Bridge Realization Estimate
ML model predicts what fraction of the bridge is achievable (accuracy: 60%, n=5,839)
Expected realization: 65% of modeled bridge. Strengths: Bed Count. Risks: Occupancy Rate. Risk-adjusted uplift: $3.3M (vs $5.1M 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 |
|---|---|---|---|---|---|---|---|
| Cost to Collect | 4.5% DEFAULT | 2.5% BENCHMARK | $0 | $1.9M | $1.9M | $0 | 12mo |
| Denial Rate Reduction | 12.0% DEFAULT | 6.5% BENCHMARK | $1.9M | $53K | $1.9M | $0 | 12mo |
| A/R Days Reduction | 52.00 DEFAULT | 38.00 BENCHMARK | $298K | $884K | $1.2M | $3.7M | 9mo |
| Clean Claim Rate | 88.0% DEFAULT | 96.0% BENCHMARK | $0 | $62K | $62K | $0 | 6mo |
| Net Collection Rate | 93.5% DEFAULT | 46.3% 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 | $486K | $971K | $1.5M | $1.9M | $1.9M | $1.9M | $1.9M |
| Denial Rate Reduction | $0 | $481K | $962K | $1.4M | $1.9M | $1.9M | $1.9M | $1.9M |
| A/R Days Reduction | $0 | $394K | $788K | $1.2M | $1.2M | $1.2M | $1.2M | $1.2M |
| Clean Claim Rate | $0 | $31K | $62K | $62K | $62K | $62K | $62K | $62K |
| Cumulative | $0 | $1.4M | $2.8M | $4.1M | $5.1M | $5.1M | $5.1M | $5.1M |
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 $5.1M is added at exit.
| Entry \ Exit | 9.0x | 10.0x | 11.0x | 11.5x | 12.0x |
|---|---|---|---|---|---|
| 8.0x | 48% / 7.2x | 53% / 8.3x | 57% / 9.5x | 59% / 10.1x | 60% / 10.6x |
| 9.0x | 43% / 6.0x | 48% / 7.0x | 52% / 8.1x | 54% / 8.6x | 56% / 9.1x |
| 10.0x | 38% / 5.1x | 43% / 6.0x | 47% / 6.9x | 49% / 7.4x | 51% / 7.9x |
| 11.0x | 34% / 4.3x | 39% / 5.2x | 43% / 6.0x | 45% / 6.4x | 47% / 6.8x |
| 12.0x | 30% / 3.7x | 35% / 4.5x | 39% / 5.2x | 41% / 5.6x | 43% / 6.0x |
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 6.7x, adding 1.8 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 | $19.3M | — | $19.3M | 19.9% |
| Year 1 | $19.9M | +$3.4M | $23.3M | 24.0% |
| Year 2 | $20.5M | +$5.1M | $25.6M | 26.3% |
| Year 3 | $21.1M | +$5.1M | $26.2M | 27.0% |
| Year 4 | $21.7M | +$5.1M | $26.8M | 27.6% |
| Year 5 | $22.4M | +$5.1M | $27.5M | 28.3% |
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 | $971K | $1.5M | $1.9M | $2.3M |
| Denial Rate Reductio | $962K | $1.4M | $1.9M | $2.3M |
| A/R Days Reduction | $591K | $886K | $1.2M | $1.4M |
| Clean Claim Rate | $31K | $47K | $62K | $75K |
| Total | $2.6M | $3.8M | $5.1M | $6.1M |
Peer Context — Where This Hospital Sits
Key metrics vs 25 size-matched peers. Low percentile on margin/efficiency metrics = more room for improvement = larger bridge opportunity.
| Metric | Hospital | P25 | P50 | P75 | Percentile |
|---|---|---|---|---|---|
| Op Margin | 19.9% | -11.8% | 4.7% | 9.2% | P86 |
| Net-to-Gross | 21.3% | 19.7% | 33.1% | 46.3% | P27 |
| Occupancy | 34.5% | 25.0% | 49.5% | 73.4% | P32 |
| Rev/Bed | $1.8M | $484K | $893K | $1.2M | P82 |
| Exp/Bed | $1.5M | $455K | $1.1M | $1.9M | P56 |
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.