Bridge Realization Estimate
ML model predicts what fraction of the bridge is achievable (accuracy: 60%, n=5,839)
Expected realization: 69% of modeled bridge. Strengths: Occupancy Rate. Risks: Bed Count. Risk-adjusted uplift: $25.8M (vs $37.7M 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 | $14.3M | $14.3M | $0 | 12mo |
| Denial Rate Reduction | 12.0% DEFAULT | 6.5% BENCHMARK | $13.8M | $394K | $14.2M | $0 | 12mo |
| A/R Days Reduction | 52.00 DEFAULT | 38.00 BENCHMARK | $2.2M | $6.5M | $8.7M | $27.5M | 9mo |
| Clean Claim Rate | 88.0% DEFAULT | 96.0% BENCHMARK | $0 | $458K | $458K | $0 | 6mo |
| Net Collection Rate | 93.5% DEFAULT | 29.5% 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 | $3.6M | $7.2M | $10.7M | $14.3M | $14.3M | $14.3M | $14.3M |
| Denial Rate Reduction | $0 | $3.5M | $7.1M | $10.6M | $14.2M | $14.2M | $14.2M | $14.2M |
| A/R Days Reduction | $0 | $2.9M | $5.8M | $8.7M | $8.7M | $8.7M | $8.7M | $8.7M |
| Clean Claim Rate | $0 | $229K | $458K | $458K | $458K | $458K | $458K | $458K |
| Cumulative | $0 | $10.3M | $20.5M | $30.5M | $37.7M | $37.7M | $37.7M | $37.7M |
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 $37.7M is added at exit.
| Entry \ Exit | 9.0x | 10.0x | 11.0x | 11.5x | 12.0x |
|---|---|---|---|---|---|
| 8.0x | 83% / 20.5x | 87% / 23.1x | 91% / 25.7x | 93% / 27.1x | 95% / 28.4x |
| 9.0x | 78% / 17.8x | 82% / 20.2x | 86% / 22.5x | 88% / 23.7x | 90% / 24.9x |
| 10.0x | 74% / 15.7x | 78% / 17.8x | 82% / 19.9x | 84% / 21.0x | 86% / 22.1x |
| 11.0x | 70% / 14.0x | 74% / 15.9x | 78% / 17.8x | 80% / 18.8x | 82% / 19.8x |
| 12.0x | 66% / 12.6x | 70% / 14.3x | 74% / 16.1x | 76% / 17.0x | 78% / 17.8x |
Covenant Headroom (at 10x Entry, 6.5x Max Leverage)
Pro forma EBITDA can decline 58% before the 6.5x covenant trips. RCM uplift reduces leverage from 8.5x to 2.7x, adding 5.7 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 | $18.1M | — | $18.1M | 2.5% |
| Year 1 | $18.6M | +$25.1M | $43.7M | 6.1% |
| Year 2 | $19.2M | +$37.7M | $56.8M | 7.9% |
| Year 3 | $19.7M | +$37.7M | $57.4M | 8.0% |
| Year 4 | $20.3M | +$37.7M | $58.0M | 8.1% |
| Year 5 | $20.9M | +$37.7M | $58.6M | 8.2% |
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 | $7.2M | $10.7M | $14.3M | $17.2M |
| Denial Rate Reductio | $7.1M | $10.6M | $14.2M | $17.0M |
| A/R Days Reduction | $4.4M | $6.5M | $8.7M | $10.5M |
| Clean Claim Rate | $229K | $344K | $458K | $550K |
| Total | $18.8M | $28.3M | $37.7M | $45.2M |
Peer Context — Where This Hospital Sits
Key metrics vs 29 size-matched peers. Low percentile on margin/efficiency metrics = more room for improvement = larger bridge opportunity.
| Metric | Hospital | P25 | P50 | P75 | Percentile |
|---|---|---|---|---|---|
| Op Margin | 2.5% | -12.4% | -5.2% | 3.0% | P66 |
| Net-to-Gross | 29.4% | 23.0% | 27.1% | 29.5% | P69 |
| Occupancy | 67.1% | 55.9% | 66.2% | 75.7% | P52 |
| Rev/Bed | $1.8M | $1.1M | $1.5M | $1.9M | P69 |
| Exp/Bed | $1.7M | $1.2M | $1.6M | $1.9M | 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.