Bridge Realization Estimate
ML model predicts what fraction of the bridge is achievable (accuracy: 60%, n=5,839)
Expected realization: 73% of modeled bridge. Strengths: Occupancy Rate. Risks: Net-to-Gross Ratio. Risk-adjusted uplift: $3.7M (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 | $297K | $881K | $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 | 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 | $484K | $968K | $1.5M | $1.9M | $1.9M | $1.9M | $1.9M |
| Denial Rate Reduction | $0 | $479K | $958K | $1.4M | $1.9M | $1.9M | $1.9M | $1.9M |
| A/R Days Reduction | $0 | $392K | $785K | $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 | 73% / 15.4x | 77% / 17.5x | 81% / 19.6x | 83% / 20.6x | 85% / 21.7x |
| 9.0x | 68% / 13.3x | 72% / 15.2x | 76% / 17.0x | 78% / 18.0x | 80% / 18.9x |
| 10.0x | 64% / 11.7x | 68% / 13.3x | 72% / 15.0x | 74% / 15.8x | 76% / 16.7x |
| 11.0x | 60% / 10.3x | 64% / 11.8x | 68% / 13.3x | 70% / 14.1x | 72% / 14.9x |
| 12.0x | 56% / 9.2x | 60% / 10.6x | 64% / 12.0x | 66% / 12.7x | 68% / 13.3x |
Covenant Headroom (at 10x Entry, 6.5x Max Leverage)
Pro forma EBITDA can decline 46% before the 6.5x covenant trips. RCM uplift reduces leverage from 8.5x to 3.5x, adding 4.9 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 | $3.6M | — | $3.6M | 3.8% |
| Year 1 | $3.8M | +$3.4M | $7.2M | 7.4% |
| Year 2 | $3.9M | +$5.1M | $9.0M | 9.3% |
| Year 3 | $4.0M | +$5.1M | $9.1M | 9.4% |
| Year 4 | $4.1M | +$5.1M | $9.2M | 9.5% |
| Year 5 | $4.2M | +$5.1M | $9.3M | 9.6% |
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 | $968K | $1.5M | $1.9M | $2.3M |
| Denial Rate Reductio | $958K | $1.4M | $1.9M | $2.3M |
| A/R Days Reduction | $589K | $883K | $1.2M | $1.4M |
| Clean Claim Rate | $31K | $46K | $62K | $74K |
| Total | $2.5M | $3.8M | $5.1M | $6.1M |
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 | 3.8% | -10.7% | -2.0% | 12.0% | P65 |
| Net-to-Gross | 79.6% | 22.2% | 28.7% | 37.7% | P92 |
| Occupancy | 79.2% | 40.3% | 52.3% | 69.7% | P88 |
| Rev/Bed | $1.3M | $498K | $1.1M | $1.5M | P63 |
| Exp/Bed | $1.3M | $497K | $1.1M | $1.5M | P62 |
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.