Bridge Realization Estimate
ML model predicts what fraction of the bridge is achievable (accuracy: 60%, n=5,839)
Expected realization: 63% of modeled bridge. Strengths: Net-to-Gross Ratio. Risks: Occupancy Rate, Revenue per Bed. Risk-adjusted uplift: $2.7M (vs $4.3M 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 | $1.6M | $45K | $1.6M | $0 | 12mo |
| A/R Days Reduction | 52.00 DEFAULT | 38.00 BENCHMARK | $250K | $742K | $992K | $3.1M | 9mo |
| Clean Claim Rate | 88.0% DEFAULT | 96.0% BENCHMARK | $0 | $52K | $52K | $0 | 6mo |
| Net Collection Rate | 93.5% DEFAULT | 42.5% 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 | $408K | $816K | $1.2M | $1.6M | $1.6M | $1.6M | $1.6M |
| Denial Rate Reduction | $0 | $404K | $807K | $1.2M | $1.6M | $1.6M | $1.6M | $1.6M |
| A/R Days Reduction | $0 | $331K | $662K | $992K | $992K | $992K | $992K | $992K |
| Clean Claim Rate | $0 | $26K | $52K | $52K | $52K | $52K | $52K | $52K |
| Cumulative | $0 | $1.2M | $2.3M | $3.5M | $4.3M | $4.3M | $4.3M | $4.3M |
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 $4.3M is added at exit.
| Entry \ Exit | 9.0x | 10.0x | 11.0x | 11.5x | 12.0x |
|---|---|---|---|---|---|
| 8.0x | 87% / 22.8x | 91% / 25.7x | 96% / 28.6x | 98% / 30.1x | 99% / 31.5x |
| 9.0x | 82% / 19.9x | 86% / 22.5x | 90% / 25.1x | 92% / 26.4x | 94% / 27.7x |
| 10.0x | 77% / 17.6x | 82% / 19.9x | 86% / 22.2x | 88% / 23.4x | 90% / 24.6x |
| 11.0x | 73% / 15.7x | 78% / 17.8x | 82% / 19.9x | 84% / 21.0x | 86% / 22.0x |
| 12.0x | 70% / 14.1x | 74% / 16.1x | 78% / 18.0x | 80% / 19.0x | 82% / 19.9x |
Covenant Headroom (at 10x Entry, 6.5x Max Leverage)
Pro forma EBITDA can decline 62% before the 6.5x covenant trips. RCM uplift reduces leverage from 8.5x to 2.5x, adding 6.0 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 | $1.8M | — | $1.8M | 2.2% |
| Year 1 | $1.8M | +$2.9M | $4.7M | 5.8% |
| Year 2 | $1.9M | +$4.3M | $6.2M | 7.6% |
| Year 3 | $1.9M | +$4.3M | $6.2M | 7.6% |
| Year 4 | $2.0M | +$4.3M | $6.3M | 7.7% |
| Year 5 | $2.1M | +$4.3M | $6.4M | 7.8% |
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 | $816K | $1.2M | $1.6M | $2.0M |
| Denial Rate Reductio | $807K | $1.2M | $1.6M | $1.9M |
| A/R Days Reduction | $496K | $744K | $992K | $1.2M |
| Clean Claim Rate | $26K | $39K | $52K | $63K |
| Total | $2.1M | $3.2M | $4.3M | $5.1M |
Peer Context — Where This Hospital Sits
Key metrics vs 50 size-matched peers. Low percentile on margin/efficiency metrics = more room for improvement = larger bridge opportunity.
| Metric | Hospital | P25 | P50 | P75 | Percentile |
|---|---|---|---|---|---|
| Op Margin | 2.2% | -25.1% | -3.4% | 4.2% | P65 |
| Net-to-Gross | 12.4% | 22.8% | 32.2% | 42.6% | P0 |
| Occupancy | 28.4% | 29.6% | 50.0% | 63.3% | P20 |
| Rev/Bed | $927K | $263K | $459K | $927K | P73 |
| Exp/Bed | $907K | $211K | $441K | $1.2M | P66 |
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.