Bridge Realization Estimate
ML model predicts what fraction of the bridge is achievable (accuracy: 60%, n=5,839)
Expected realization: 59% of modeled bridge. Risks: Occupancy Rate. Risk-adjusted uplift: $3.3M (vs $5.6M 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 | $2.1M | $2.1M | $0 | 12mo |
| Denial Rate Reduction | 12.0% DEFAULT | 6.5% BENCHMARK | $2.0M | $58K | $2.1M | $0 | 12mo |
| A/R Days Reduction | 52.00 DEFAULT | 38.00 BENCHMARK | $325K | $964K | $1.3M | $4.1M | 9mo |
| Clean Claim Rate | 88.0% DEFAULT | 96.0% BENCHMARK | $0 | $68K | $68K | $0 | 6mo |
| Net Collection Rate | 93.5% DEFAULT | 36.4% 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 | $530K | $1.1M | $1.6M | $2.1M | $2.1M | $2.1M | $2.1M |
| Denial Rate Reduction | $0 | $524K | $1.0M | $1.6M | $2.1M | $2.1M | $2.1M | $2.1M |
| A/R Days Reduction | $0 | $430K | $859K | $1.3M | $1.3M | $1.3M | $1.3M | $1.3M |
| Clean Claim Rate | $0 | $34K | $68K | $68K | $68K | $68K | $68K | $68K |
| Cumulative | $0 | $1.5M | $3.0M | $4.5M | $5.6M | $5.6M | $5.6M | $5.6M |
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 $5.6M is added at exit.
| Entry \ Exit | 9.0x | 10.0x | 11.0x | 11.5x | 12.0x |
|---|---|---|---|---|---|
| 8.0x | 185% / 187.1x | 191% / 208.3x | 197% / 229.4x | 199% / 240.0x | 202% / 250.6x |
| 9.0x | 178% / 166.0x | 184% / 184.8x | 190% / 203.6x | 192% / 213.0x | 195% / 222.4x |
| 10.0x | 172% / 149.1x | 178% / 166.0x | 183% / 182.9x | 186% / 191.4x | 188% / 199.8x |
| 11.0x | 167% / 135.2x | 173% / 150.6x | 178% / 166.0x | 181% / 173.7x | 183% / 181.4x |
| 12.0x | 162% / 123.7x | 168% / 137.8x | 173% / 151.9x | 176% / 158.9x | 178% / 166.0x |
Covenant Headroom (at 10x Entry, 6.5x Max Leverage)
Pro forma EBITDA can decline 95% before the 6.5x covenant trips. RCM uplift reduces leverage from 8.5x to 0.3x, adding 8.1 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 | $224K | — | $224K | 0.2% |
| Year 1 | $231K | +$3.7M | $3.9M | 3.7% |
| Year 2 | $238K | +$5.6M | $5.8M | 5.5% |
| Year 3 | $245K | +$5.6M | $5.8M | 5.5% |
| Year 4 | $252K | +$5.6M | $5.8M | 5.5% |
| Year 5 | $260K | +$5.6M | $5.8M | 5.5% |
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 | $1.1M | $1.6M | $2.1M | $2.5M |
| Denial Rate Reductio | $1.0M | $1.6M | $2.1M | $2.5M |
| A/R Days Reduction | $645K | $967K | $1.3M | $1.5M |
| Clean Claim Rate | $34K | $51K | $68K | $81K |
| Total | $2.8M | $4.2M | $5.6M | $6.7M |
Peer Context — Where This Hospital Sits
Key metrics vs 106 size-matched peers. Low percentile on margin/efficiency metrics = more room for improvement = larger bridge opportunity.
| Metric | Hospital | P25 | P50 | P75 | Percentile |
|---|---|---|---|---|---|
| Op Margin | 0.2% | -12.7% | 1.4% | 8.1% | P48 |
| Net-to-Gross | 44.2% | 22.1% | 28.5% | 36.4% | P86 |
| Occupancy | 17.8% | 40.1% | 53.3% | 67.3% | P2 |
| Rev/Bed | $1.1M | $402K | $1.1M | $1.5M | P50 |
| Exp/Bed | $1.1M | $352K | $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.