Bridge Realization Estimate
ML model predicts what fraction of the bridge is achievable (accuracy: 60%, n=5,839)
Expected realization: 71% of modeled bridge. Strengths: Occupancy Rate. Risks: Bed Count. Risk-adjusted uplift: $28.1M (vs $39.3M 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 | $14.9M | $14.9M | $0 | 12mo |
| Denial Rate Reduction | 12.0% DEFAULT | 6.5% BENCHMARK | $14.4M | $411K | $14.8M | $0 | 12mo |
| A/R Days Reduction | 52.00 DEFAULT | 38.00 BENCHMARK | $2.3M | $6.8M | $9.1M | $28.7M | 9mo |
| Clean Claim Rate | 88.0% DEFAULT | 96.0% BENCHMARK | $0 | $478K | $478K | $0 | 6mo |
| Net Collection Rate | 93.5% DEFAULT | 32.7% 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 | $3.7M | $7.5M | $11.2M | $14.9M | $14.9M | $14.9M | $14.9M |
| Denial Rate Reduction | $0 | $3.7M | $7.4M | $11.1M | $14.8M | $14.8M | $14.8M | $14.8M |
| A/R Days Reduction | $0 | $3.0M | $6.1M | $9.1M | $9.1M | $9.1M | $9.1M | $9.1M |
| Clean Claim Rate | $0 | $239K | $478K | $478K | $478K | $478K | $478K | $478K |
| Cumulative | $0 | $10.7M | $21.4M | $31.9M | $39.3M | $39.3M | $39.3M | $39.3M |
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 $39.3M is added at exit.
| Entry \ Exit | 9.0x | 10.0x | 11.0x | 11.5x | 12.0x |
|---|---|---|---|---|---|
| 8.0x | 85% / 21.7x | 89% / 24.4x | 94% / 27.2x | 96% / 28.6x | 97% / 30.0x |
| 9.0x | 80% / 18.9x | 84% / 21.4x | 89% / 23.8x | 90% / 25.1x | 92% / 26.3x |
| 10.0x | 76% / 16.7x | 80% / 18.9x | 84% / 21.1x | 86% / 22.2x | 88% / 23.3x |
| 11.0x | 72% / 14.9x | 76% / 16.9x | 80% / 18.9x | 82% / 19.9x | 84% / 20.9x |
| 12.0x | 68% / 13.4x | 72% / 15.2x | 76% / 17.1x | 78% / 18.0x | 80% / 18.9x |
Covenant Headroom (at 10x Entry, 6.5x Max Leverage)
Pro forma EBITDA can decline 60% before the 6.5x covenant trips. RCM uplift reduces leverage from 8.5x to 2.6x, adding 5.9 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 | $17.5M | — | $17.5M | 2.3% |
| Year 1 | $18.0M | +$26.2M | $44.2M | 5.9% |
| Year 2 | $18.6M | +$39.3M | $57.9M | 7.7% |
| Year 3 | $19.1M | +$39.3M | $58.4M | 7.8% |
| Year 4 | $19.7M | +$39.3M | $59.0M | 7.9% |
| Year 5 | $20.3M | +$39.3M | $59.6M | 8.0% |
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 | $7.5M | $11.2M | $14.9M | $17.9M |
| Denial Rate Reductio | $7.4M | $11.1M | $14.8M | $17.8M |
| A/R Days Reduction | $4.5M | $6.8M | $9.1M | $10.9M |
| Clean Claim Rate | $239K | $359K | $478K | $574K |
| Total | $19.7M | $29.5M | $39.3M | $47.2M |
Peer Context — Where This Hospital Sits
Key metrics vs 26 size-matched peers. Low percentile on margin/efficiency metrics = more room for improvement = larger bridge opportunity.
| Metric | Hospital | P25 | P50 | P75 | Percentile |
|---|---|---|---|---|---|
| Op Margin | 2.3% | -10.4% | -7.1% | -2.2% | P96 |
| Net-to-Gross | 21.5% | 27.0% | 30.2% | 32.7% | P12 |
| Occupancy | 84.2% | 65.5% | 75.6% | 79.1% | P88 |
| Rev/Bed | $1.5M | $1.2M | $1.6M | $2.1M | P46 |
| Exp/Bed | $1.5M | $1.3M | $1.6M | $2.2M | P38 |
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.