Bridge Realization Estimate
ML model predicts what fraction of the bridge is achievable (accuracy: 60%, n=5,839)
Expected realization: 72% of modeled bridge. Strengths: Occupancy Rate, Commercial Payer %. Risk-adjusted uplift: $8.6M (vs $12.1M 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 | $4.6M | $4.6M | $0 | 12mo |
| Denial Rate Reduction | 12.0% DEFAULT | 6.5% BENCHMARK | $4.4M | $126K | $4.5M | $0 | 12mo |
| A/R Days Reduction | 52.00 DEFAULT | 38.00 BENCHMARK | $704K | $2.1M | $2.8M | $8.8M | 9mo |
| Clean Claim Rate | 88.0% DEFAULT | 96.0% BENCHMARK | $0 | $147K | $147K | $0 | 6mo |
| Net Collection Rate | 93.5% DEFAULT | 28.2% 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 | $1.1M | $2.3M | $3.4M | $4.6M | $4.6M | $4.6M | $4.6M |
| Denial Rate Reduction | $0 | $1.1M | $2.3M | $3.4M | $4.5M | $4.5M | $4.5M | $4.5M |
| A/R Days Reduction | $0 | $930K | $1.9M | $2.8M | $2.8M | $2.8M | $2.8M | $2.8M |
| Clean Claim Rate | $0 | $73K | $147K | $147K | $147K | $147K | $147K | $147K |
| Cumulative | $0 | $3.3M | $6.6M | $9.8M | $12.1M | $12.1M | $12.1M | $12.1M |
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 $12.1M is added at exit.
| Entry \ Exit | 9.0x | 10.0x | 11.0x | 11.5x | 12.0x |
|---|---|---|---|---|---|
| 8.0x | 125% / 57.8x | 130% / 64.6x | 135% / 71.3x | 137% / 74.7x | 139% / 78.1x |
| 9.0x | 120% / 51.0x | 125% / 57.0x | 129% / 63.1x | 131% / 66.1x | 133% / 69.1x |
| 10.0x | 115% / 45.6x | 120% / 51.0x | 124% / 56.4x | 126% / 59.1x | 128% / 61.9x |
| 11.0x | 110% / 41.1x | 115% / 46.1x | 120% / 51.0x | 122% / 53.5x | 124% / 55.9x |
| 12.0x | 106% / 37.4x | 111% / 42.0x | 116% / 46.5x | 118% / 48.7x | 120% / 51.0x |
Covenant Headroom (at 10x Entry, 6.5x Max Leverage)
Pro forma EBITDA can decline 84% before the 6.5x covenant trips. RCM uplift reduces leverage from 8.5x to 1.0x, adding 7.4 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 | $1.7M | — | $1.7M | 0.7% |
| Year 1 | $1.7M | +$8.0M | $9.8M | 4.3% |
| Year 2 | $1.8M | +$12.1M | $13.8M | 6.0% |
| Year 3 | $1.8M | +$12.1M | $13.9M | 6.1% |
| Year 4 | $1.9M | +$12.1M | $14.0M | 6.1% |
| Year 5 | $1.9M | +$12.1M | $14.0M | 6.1% |
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 | $2.3M | $3.4M | $4.6M | $5.5M |
| Denial Rate Reductio | $2.3M | $3.4M | $4.5M | $5.5M |
| A/R Days Reduction | $1.4M | $2.1M | $2.8M | $3.3M |
| Clean Claim Rate | $73K | $110K | $147K | $176K |
| Total | $6.0M | $9.1M | $12.1M | $14.5M |
Peer Context — Where This Hospital Sits
Key metrics vs 23 size-matched peers. Low percentile on margin/efficiency metrics = more room for improvement = larger bridge opportunity.
| Metric | Hospital | P25 | P50 | P75 | Percentile |
|---|---|---|---|---|---|
| Op Margin | 0.7% | -15.0% | -4.9% | 0.8% | P68 |
| Net-to-Gross | 23.3% | 9.7% | 17.3% | 28.2% | P64 |
| Occupancy | 71.8% | 32.2% | 42.1% | 59.4% | P83 |
| Rev/Bed | $1.2M | $483K | $737K | $1.1M | P82 |
| Exp/Bed | $1.2M | $469K | $730K | $1.1M | P78 |
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.