Bridge Realization Estimate
ML model predicts what fraction of the bridge is achievable (accuracy: 60%, n=5,839)
Expected realization: 66% of modeled bridge. Strengths: Revenue per Bed, Bed Count. Risks: Occupancy Rate. 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 | $53K | $1.9M | $0 | 12mo |
| A/R Days Reduction | 52.00 DEFAULT | 38.00 BENCHMARK | $293K | $870K | $1.2M | $3.7M | 9mo |
| Clean Claim Rate | 88.0% DEFAULT | 96.0% BENCHMARK | $0 | $61K | $61K | $0 | 6mo |
| Net Collection Rate | 93.5% DEFAULT | 47.5% 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 | $478K | $956K | $1.4M | $1.9M | $1.9M | $1.9M | $1.9M |
| Denial Rate Reduction | $0 | $473K | $946K | $1.4M | $1.9M | $1.9M | $1.9M | $1.9M |
| A/R Days Reduction | $0 | $388K | $775K | $1.2M | $1.2M | $1.2M | $1.2M | $1.2M |
| Clean Claim Rate | $0 | $31K | $61K | $61K | $61K | $61K | $61K | $61K |
| Cumulative | $0 | $1.4M | $2.7M | $4.1M | $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 | 56% / 9.4x | 61% / 10.8x | 65% / 12.2x | 67% / 12.9x | 69% / 13.6x |
| 9.0x | 51% / 8.0x | 56% / 9.2x | 60% / 10.5x | 62% / 11.1x | 64% / 11.7x |
| 10.0x | 47% / 6.8x | 51% / 8.0x | 56% / 9.1x | 57% / 9.7x | 59% / 10.2x |
| 11.0x | 43% / 5.9x | 47% / 7.0x | 51% / 8.0x | 53% / 8.5x | 55% / 9.0x |
| 12.0x | 39% / 5.2x | 44% / 6.1x | 48% / 7.0x | 50% / 7.5x | 51% / 8.0x |
Covenant Headroom (at 10x Entry, 6.5x Max Leverage)
Pro forma EBITDA can decline 17% before the 6.5x covenant trips. RCM uplift reduces leverage from 8.5x to 5.4x, adding 3.1 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 | $8.9M | — | $8.9M | 9.3% |
| Year 1 | $9.1M | +$3.4M | $12.5M | 13.1% |
| Year 2 | $9.4M | +$5.0M | $14.4M | 15.1% |
| Year 3 | $9.7M | +$5.0M | $14.7M | 15.4% |
| Year 4 | $10.0M | +$5.0M | $15.0M | 15.7% |
| Year 5 | $10.3M | +$5.0M | $15.3M | 16.0% |
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 | $956K | $1.4M | $1.9M | $2.3M |
| Denial Rate Reductio | $946K | $1.4M | $1.9M | $2.3M |
| A/R Days Reduction | $581K | $872K | $1.2M | $1.4M |
| Clean Claim Rate | $31K | $46K | $61K | $73K |
| Total | $2.5M | $3.8M | $5.0M | $6.0M |
Peer Context — Where This Hospital Sits
Key metrics vs 100 size-matched peers. Low percentile on margin/efficiency metrics = more room for improvement = larger bridge opportunity.
| Metric | Hospital | P25 | P50 | P75 | Percentile |
|---|---|---|---|---|---|
| Op Margin | 9.3% | -11.1% | -1.7% | 11.3% | P69 |
| Net-to-Gross | 50.2% | 29.3% | 38.1% | 47.5% | P82 |
| Occupancy | 34.9% | 26.1% | 38.3% | 59.9% | P38 |
| Rev/Bed | $2.9M | $387K | $1.1M | $2.1M | P87 |
| Exp/Bed | $2.6M | $383K | $959K | $2.1M | P91 |
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.