Bridge Realization Estimate
ML model predicts what fraction of the bridge is achievable (accuracy: 60%, n=5,839)
Expected realization: 62% of modeled bridge. Risks: Occupancy Rate. Risk-adjusted uplift: $6.6M (vs $10.7M 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 | $4.1M | $4.1M | $0 | 12mo |
| Denial Rate Reduction | 12.0% DEFAULT | 6.5% BENCHMARK | $3.9M | $112K | $4.0M | $0 | 12mo |
| A/R Days Reduction | 52.00 DEFAULT | 38.00 BENCHMARK | $626K | $1.9M | $2.5M | $7.8M | 9mo |
| Clean Claim Rate | 88.0% DEFAULT | 96.0% BENCHMARK | $0 | $131K | $131K | $0 | 6mo |
| Net Collection Rate | 93.5% DEFAULT | 33.4% 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 | $1.0M | $2.0M | $3.1M | $4.1M | $4.1M | $4.1M | $4.1M |
| Denial Rate Reduction | $0 | $1.0M | $2.0M | $3.0M | $4.0M | $4.0M | $4.0M | $4.0M |
| A/R Days Reduction | $0 | $828K | $1.7M | $2.5M | $2.5M | $2.5M | $2.5M | $2.5M |
| Clean Claim Rate | $0 | $65K | $131K | $131K | $131K | $131K | $131K | $131K |
| Cumulative | $0 | $2.9M | $5.8M | $8.7M | $10.7M | $10.7M | $10.7M | $10.7M |
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 $10.7M is added at exit.
| Entry \ Exit | 9.0x | 10.0x | 11.0x | 11.5x | 12.0x |
|---|---|---|---|---|---|
| 8.0x | 50% / 7.5x | 54% / 8.7x | 58% / 9.9x | 60% / 10.5x | 62% / 11.1x |
| 9.0x | 45% / 6.3x | 49% / 7.4x | 53% / 8.4x | 55% / 9.0x | 57% / 9.5x |
| 10.0x | 40% / 5.3x | 45% / 6.3x | 49% / 7.3x | 51% / 7.7x | 52% / 8.2x |
| 11.0x | 36% / 4.6x | 40% / 5.4x | 45% / 6.3x | 46% / 6.7x | 48% / 7.2x |
| 12.0x | 31% / 3.9x | 36% / 4.7x | 41% / 5.5x | 43% / 5.9x | 45% / 6.3x |
Covenant Headroom (at 10x Entry, 6.5x Max Leverage)
Pro forma EBITDA can decline 1% before the 6.5x covenant trips. RCM uplift reduces leverage from 8.5x to 6.5x, adding 2.0 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 | $34.5M | — | $34.5M | 16.9% |
| Year 1 | $35.6M | +$7.2M | $42.7M | 20.9% |
| Year 2 | $36.6M | +$10.7M | $47.4M | 23.2% |
| Year 3 | $37.7M | +$10.7M | $48.5M | 23.7% |
| Year 4 | $38.9M | +$10.7M | $49.6M | 24.3% |
| Year 5 | $40.0M | +$10.7M | $50.8M | 24.9% |
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 | $2.0M | $3.1M | $4.1M | $4.9M |
| Denial Rate Reductio | $2.0M | $3.0M | $4.0M | $4.8M |
| A/R Days Reduction | $1.2M | $1.9M | $2.5M | $3.0M |
| Clean Claim Rate | $65K | $98K | $131K | $157K |
| Total | $5.4M | $8.1M | $10.7M | $12.9M |
Peer Context — Where This Hospital Sits
Key metrics vs 90 size-matched peers. Low percentile on margin/efficiency metrics = more room for improvement = larger bridge opportunity.
| Metric | Hospital | P25 | P50 | P75 | Percentile |
|---|---|---|---|---|---|
| Op Margin | 16.9% | -9.6% | 0.5% | 7.3% | P90 |
| Net-to-Gross | 33.5% | 21.6% | 27.4% | 33.4% | P75 |
| Occupancy | 28.1% | 44.6% | 55.6% | 69.2% | P4 |
| Rev/Bed | $1.4M | $703K | $1.3M | $1.6M | P56 |
| Exp/Bed | $1.1M | $548K | $1.2M | $1.6M | P46 |
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.