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: Occupancy Rate. Risks: Commercial Payer %. Risk-adjusted uplift: $6.7M (vs $9.9M 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 | $3.8M | $3.8M | $0 | 12mo |
| Denial Rate Reduction | 12.0% DEFAULT | 6.5% BENCHMARK | $3.6M | $103K | $3.7M | $0 | 12mo |
| A/R Days Reduction | 52.00 DEFAULT | 38.00 BENCHMARK | $576K | $1.7M | $2.3M | $7.2M | 9mo |
| Clean Claim Rate | 88.0% DEFAULT | 96.0% BENCHMARK | $0 | $120K | $120K | $0 | 6mo |
| Net Collection Rate | 93.5% DEFAULT | 38.8% 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 | $939K | $1.9M | $2.8M | $3.8M | $3.8M | $3.8M | $3.8M |
| Denial Rate Reduction | $0 | $930K | $1.9M | $2.8M | $3.7M | $3.7M | $3.7M | $3.7M |
| A/R Days Reduction | $0 | $762K | $1.5M | $2.3M | $2.3M | $2.3M | $2.3M | $2.3M |
| Clean Claim Rate | $0 | $60K | $120K | $120K | $120K | $120K | $120K | $120K |
| Cumulative | $0 | $2.7M | $5.4M | $8.0M | $9.9M | $9.9M | $9.9M | $9.9M |
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 $9.9M is added at exit.
| Entry \ Exit | 9.0x | 10.0x | 11.0x | 11.5x | 12.0x |
|---|---|---|---|---|---|
| 8.0x | Loss | Loss | Loss | Loss | Loss |
| 9.0x | Loss | Loss | Loss | Loss | Loss |
| 10.0x | Loss | Loss | Loss | Loss | Loss |
| 11.0x | -100% / 0.0x | Loss | Loss | Loss | Loss |
| 12.0x | -100% / 0.0x | -100% / 0.0x | Loss | Loss | Loss |
Covenant Headroom (at 10x Entry, 6.5x Max Leverage)
Pro forma EBITDA can decline 0% before the 6.5x covenant trips. RCM uplift reduces leverage from 99.0x to 99.0x, adding 0.0 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 | $-16.6M | — | $-16.6M | -8.8% |
| Year 1 | $-17.1M | +$6.6M | $-10.5M | -5.6% |
| Year 2 | $-17.6M | +$9.9M | $-7.7M | -4.1% |
| Year 3 | $-18.1M | +$9.9M | $-8.2M | -4.4% |
| Year 4 | $-18.7M | +$9.9M | $-8.8M | -4.7% |
| Year 5 | $-19.2M | +$9.9M | $-9.3M | -5.0% |
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 | $1.9M | $2.8M | $3.8M | $4.5M |
| Denial Rate Reductio | $1.9M | $2.8M | $3.7M | $4.5M |
| A/R Days Reduction | $1.1M | $1.7M | $2.3M | $2.7M |
| Clean Claim Rate | $60K | $90K | $120K | $144K |
| Total | $4.9M | $7.4M | $9.9M | $11.9M |
Peer Context — Where This Hospital Sits
Key metrics vs 12 size-matched peers. Low percentile on margin/efficiency metrics = more room for improvement = larger bridge opportunity.
| Metric | Hospital | P25 | P50 | P75 | Percentile |
|---|---|---|---|---|---|
| Op Margin | -8.8% | -13.1% | -9.3% | -1.5% | P58 |
| Net-to-Gross | 25.0% | 29.4% | 30.9% | 38.8% | P0 |
| Occupancy | 58.0% | 42.9% | 53.9% | 58.7% | P67 |
| Rev/Bed | $1.1M | $1.1M | $1.6M | $1.9M | P17 |
| Exp/Bed | $1.2M | $1.3M | $1.4M | $2.1M | P17 |
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.