Bridge Realization Estimate
ML model predicts what fraction of the bridge is achievable (accuracy: 60%, n=5,839)
Expected realization: 70% of modeled bridge. Strengths: Occupancy Rate. Risks: Bed Count. Risk-adjusted uplift: $14.0M (vs $20.1M 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 | $7.7M | $7.7M | $0 | 12mo |
| Denial Rate Reduction | 12.0% DEFAULT | 6.5% BENCHMARK | $7.4M | $210K | $7.6M | $0 | 12mo |
| A/R Days Reduction | 52.00 DEFAULT | 38.00 BENCHMARK | $1.2M | $3.5M | $4.7M | $14.7M | 9mo |
| Clean Claim Rate | 88.0% DEFAULT | 96.0% BENCHMARK | $0 | $245K | $245K | $0 | 6mo |
| Net Collection Rate | 93.5% DEFAULT | 30.3% 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 | $1.9M | $3.8M | $5.7M | $7.7M | $7.7M | $7.7M | $7.7M |
| Denial Rate Reduction | $0 | $1.9M | $3.8M | $5.7M | $7.6M | $7.6M | $7.6M | $7.6M |
| A/R Days Reduction | $0 | $1.6M | $3.1M | $4.7M | $4.7M | $4.7M | $4.7M | $4.7M |
| Clean Claim Rate | $0 | $122K | $245K | $245K | $245K | $245K | $245K | $245K |
| Cumulative | $0 | $5.5M | $11.0M | $16.3M | $20.1M | $20.1M | $20.1M | $20.1M |
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 $20.1M is added at exit.
| Entry \ Exit | 9.0x | 10.0x | 11.0x | 11.5x | 12.0x |
|---|---|---|---|---|---|
| 8.0x | 187% / 194.3x | 193% / 216.3x | 199% / 238.3x | 202% / 249.2x | 204% / 260.2x |
| 9.0x | 180% / 172.4x | 186% / 191.9x | 192% / 211.4x | 194% / 221.2x | 197% / 230.9x |
| 10.0x | 174% / 154.8x | 180% / 172.4x | 186% / 190.0x | 188% / 198.7x | 191% / 207.5x |
| 11.0x | 169% / 140.5x | 175% / 156.4x | 180% / 172.4x | 183% / 180.4x | 185% / 188.4x |
| 12.0x | 164% / 128.5x | 170% / 143.1x | 175% / 157.8x | 178% / 165.1x | 180% / 172.4x |
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 | $778K | — | $778K | 0.2% |
| Year 1 | $802K | +$13.4M | $14.2M | 3.7% |
| Year 2 | $826K | +$20.1M | $21.0M | 5.5% |
| Year 3 | $851K | +$20.1M | $21.0M | 5.5% |
| Year 4 | $876K | +$20.1M | $21.0M | 5.5% |
| Year 5 | $902K | +$20.1M | $21.0M | 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 | $3.8M | $5.7M | $7.7M | $9.2M |
| Denial Rate Reductio | $3.8M | $5.7M | $7.6M | $9.1M |
| A/R Days Reduction | $2.3M | $3.5M | $4.7M | $5.6M |
| Clean Claim Rate | $122K | $184K | $245K | $294K |
| Total | $10.1M | $15.1M | $20.1M | $24.2M |
Peer Context — Where This Hospital Sits
Key metrics vs 72 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% | -5.7% | 0.5% | 7.8% | P47 |
| Net-to-Gross | 30.0% | 21.0% | 26.9% | 30.3% | P71 |
| Occupancy | 65.8% | 52.7% | 60.1% | 74.9% | P60 |
| Rev/Bed | $1.6M | $1.1M | $1.4M | $2.0M | P59 |
| Exp/Bed | $1.6M | $989K | $1.4M | $1.9M | 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.