Bridge Realization Estimate
ML model predicts what fraction of the bridge is achievable (accuracy: 60%, n=5,839)
Expected realization: 93% of modeled bridge. Strengths: Revenue per Bed, Bed Count. Risks: Occupancy Rate. Risk-adjusted uplift: $8.5M (vs $9.1M 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 |
|---|---|---|---|---|---|---|---|
| Net Collection Rate | 93.5% DEFAULT | 97.0% BENCHMARK | $2.6M | $0 | $2.6M | $0 | 18mo |
| Cost to Collect | 4.5% DEFAULT | 2.5% BENCHMARK | $0 | $2.5M | $2.5M | $0 | 12mo |
| Denial Rate Reduction | 12.0% DEFAULT | 6.5% BENCHMARK | $2.4M | $68K | $2.5M | $0 | 12mo |
| A/R Days Reduction | 52.00 DEFAULT | 38.00 BENCHMARK | $381K | $1.1M | $1.5M | $4.8M | 9mo |
| Clean Claim Rate | 88.0% DEFAULT | 96.0% BENCHMARK | $0 | $79K | $79K | $0 | 6mo |
| 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 |
|---|---|---|---|---|---|---|---|---|
| Net Collection Rate | $0 | $435K | $870K | $1.3M | $1.7M | $2.6M | $2.6M | $2.6M |
| Cost to Collect | $0 | $621K | $1.2M | $1.9M | $2.5M | $2.5M | $2.5M | $2.5M |
| Denial Rate Reduction | $0 | $615K | $1.2M | $1.8M | $2.5M | $2.5M | $2.5M | $2.5M |
| A/R Days Reduction | $0 | $504K | $1.0M | $1.5M | $1.5M | $1.5M | $1.5M | $1.5M |
| Clean Claim Rate | $0 | $40K | $79K | $79K | $79K | $79K | $79K | $79K |
| Cumulative | $0 | $2.2M | $4.4M | $6.6M | $8.3M | $9.1M | $9.1M | $9.1M |
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 $9.1M is added at exit.
| Entry \ Exit | 9.0x | 10.0x | 11.0x | 11.5x | 12.0x |
|---|---|---|---|---|---|
| 8.0x | 87% / 22.9x | 92% / 25.8x | 96% / 28.6x | 98% / 30.1x | 99% / 31.6x |
| 9.0x | 82% / 19.9x | 86% / 22.5x | 91% / 25.1x | 92% / 26.4x | 94% / 27.7x |
| 10.0x | 78% / 17.6x | 82% / 19.9x | 86% / 22.3x | 88% / 23.4x | 90% / 24.6x |
| 11.0x | 74% / 15.7x | 78% / 17.8x | 82% / 19.9x | 84% / 21.0x | 86% / 22.1x |
| 12.0x | 70% / 14.2x | 74% / 16.1x | 78% / 18.0x | 80% / 19.0x | 82% / 19.9x |
Covenant Headroom (at 10x Entry, 6.5x Max Leverage)
Pro forma EBITDA can decline 62% before the 6.5x covenant trips. RCM uplift reduces leverage from 8.5x to 2.5x, adding 6.0 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 | $3.8M | — | $3.8M | 3.1% |
| Year 1 | $3.9M | +$6.1M | $10.0M | 8.1% |
| Year 2 | $4.0M | +$9.1M | $13.2M | 10.6% |
| Year 3 | $4.1M | +$9.1M | $13.3M | 10.7% |
| Year 4 | $4.3M | +$9.1M | $13.4M | 10.8% |
| Year 5 | $4.4M | +$9.1M | $13.5M | 10.9% |
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% |
|---|---|---|---|---|
| Net Collection Rate | $1.3M | $2.0M | $2.6M | $3.1M |
| Cost to Collect | $1.2M | $1.9M | $2.5M | $3.0M |
| Denial Rate Reductio | $1.2M | $1.8M | $2.5M | $3.0M |
| A/R Days Reduction | $756K | $1.1M | $1.5M | $1.8M |
| Clean Claim Rate | $40K | $60K | $79K | $95K |
| Total | $4.6M | $6.9M | $9.1M | $11.0M |
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.