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: Net-to-Gross Ratio. Risk-adjusted uplift: $6.4M (vs $9.4M 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 | $3.6M | $3.6M | $0 | 12mo |
| Denial Rate Reduction | 12.0% DEFAULT | 6.5% BENCHMARK | $3.4M | $98K | $3.5M | $0 | 12mo |
| A/R Days Reduction | 52.00 DEFAULT | 38.00 BENCHMARK | $548K | $1.6M | $2.2M | $6.8M | 9mo |
| Clean Claim Rate | 88.0% DEFAULT | 96.0% BENCHMARK | $0 | $114K | $114K | $0 | 6mo |
| Net Collection Rate | 93.5% DEFAULT | 37.6% 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 | $892K | $1.8M | $2.7M | $3.6M | $3.6M | $3.6M | $3.6M |
| Denial Rate Reduction | $0 | $883K | $1.8M | $2.6M | $3.5M | $3.5M | $3.5M | $3.5M |
| A/R Days Reduction | $0 | $724K | $1.4M | $2.2M | $2.2M | $2.2M | $2.2M | $2.2M |
| Clean Claim Rate | $0 | $57K | $114K | $114K | $114K | $114K | $114K | $114K |
| Cumulative | $0 | $2.6M | $5.1M | $7.6M | $9.4M | $9.4M | $9.4M | $9.4M |
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 $9.4M is added at exit.
| Entry \ Exit | 9.0x | 10.0x | 11.0x | 11.5x | 12.0x |
|---|---|---|---|---|---|
| 8.0x | 222% / 346.1x | 229% / 384.9x | 235% / 423.7x | 238% / 443.1x | 241% / 462.5x |
| 9.0x | 214% / 307.3x | 221% / 341.8x | 227% / 376.3x | 230% / 393.5x | 233% / 410.8x |
| 10.0x | 208% / 276.2x | 214% / 307.3x | 221% / 338.3x | 223% / 353.9x | 226% / 369.4x |
| 11.0x | 202% / 250.8x | 208% / 279.0x | 214% / 307.3x | 217% / 321.4x | 220% / 335.5x |
| 12.0x | 197% / 229.6x | 203% / 255.5x | 209% / 281.4x | 212% / 294.3x | 214% / 307.3x |
Covenant Headroom (at 10x Entry, 6.5x Max Leverage)
Pro forma EBITDA can decline 97% before the 6.5x covenant trips. RCM uplift reduces leverage from 8.5x to 0.2x, adding 8.3 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 | $201K | — | $201K | 0.1% |
| Year 1 | $207K | +$6.3M | $6.5M | 3.6% |
| Year 2 | $214K | +$9.4M | $9.6M | 5.4% |
| Year 3 | $220K | +$9.4M | $9.6M | 5.4% |
| Year 4 | $227K | +$9.4M | $9.6M | 5.4% |
| Year 5 | $233K | +$9.4M | $9.6M | 5.4% |
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 | $1.8M | $2.7M | $3.6M | $4.3M |
| Denial Rate Reductio | $1.8M | $2.6M | $3.5M | $4.2M |
| A/R Days Reduction | $1.1M | $1.6M | $2.2M | $2.6M |
| Clean Claim Rate | $57K | $86K | $114K | $137K |
| Total | $4.7M | $7.0M | $9.4M | $11.3M |
Peer Context — Where This Hospital Sits
Key metrics vs 56 size-matched peers. Low percentile on margin/efficiency metrics = more room for improvement = larger bridge opportunity.
| Metric | Hospital | P25 | P50 | P75 | Percentile |
|---|---|---|---|---|---|
| Op Margin | 0.1% | -13.5% | -6.7% | -0.2% | P76 |
| Net-to-Gross | 16.5% | 24.9% | 30.2% | 37.6% | P2 |
| Occupancy | 54.1% | 53.1% | 65.9% | 79.8% | P25 |
| Rev/Bed | $1.2M | $929K | $1.4M | $1.9M | P42 |
| Exp/Bed | $1.2M | $855K | $1.4M | $2.1M | P41 |
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.