8M | $2.6M | $3.2M | $3.2M | $3.2M | $3.2M |
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 $3.2M is added at exit.
| Entry \ Exit | 9.0x | 10.0x | 11.0x | 11.5x | 12.0x |
|---|---|---|---|---|---|
| 8.0x | 83% / 20.4x | 87% / 23.0x | 91% / 25.6x | 93% / 26.9x | 95% / 28.3x |
| 9.0x | 78% / 17.8x | 82% / 20.1x | 86% / 22.4x | 88% / 23.6x | 90% / 24.8x |
| 10.0x | 73% / 15.7x | 78% / 17.8x | 82% / 19.9x | 84% / 20.9x | 85% / 22.0x |
| 11.0x | 69% / 13.9x | 74% / 15.8x | 78% / 17.8x | 80% / 18.7x | 81% / 19.7x |
| 12.0x | 66% / 12.5x | 70% / 14.3x | 74% / 16.0x | 76% / 16.9x | 78% / 17.8x |
Covenant Headroom (at 10x Entry, 6.5x Max Leverage)
Pro forma EBITDA can decline 58% before the 6.5x covenant trips. RCM uplift reduces leverage from 8.5x to 2.8x, adding 5.7 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 | $1.6M | — | $1.6M | 2.5% |
| Year 1 | $1.6M | +$2.1M | $3.7M | 6.1% |
| Year 2 | $1.6M | +$3.2M | $4.9M | 8.0% |
| Year 3 | $1.7M | +$3.2M | $4.9M | 8.0% |
| Year 4 | $1.7M | +$3.2M | $5.0M | 8.1% |
| Year 5 | $1.8M | +$3.2M | $5.0M | 8.2% |
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 | $611K | $916K | $1.2M | $1.5M |
| Denial Rate Reductio | $605K | $907K | $1.2M | $1.5M |
| A/R Days Reduction | $372K | $557K | $743K | $892K |
| Clean Claim Rate | $20K | $29K | $39K | $47K |
| Total | $1.6M | $2.4M | $3.2M | $3.9M |
Peer Context — Where This Hospital Sits
Key metrics vs 126 size-matched peers. Low percentile on margin/efficiency metrics = more room for improvement = larger bridge opportunity.
| Metric | Hospital | P25 | P50 | P75 | Percentile |
|---|---|---|---|---|---|
| Op Margin | 2.5% | -21.2% | -3.8% | 4.9% | P66 |
| Net-to-Gross | 15.7% | 31.5% | 42.0% | 56.1% | P2 |
| Occupancy | 29.1% | 21.3% | 46.5% | 65.1% | P35 |
| Rev/Bed | $1.6M | $273K | $435K | $868K | P93 |
| Exp/Bed | $1.5M | $261K | $442K | $965K | P89 |
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.