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: Commercial Payer %. Risk-adjusted uplift: $9.2M (vs $12.6M 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 | $4.8M | $4.8M | $0 | 12mo |
| Denial Rate Reduction | 12.0% DEFAULT | 6.5% BENCHMARK | $4.6M | $132K | $4.7M | $0 | 12mo |
| A/R Days Reduction | 52.00 DEFAULT | 38.00 BENCHMARK | $736K | $2.2M | $2.9M | $9.2M | 9mo |
| Clean Claim Rate | 88.0% DEFAULT | 96.0% BENCHMARK | $0 | $153K | $153K | $0 | 6mo |
| Net Collection Rate | 93.5% DEFAULT | 30.8% 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 | $1.2M | $2.4M | $3.6M | $4.8M | $4.8M | $4.8M | $4.8M |
| Denial Rate Reduction | $0 | $1.2M | $2.4M | $3.6M | $4.7M | $4.7M | $4.7M | $4.7M |
| A/R Days Reduction | $0 | $972K | $1.9M | $2.9M | $2.9M | $2.9M | $2.9M | $2.9M |
| Clean Claim Rate | $0 | $77K | $153K | $153K | $153K | $153K | $153K | $153K |
| Cumulative | $0 | $3.4M | $6.9M | $10.2M | $12.6M | $12.6M | $12.6M | $12.6M |
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 $12.6M is added at exit.
| Entry \ Exit | 9.0x | 10.0x | 11.0x | 11.5x | 12.0x |
|---|---|---|---|---|---|
| 8.0x | 371% / 2310.1x | 381% / 2567.1x | 390% / 2824.2x | 394% / 2952.7x | 399% / 3081.2x |
| 9.0x | 360% / 2053.1x | 370% / 2281.5x | 379% / 2510.0x | 383% / 2624.3x | 387% / 2738.5x |
| 10.0x | 350% / 1847.4x | 360% / 2053.1x | 369% / 2258.7x | 373% / 2361.5x | 377% / 2464.3x |
| 11.0x | 342% / 1679.2x | 351% / 1866.1x | 360% / 2053.1x | 364% / 2146.5x | 368% / 2240.0x |
| 12.0x | 334% / 1539.0x | 343% / 1710.3x | 352% / 1881.7x | 356% / 1967.4x | 360% / 2053.1x |
Covenant Headroom (at 10x Entry, 6.5x Max Leverage)
Pro forma EBITDA can decline 100% before the 6.5x covenant trips. RCM uplift reduces leverage from 8.5x to 0.0x, adding 8.4 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 | $40K | — | $40K | 0.0% |
| Year 1 | $41K | +$8.4M | $8.4M | 3.5% |
| Year 2 | $42K | +$12.6M | $12.7M | 5.3% |
| Year 3 | $44K | +$12.6M | $12.7M | 5.3% |
| Year 4 | $45K | +$12.6M | $12.7M | 5.3% |
| Year 5 | $46K | +$12.6M | $12.7M | 5.3% |
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 | $2.4M | $3.6M | $4.8M | $5.8M |
| Denial Rate Reductio | $2.4M | $3.6M | $4.7M | $5.7M |
| A/R Days Reduction | $1.5M | $2.2M | $2.9M | $3.5M |
| Clean Claim Rate | $77K | $115K | $153K | $184K |
| Total | $6.3M | $9.5M | $12.6M | $15.1M |
Peer Context — Where This Hospital Sits
Key metrics vs 81 size-matched peers. Low percentile on margin/efficiency metrics = more room for improvement = larger bridge opportunity.
| Metric | Hospital | P25 | P50 | P75 | Percentile |
|---|---|---|---|---|---|
| Op Margin | 0.0% | -9.7% | 0.3% | 7.0% | P45 |
| Net-to-Gross | 21.8% | 21.6% | 26.9% | 30.8% | P27 |
| Occupancy | 79.6% | 48.0% | 56.8% | 71.2% | P85 |
| Rev/Bed | $1.4M | $958K | $1.3M | $1.6M | P57 |
| Exp/Bed | $1.4M | $720K | $1.3M | $1.6M | 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.