Bridge Realization Estimate
ML model predicts what fraction of the bridge is achievable (accuracy: 60%, n=5,839)
Expected realization: 67% of modeled bridge. Risk-adjusted uplift: $3.3M (vs $5.0M 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 | $1.8M | $52K | $1.9M | $0 | 12mo |
| A/R Days Reduction | 52.00 DEFAULT | 38.00 BENCHMARK | $291K | $862K | $1.2M | $3.6M | 9mo |
| Clean Claim Rate | 88.0% DEFAULT | 96.0% BENCHMARK | $0 | $61K | $61K | $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 | $474K | $948K | $1.4M | $1.9M | $1.9M | $1.9M | $1.9M |
| Denial Rate Reduction | $0 | $469K | $938K | $1.4M | $1.9M | $1.9M | $1.9M | $1.9M |
| A/R Days Reduction | $0 | $384K | $769K | $1.2M | $1.2M | $1.2M | $1.2M | $1.2M |
| Clean Claim Rate | $0 | $30K | $61K | $61K | $61K | $61K | $61K | $61K |
| Cumulative | $0 | $1.4M | $2.7M | $4.0M | $5.0M | $5.0M | $5.0M | $5.0M |
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 $5.0M is added at exit.
| Entry \ Exit | 9.0x | 10.0x | 11.0x | 11.5x | 12.0x |
|---|---|---|---|---|---|
| 8.0x | 164% / 127.4x | 169% / 141.9x | 175% / 156.4x | 177% / 163.6x | 180% / 170.9x |
| 9.0x | 157% / 112.8x | 163% / 125.8x | 168% / 138.7x | 171% / 145.1x | 173% / 151.5x |
| 10.0x | 152% / 101.2x | 157% / 112.8x | 162% / 124.5x | 165% / 130.3x | 167% / 136.1x |
| 11.0x | 147% / 91.7x | 152% / 102.3x | 157% / 112.8x | 160% / 118.1x | 162% / 123.4x |
| 12.0x | 142% / 83.8x | 148% / 93.5x | 153% / 103.2x | 155% / 108.0x | 157% / 112.8x |
Covenant Headroom (at 10x Entry, 6.5x Max Leverage)
Pro forma EBITDA can decline 93% before the 6.5x covenant trips. RCM uplift reduces leverage from 8.5x to 0.5x, adding 8.0 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 | $299K | — | $299K | 0.3% |
| Year 1 | $307K | +$3.3M | $3.6M | 3.8% |
| Year 2 | $317K | +$5.0M | $5.3M | 5.6% |
| Year 3 | $326K | +$5.0M | $5.3M | 5.6% |
| Year 4 | $336K | +$5.0M | $5.3M | 5.6% |
| Year 5 | $346K | +$5.0M | $5.3M | 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 | $948K | $1.4M | $1.9M | $2.3M |
| Denial Rate Reductio | $938K | $1.4M | $1.9M | $2.3M |
| A/R Days Reduction | $577K | $865K | $1.2M | $1.4M |
| Clean Claim Rate | $30K | $45K | $61K | $73K |
| Total | $2.5M | $3.7M | $5.0M | $6.0M |
Peer Context — Where This Hospital Sits
Key metrics vs 55 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% | -8.6% | -1.7% | 12.5% | P56 |
| Net-to-Gross | 40.5% | 23.4% | 29.1% | 37.7% | P85 |
| Occupancy | 49.4% | 43.4% | 54.4% | 71.3% | P35 |
| Rev/Bed | $1.1M | $541K | $1.2M | $1.7M | P46 |
| Exp/Bed | $1.1M | $632K | $1.1M | $1.6M | P49 |
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.