Bridge Realization Estimate
ML model predicts what fraction of the bridge is achievable (accuracy: 60%, n=5,839)
Expected realization: 68% of modeled bridge. Risk-adjusted uplift: $4.3M (vs $6.3M 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 | $66K | $2.4M | $0 | 12mo |
| A/R Days Reduction | 52.00 DEFAULT | 38.00 BENCHMARK | $370K | $1.1M | $1.5M | $4.6M | 9mo |
| Clean Claim Rate | 88.0% DEFAULT | 96.0% BENCHMARK | $0 | $77K | $77K | $0 | 6mo |
| Net Collection Rate | 93.5% DEFAULT | 37.7% 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 | $603K | $1.2M | $1.8M | $2.4M | $2.4M | $2.4M | $2.4M |
| Denial Rate Reduction | $0 | $597K | $1.2M | $1.8M | $2.4M | $2.4M | $2.4M | $2.4M |
| A/R Days Reduction | $0 | $489K | $978K | $1.5M | $1.5M | $1.5M | $1.5M | $1.5M |
| Clean Claim Rate | $0 | $39K | $77K | $77K | $77K | $77K | $77K | $77K |
| Cumulative | $0 | $1.7M | $3.5M | $5.1M | $6.3M | $6.3M | $6.3M | $6.3M |
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 $6.3M is added at exit.
| Entry \ Exit | 9.0x | 10.0x | 11.0x | 11.5x | 12.0x |
|---|---|---|---|---|---|
| 8.0x | 128% / 61.0x | 133% / 68.1x | 137% / 75.3x | 140% / 78.8x | 142% / 82.4x |
| 9.0x | 122% / 53.9x | 127% / 60.2x | 132% / 66.6x | 134% / 69.7x | 136% / 72.9x |
| 10.0x | 117% / 48.1x | 122% / 53.9x | 126% / 59.6x | 129% / 62.4x | 131% / 65.3x |
| 11.0x | 113% / 43.5x | 118% / 48.7x | 122% / 53.9x | 124% / 56.5x | 126% / 59.1x |
| 12.0x | 109% / 39.6x | 113% / 44.4x | 118% / 49.1x | 120% / 51.5x | 122% / 53.9x |
Covenant Headroom (at 10x Entry, 6.5x Max Leverage)
Pro forma EBITDA can decline 85% before the 6.5x covenant trips. RCM uplift reduces leverage from 8.5x to 1.0x, adding 7.5 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 | $832K | — | $832K | 0.7% |
| Year 1 | $857K | +$4.2M | $5.1M | 4.2% |
| Year 2 | $882K | +$6.3M | $7.2M | 6.0% |
| Year 3 | $909K | +$6.3M | $7.3M | 6.0% |
| Year 4 | $936K | +$6.3M | $7.3M | 6.0% |
| Year 5 | $964K | +$6.3M | $7.3M | 6.1% |
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 | $2.9M |
| Denial Rate Reductio | $1.2M | $1.8M | $2.4M | $2.9M |
| A/R Days Reduction | $734K | $1.1M | $1.5M | $1.8M |
| Clean Claim Rate | $39K | $58K | $77K | $93K |
| Total | $3.2M | $4.8M | $6.3M | $7.6M |
Peer Context — Where This Hospital Sits
Key metrics vs 52 size-matched peers. Low percentile on margin/efficiency metrics = more room for improvement = larger bridge opportunity.
| Metric | Hospital | P25 | P50 | P75 | Percentile |
|---|---|---|---|---|---|
| Op Margin | 0.7% | -8.8% | -1.9% | 12.0% | P57 |
| Net-to-Gross | 28.3% | 22.8% | 28.7% | 37.7% | P43 |
| Occupancy | 52.4% | 40.3% | 52.9% | 71.2% | P48 |
| Rev/Bed | $1.6M | $512K | $1.1M | $1.5M | P75 |
| Exp/Bed | $1.6M | $568K | $1.1M | $1.5M | P75 |
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.