Bridge Realization Estimate
ML model predicts what fraction of the bridge is achievable (accuracy: 60%, n=5,839)
Expected realization: 66% of modeled bridge. Strengths: Net-to-Gross Ratio. Risks: Occupancy Rate, Revenue per Bed. Risk-adjusted uplift: $4.1M (vs $6.2M 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 | $2.4M | $2.4M | $0 | 12mo |
| Denial Rate Reduction | 12.0% DEFAULT | 6.5% BENCHMARK | $2.3M | $65K | $2.3M | $0 | 12mo |
| A/R Days Reduction | 52.00 DEFAULT | 38.00 BENCHMARK | $362K | $1.1M | $1.4M | $4.5M | 9mo |
| Clean Claim Rate | 88.0% DEFAULT | 96.0% BENCHMARK | $0 | $75K | $75K | $0 | 6mo |
| Net Collection Rate | 93.5% DEFAULT | 38.7% 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 | $589K | $1.2M | $1.8M | $2.4M | $2.4M | $2.4M | $2.4M |
| Denial Rate Reduction | $0 | $583K | $1.2M | $1.7M | $2.3M | $2.3M | $2.3M | $2.3M |
| A/R Days Reduction | $0 | $478K | $956K | $1.4M | $1.4M | $1.4M | $1.4M | $1.4M |
| Clean Claim Rate | $0 | $38K | $75K | $75K | $75K | $75K | $75K | $75K |
| Cumulative | $0 | $1.7M | $3.4M | $5.0M | $6.2M | $6.2M | $6.2M | $6.2M |
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 $6.2M is added at exit.
| Entry \ Exit | 9.0x | 10.0x | 11.0x | 11.5x | 12.0x |
|---|---|---|---|---|---|
| 8.0x | 43% / 5.9x | 47% / 7.0x | 51% / 8.0x | 53% / 8.5x | 55% / 9.0x |
| 9.0x | 38% / 4.9x | 42% / 5.8x | 46% / 6.7x | 48% / 7.2x | 50% / 7.6x |
| 10.0x | 33% / 4.1x | 38% / 4.9x | 42% / 5.7x | 44% / 6.1x | 46% / 6.5x |
| 11.0x | 28% / 3.4x | 33% / 4.2x | 38% / 4.9x | 40% / 5.3x | 41% / 5.7x |
| 12.0x | 24% / 2.9x | 29% / 3.6x | 33% / 4.2x | 36% / 4.6x | 38% / 4.9x |
Covenant Headroom (at 10x Entry, 6.5x Max Leverage)
Pro forma EBITDA can decline -19% before the 6.5x covenant trips. RCM uplift reduces leverage from 8.5x to 7.7x, adding 0.7 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 | $64.0M | — | $64.0M | 54.3% |
| Year 1 | $65.9M | +$4.1M | $70.0M | 59.4% |
| Year 2 | $67.9M | +$6.2M | $74.1M | 62.9% |
| Year 3 | $69.9M | +$6.2M | $76.1M | 64.6% |
| Year 4 | $72.0M | +$6.2M | $78.2M | 66.4% |
| Year 5 | $74.2M | +$6.2M | $80.4M | 68.2% |
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 | $1.2M | $1.8M | $2.4M | $2.8M |
| Denial Rate Reductio | $1.2M | $1.7M | $2.3M | $2.8M |
| A/R Days Reduction | $717K | $1.1M | $1.4M | $1.7M |
| Clean Claim Rate | $38K | $57K | $75K | $90K |
| Total | $3.1M | $4.6M | $6.2M | $7.4M |
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 | 54.3% | -3.2% | 6.7% | 10.5% | P93 |
| Net-to-Gross | 16.7% | 19.6% | 28.4% | 38.7% | P13 |
| Occupancy | 45.6% | 43.4% | 51.8% | 67.3% | P29 |
| Rev/Bed | $982K | $511K | $1.2M | $1.7M | P33 |
| Exp/Bed | $449K | $449K | $1.2M | $1.9M | P24 |
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.