Bridge Realization Estimate
ML model predicts what fraction of the bridge is achievable (accuracy: 60%, n=5,839)
Expected realization: 63% of modeled bridge. Risks: Net-to-Gross Ratio, Revenue per Bed. Risk-adjusted uplift: $1.1M (vs $1.8M 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 | $687K | $687K | $0 | 12mo |
| Denial Rate Reduction | 12.0% DEFAULT | 6.5% BENCHMARK | $662K | $19K | $680K | $0 | 12mo |
| A/R Days Reduction | 52.00 DEFAULT | 38.00 BENCHMARK | $105K | $313K | $418K | $1.3M | 9mo |
| Clean Claim Rate | 88.0% DEFAULT | 96.0% BENCHMARK | $0 | $22K | $22K | $0 | 6mo |
| Net Collection Rate | 93.5% DEFAULT | 37.6% 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 | $172K | $344K | $515K | $687K | $687K | $687K | $687K |
| Denial Rate Reduction | $0 | $170K | $340K | $510K | $680K | $680K | $680K | $680K |
| A/R Days Reduction | $0 | $139K | $279K | $418K | $418K | $418K | $418K | $418K |
| Clean Claim Rate | $0 | $11K | $22K | $22K | $22K | $22K | $22K | $22K |
| Cumulative | $0 | $492K | $985K | $1.5M | $1.8M | $1.8M | $1.8M | $1.8M |
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 $1.8M is added at exit.
| Entry \ Exit | 9.0x | 10.0x | 11.0x | 11.5x | 12.0x |
|---|---|---|---|---|---|
| 8.0x | 54% / 8.7x | 59% / 10.0x | 63% / 11.4x | 64% / 12.0x | 66% / 12.7x |
| 9.0x | 49% / 7.4x | 54% / 8.6x | 58% / 9.7x | 60% / 10.3x | 61% / 10.9x |
| 10.0x | 45% / 6.3x | 49% / 7.4x | 53% / 8.4x | 55% / 9.0x | 57% / 9.5x |
| 11.0x | 40% / 5.5x | 45% / 6.4x | 49% / 7.4x | 51% / 7.9x | 53% / 8.3x |
| 12.0x | 36% / 4.7x | 41% / 5.6x | 45% / 6.5x | 47% / 6.9x | 49% / 7.4x |
Covenant Headroom (at 10x Entry, 6.5x Max Leverage)
Pro forma EBITDA can decline 12% before the 6.5x covenant trips. RCM uplift reduces leverage from 8.5x to 5.7x, adding 2.7 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 | $3.8M | — | $3.8M | 11.1% |
| Year 1 | $3.9M | +$1.2M | $5.1M | 14.9% |
| Year 2 | $4.0M | +$1.8M | $5.8M | 17.0% |
| Year 3 | $4.2M | +$1.8M | $6.0M | 17.3% |
| Year 4 | $4.3M | +$1.8M | $6.1M | 17.7% |
| Year 5 | $4.4M | +$1.8M | $6.2M | 18.1% |
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 | $344K | $515K | $687K | $825K |
| Denial Rate Reductio | $340K | $510K | $680K | $817K |
| A/R Days Reduction | $209K | $314K | $418K | $502K |
| Clean Claim Rate | $11K | $16K | $22K | $26K |
| Total | $904K | $1.4M | $1.8M | $2.2M |
Peer Context — Where This Hospital Sits
Key metrics vs 56 size-matched peers. Low percentile on margin/efficiency metrics = more room for improvement = larger bridge opportunity.
| Metric | Hospital | P25 | P50 | P75 | Percentile |
|---|---|---|---|---|---|
| Op Margin | 11.1% | -8.4% | -1.5% | 12.0% | P73 |
| Net-to-Gross | 100.0% | 23.4% | 28.7% | 37.6% | P95 |
| Occupancy | 49.3% | 42.7% | 54.3% | 71.2% | P34 |
| Rev/Bed | $430K | $528K | $1.2M | $1.7M | P15 |
| Exp/Bed | $382K | $605K | $1.2M | $1.6M | P14 |
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.