Bridge Realization Estimate
ML model predicts what fraction of the bridge is achievable (accuracy: 60%, n=5,839)
Expected realization: 67% of modeled bridge. Strengths: Occupancy Rate. Risks: Bed Count, Commercial Payer %. Risk-adjusted uplift: $14.4M (vs $21.4M 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 | $8.1M | $8.1M | $0 | 12mo |
| Denial Rate Reduction | 12.0% DEFAULT | 6.5% BENCHMARK | $7.8M | $223K | $8.0M | $0 | 12mo |
| A/R Days Reduction | 52.00 DEFAULT | 38.00 BENCHMARK | $1.2M | $3.7M | $4.9M | $15.6M | 9mo |
| Clean Claim Rate | 88.0% DEFAULT | 96.0% BENCHMARK | $0 | $260K | $260K | $0 | 6mo |
| Net Collection Rate | 93.5% DEFAULT | 33.0% 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 | $2.0M | $4.1M | $6.1M | $8.1M | $8.1M | $8.1M | $8.1M |
| Denial Rate Reduction | $0 | $2.0M | $4.0M | $6.0M | $8.0M | $8.0M | $8.0M | $8.0M |
| A/R Days Reduction | $0 | $1.6M | $3.3M | $4.9M | $4.9M | $4.9M | $4.9M | $4.9M |
| Clean Claim Rate | $0 | $130K | $260K | $260K | $260K | $260K | $260K | $260K |
| Cumulative | $0 | $5.8M | $11.6M | $17.3M | $21.4M | $21.4M | $21.4M | $21.4M |
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 $21.4M is added at exit.
| Entry \ Exit | 9.0x | 10.0x | 11.0x | 11.5x | 12.0x |
|---|---|---|---|---|---|
| 8.0x | 172% / 149.7x | 178% / 166.7x | 184% / 183.7x | 186% / 192.1x | 189% / 200.6x |
| 9.0x | 166% / 132.7x | 172% / 147.8x | 177% / 162.9x | 179% / 170.4x | 182% / 178.0x |
| 10.0x | 160% / 119.1x | 166% / 132.7x | 171% / 146.3x | 174% / 153.1x | 176% / 159.9x |
| 11.0x | 155% / 108.0x | 161% / 120.3x | 166% / 132.7x | 168% / 138.8x | 171% / 145.0x |
| 12.0x | 151% / 98.7x | 156% / 110.0x | 161% / 121.3x | 163% / 127.0x | 166% / 132.7x |
Covenant Headroom (at 10x Entry, 6.5x Max Leverage)
Pro forma EBITDA can decline 94% before the 6.5x covenant trips. RCM uplift reduces leverage from 8.5x to 0.4x, adding 8.1 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 | $1.1M | — | $1.1M | 0.3% |
| Year 1 | $1.1M | +$14.2M | $15.4M | 3.8% |
| Year 2 | $1.1M | +$21.4M | $22.5M | 5.5% |
| Year 3 | $1.2M | +$21.4M | $22.5M | 5.6% |
| Year 4 | $1.2M | +$21.4M | $22.6M | 5.6% |
| Year 5 | $1.3M | +$21.4M | $22.6M | 5.6% |
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 | $4.1M | $6.1M | $8.1M | $9.7M |
| Denial Rate Reductio | $4.0M | $6.0M | $8.0M | $9.6M |
| A/R Days Reduction | $2.5M | $3.7M | $4.9M | $5.9M |
| Clean Claim Rate | $130K | $195K | $260K | $312K |
| Total | $10.7M | $16.0M | $21.4M | $25.6M |
Peer Context — Where This Hospital Sits
Key metrics vs 35 size-matched peers. Low percentile on margin/efficiency metrics = more room for improvement = larger bridge opportunity.
| Metric | Hospital | P25 | P50 | P75 | Percentile |
|---|---|---|---|---|---|
| Op Margin | 0.3% | -5.1% | 2.8% | 8.3% | P41 |
| Net-to-Gross | 27.1% | 24.8% | 28.1% | 33.0% | P38 |
| Occupancy | 59.2% | 55.5% | 68.7% | 79.2% | P34 |
| Rev/Bed | $1.4M | $968K | $1.4M | $1.7M | P47 |
| Exp/Bed | $1.4M | $806K | $1.4M | $1.7M | P46 |
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.