Bridge Realization Estimate
ML model predicts what fraction of the bridge is achievable (accuracy: 60%, n=5,839)
Expected realization: 74% of modeled bridge. Strengths: Occupancy Rate, Revenue per Bed. Risks: Net-to-Gross Ratio, Bed Count. Risk-adjusted uplift: $19.2M (vs $26.0M 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 | $9.9M | $9.9M | $0 | 12mo |
| Denial Rate Reduction | 12.0% DEFAULT | 6.5% BENCHMARK | $9.5M | $271K | $9.8M | $0 | 12mo |
| A/R Days Reduction | 52.00 DEFAULT | 38.00 BENCHMARK | $1.5M | $4.5M | $6.0M | $18.9M | 9mo |
| Clean Claim Rate | 88.0% DEFAULT | 96.0% BENCHMARK | $0 | $316K | $316K | $0 | 6mo |
| Net Collection Rate | 93.5% DEFAULT | 85.1% 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 | $2.5M | $4.9M | $7.4M | $9.9M | $9.9M | $9.9M | $9.9M |
| Denial Rate Reduction | $0 | $2.4M | $4.9M | $7.3M | $9.8M | $9.8M | $9.8M | $9.8M |
| A/R Days Reduction | $0 | $2.0M | $4.0M | $6.0M | $6.0M | $6.0M | $6.0M | $6.0M |
| Clean Claim Rate | $0 | $158K | $316K | $316K | $316K | $316K | $316K | $316K |
| Cumulative | $0 | $7.1M | $14.1M | $21.0M | $26.0M | $26.0M | $26.0M | $26.0M |
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 $26.0M is added at exit.
| Entry \ Exit | 9.0x | 10.0x | 11.0x | 11.5x | 12.0x |
|---|---|---|---|---|---|
| 8.0x | 122% / 53.5x | 127% / 59.8x | 131% / 66.1x | 133% / 69.2x | 135% / 72.4x |
| 9.0x | 116% / 47.2x | 121% / 52.8x | 126% / 58.4x | 128% / 61.2x | 130% / 64.0x |
| 10.0x | 111% / 42.1x | 116% / 47.2x | 121% / 52.2x | 123% / 54.8x | 125% / 57.3x |
| 11.0x | 107% / 38.0x | 112% / 42.6x | 116% / 47.2x | 118% / 49.5x | 120% / 51.8x |
| 12.0x | 103% / 34.6x | 108% / 38.8x | 112% / 43.0x | 114% / 45.1x | 116% / 47.2x |
Covenant Headroom (at 10x Entry, 6.5x Max Leverage)
Pro forma EBITDA can decline 83% before the 6.5x covenant trips. RCM uplift reduces leverage from 8.5x to 1.1x, adding 7.3 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 | $3.9M | — | $3.9M | 0.8% |
| Year 1 | $4.1M | +$17.3M | $21.4M | 4.3% |
| Year 2 | $4.2M | +$26.0M | $30.1M | 6.1% |
| Year 3 | $4.3M | +$26.0M | $30.3M | 6.1% |
| Year 4 | $4.4M | +$26.0M | $30.4M | 6.2% |
| Year 5 | $4.6M | +$26.0M | $30.5M | 6.2% |
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 | $4.9M | $7.4M | $9.9M | $11.8M |
| Denial Rate Reductio | $4.9M | $7.3M | $9.8M | $11.7M |
| A/R Days Reduction | $3.0M | $4.5M | $6.0M | $7.2M |
| Clean Claim Rate | $158K | $237K | $316K | $379K |
| Total | $13.0M | $19.5M | $26.0M | $31.1M |
Peer Context — Where This Hospital Sits
Key metrics vs 34 size-matched peers. Low percentile on margin/efficiency metrics = more room for improvement = larger bridge opportunity.
| Metric | Hospital | P25 | P50 | P75 | Percentile |
|---|---|---|---|---|---|
| Op Margin | 0.8% | -13.8% | -8.3% | -3.3% | P88 |
| Net-to-Gross | 84.4% | 81.8% | 84.0% | 85.1% | P55 |
| Occupancy | 87.7% | 69.5% | 74.7% | 78.3% | P91 |
| Rev/Bed | $2.1M | $1.3M | $1.5M | $1.6M | P91 |
| Exp/Bed | $2.1M | $1.4M | $1.6M | $2.0M | P79 |
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.