Bridge Realization Estimate
ML model predicts what fraction of the bridge is achievable (accuracy: 60%, n=5,839)
Expected realization: 62% of modeled bridge. Strengths: Commercial Payer %, Bed Count. Risks: Occupancy Rate. Risk-adjusted uplift: $2.8M (vs $4.4M 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 | $1.7M | $1.7M | $0 | 12mo |
| Denial Rate Reduction | 12.0% DEFAULT | 6.5% BENCHMARK | $1.6M | $46K | $1.7M | $0 | 12mo |
| A/R Days Reduction | 52.00 DEFAULT | 38.00 BENCHMARK | $258K | $766K | $1.0M | $3.2M | 9mo |
| Clean Claim Rate | 88.0% DEFAULT | 96.0% BENCHMARK | $0 | $54K | $54K | $0 | 6mo |
| Net Collection Rate | 93.5% DEFAULT | 53.6% 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 | $421K | $842K | $1.3M | $1.7M | $1.7M | $1.7M | $1.7M |
| Denial Rate Reduction | $0 | $417K | $833K | $1.2M | $1.7M | $1.7M | $1.7M | $1.7M |
| A/R Days Reduction | $0 | $341K | $683K | $1.0M | $1.0M | $1.0M | $1.0M | $1.0M |
| Clean Claim Rate | $0 | $27K | $54K | $54K | $54K | $54K | $54K | $54K |
| Cumulative | $0 | $1.2M | $2.4M | $3.6M | $4.4M | $4.4M | $4.4M | $4.4M |
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 $4.4M is added at exit.
| Entry \ Exit | 9.0x | 10.0x | 11.0x | 11.5x | 12.0x |
|---|---|---|---|---|---|
| 8.0x | 50% / 7.7x | 55% / 8.9x | 59% / 10.2x | 61% / 10.8x | 63% / 11.4x |
| 9.0x | 45% / 6.5x | 50% / 7.6x | 54% / 8.7x | 56% / 9.2x | 58% / 9.8x |
| 10.0x | 41% / 5.5x | 45% / 6.5x | 50% / 7.5x | 51% / 8.0x | 53% / 8.4x |
| 11.0x | 36% / 4.7x | 41% / 5.6x | 45% / 6.5x | 47% / 6.9x | 49% / 7.4x |
| 12.0x | 32% / 4.1x | 37% / 4.9x | 42% / 5.7x | 44% / 6.1x | 45% / 6.5x |
Covenant Headroom (at 10x Entry, 6.5x Max Leverage)
Pro forma EBITDA can decline 3% before the 6.5x covenant trips. RCM uplift reduces leverage from 8.5x to 6.3x, adding 2.1 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 | $13.0M | — | $13.0M | 15.5% |
| Year 1 | $13.4M | +$3.0M | $16.4M | 19.4% |
| Year 2 | $13.8M | +$4.4M | $18.2M | 21.7% |
| Year 3 | $14.2M | +$4.4M | $18.7M | 22.2% |
| Year 4 | $14.7M | +$4.4M | $19.1M | 22.7% |
| Year 5 | $15.1M | +$4.4M | $19.5M | 23.2% |
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 | $842K | $1.3M | $1.7M | $2.0M |
| Denial Rate Reductio | $833K | $1.2M | $1.7M | $2.0M |
| A/R Days Reduction | $512K | $768K | $1.0M | $1.2M |
| Clean Claim Rate | $27K | $40K | $54K | $65K |
| Total | $2.2M | $3.3M | $4.4M | $5.3M |
Peer Context — Where This Hospital Sits
Key metrics vs 17 size-matched peers. Low percentile on margin/efficiency metrics = more room for improvement = larger bridge opportunity.
| Metric | Hospital | P25 | P50 | P75 | Percentile |
|---|---|---|---|---|---|
| Op Margin | 15.5% | -1.8% | 5.1% | 12.2% | P88 |
| Net-to-Gross | 33.8% | 27.3% | 39.2% | 53.6% | P29 |
| Occupancy | 22.8% | 54.5% | 61.3% | 71.2% | P12 |
| Rev/Bed | $1.4M | $213K | $444K | $812K | P82 |
| Exp/Bed | $1.2M | $308K | $454K | $606K | P82 |
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.