Bridge Realization Estimate
ML model predicts what fraction of the bridge is achievable (accuracy: 60%, n=5,839)
Expected realization: 75% of modeled bridge. Strengths: Occupancy Rate, Revenue per Bed. Risk-adjusted uplift: $25.3M (vs $33.5M 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 | $12.7M | $12.7M | $0 | 12mo |
| Denial Rate Reduction | 12.0% DEFAULT | 6.5% BENCHMARK | $12.3M | $350K | $12.6M | $0 | 12mo |
| A/R Days Reduction | 52.00 DEFAULT | 38.00 BENCHMARK | $2.0M | $5.8M | $7.8M | $24.4M | 9mo |
| Clean Claim Rate | 88.0% DEFAULT | 96.0% BENCHMARK | $0 | $408K | $408K | $0 | 6mo |
| Net Collection Rate | 93.5% DEFAULT | 41.8% 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 | $3.2M | $6.4M | $9.6M | $12.7M | $12.7M | $12.7M | $12.7M |
| Denial Rate Reduction | $0 | $3.2M | $6.3M | $9.5M | $12.6M | $12.6M | $12.6M | $12.6M |
| A/R Days Reduction | $0 | $2.6M | $5.2M | $7.8M | $7.8M | $7.8M | $7.8M | $7.8M |
| Clean Claim Rate | $0 | $204K | $408K | $408K | $408K | $408K | $408K | $408K |
| Cumulative | $0 | $9.1M | $18.3M | $27.2M | $33.5M | $33.5M | $33.5M | $33.5M |
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 $33.5M is added at exit.
| Entry \ Exit | 9.0x | 10.0x | 11.0x | 11.5x | 12.0x |
|---|---|---|---|---|---|
| 8.0x | 67% / 13.0x | 72% / 14.8x | 76% / 16.7x | 77% / 17.6x | 79% / 18.5x |
| 9.0x | 62% / 11.2x | 67% / 12.8x | 71% / 14.4x | 72% / 15.2x | 74% / 16.1x |
| 10.0x | 58% / 9.8x | 62% / 11.2x | 66% / 12.7x | 68% / 13.4x | 70% / 14.1x |
| 11.0x | 54% / 8.6x | 58% / 9.9x | 62% / 11.2x | 64% / 11.9x | 66% / 12.5x |
| 12.0x | 50% / 7.6x | 55% / 8.8x | 59% / 10.0x | 60% / 10.6x | 62% / 11.2x |
Covenant Headroom (at 10x Entry, 6.5x Max Leverage)
Pro forma EBITDA can decline 37% before the 6.5x covenant trips. RCM uplift reduces leverage from 8.5x to 4.1x, adding 4.4 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 | $31.4M | — | $31.4M | 4.9% |
| Year 1 | $32.3M | +$22.3M | $54.7M | 8.6% |
| Year 2 | $33.3M | +$33.5M | $66.8M | 10.5% |
| Year 3 | $34.3M | +$33.5M | $67.8M | 10.6% |
| Year 4 | $35.3M | +$33.5M | $68.9M | 10.8% |
| Year 5 | $36.4M | +$33.5M | $69.9M | 11.0% |
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 | $6.4M | $9.6M | $12.7M | $15.3M |
| Denial Rate Reductio | $6.3M | $9.5M | $12.6M | $15.1M |
| A/R Days Reduction | $3.9M | $5.8M | $7.8M | $9.3M |
| Clean Claim Rate | $204K | $306K | $408K | $489K |
| Total | $16.8M | $25.1M | $33.5M | $40.2M |
Peer Context — Where This Hospital Sits
Key metrics vs 100 size-matched peers. Low percentile on margin/efficiency metrics = more room for improvement = larger bridge opportunity.
| Metric | Hospital | P25 | P50 | P75 | Percentile |
|---|---|---|---|---|---|
| Op Margin | 4.9% | -27.7% | -17.6% | -9.4% | P97 |
| Net-to-Gross | 45.3% | 26.4% | 33.4% | 41.8% | P84 |
| Occupancy | 84.2% | 52.9% | 69.0% | 82.1% | P78 |
| Rev/Bed | $3.2M | $917K | $1.4M | $2.0M | P95 |
| Exp/Bed | $3.0M | $819K | $1.6M | $2.3M | P92 |
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.