Bridge Realization Estimate
ML model predicts what fraction of the bridge is achievable (accuracy: 60%, n=5,839)
Expected realization: 67% of modeled bridge. Strengths: Revenue per Bed, Bed Count. Risks: Occupancy Rate. Risk-adjusted uplift: $2.8M (vs $4.2M 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 | $1.6M | $1.6M | $0 | 12mo |
| Denial Rate Reduction | 12.0% DEFAULT | 6.5% BENCHMARK | $1.5M | $44K | $1.6M | $0 | 12mo |
| A/R Days Reduction | 52.00 DEFAULT | 38.00 BENCHMARK | $245K | $727K | $973K | $3.1M | 9mo |
| Clean Claim Rate | 88.0% DEFAULT | 96.0% BENCHMARK | $0 | $51K | $51K | $0 | 6mo |
| Net Collection Rate | 93.5% DEFAULT | 47.4% 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 | $400K | $799K | $1.2M | $1.6M | $1.6M | $1.6M | $1.6M |
| Denial Rate Reduction | $0 | $396K | $791K | $1.2M | $1.6M | $1.6M | $1.6M | $1.6M |
| A/R Days Reduction | $0 | $324K | $649K | $973K | $973K | $973K | $973K | $973K |
| Clean Claim Rate | $0 | $26K | $51K | $51K | $51K | $51K | $51K | $51K |
| Cumulative | $0 | $1.1M | $2.3M | $3.4M | $4.2M | $4.2M | $4.2M | $4.2M |
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 $4.2M is added at exit.
| Entry \ Exit | 9.0x | 10.0x | 11.0x | 11.5x | 12.0x |
|---|---|---|---|---|---|
| 8.0x | 69% / 13.6x | 73% / 15.5x | 77% / 17.4x | 79% / 18.3x | 81% / 19.3x |
| 9.0x | 64% / 11.8x | 68% / 13.4x | 72% / 15.1x | 74% / 15.9x | 76% / 16.8x |
| 10.0x | 59% / 10.2x | 64% / 11.8x | 68% / 13.2x | 70% / 14.0x | 71% / 14.8x |
| 11.0x | 55% / 9.0x | 60% / 10.4x | 64% / 11.8x | 66% / 12.4x | 67% / 13.1x |
| 12.0x | 52% / 8.0x | 56% / 9.2x | 60% / 10.5x | 62% / 11.1x | 64% / 11.8x |
Covenant Headroom (at 10x Entry, 6.5x Max Leverage)
Pro forma EBITDA can decline 39% before the 6.5x covenant trips. RCM uplift reduces leverage from 8.5x to 3.9x, adding 4.5 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 | $3.7M | — | $3.7M | 4.6% |
| Year 1 | $3.8M | +$2.8M | $6.6M | 8.2% |
| Year 2 | $3.9M | +$4.2M | $8.1M | 10.1% |
| Year 3 | $4.0M | +$4.2M | $8.2M | 10.3% |
| Year 4 | $4.1M | +$4.2M | $8.3M | 10.4% |
| Year 5 | $4.2M | +$4.2M | $8.4M | 10.6% |
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 | $799K | $1.2M | $1.6M | $1.9M |
| Denial Rate Reductio | $791K | $1.2M | $1.6M | $1.9M |
| A/R Days Reduction | $486K | $730K | $973K | $1.2M |
| Clean Claim Rate | $26K | $38K | $51K | $61K |
| Total | $2.1M | $3.2M | $4.2M | $5.0M |
Peer Context — Where This Hospital Sits
Key metrics vs 97 size-matched peers. Low percentile on margin/efficiency metrics = more room for improvement = larger bridge opportunity.
| Metric | Hospital | P25 | P50 | P75 | Percentile |
|---|---|---|---|---|---|
| Op Margin | 4.6% | -11.1% | -1.7% | 12.0% | P60 |
| Net-to-Gross | 27.6% | 29.1% | 38.1% | 47.4% | P21 |
| Occupancy | 36.8% | 26.1% | 37.5% | 63.7% | P44 |
| Rev/Bed | $2.6M | $422K | $1.1M | $2.1M | P87 |
| Exp/Bed | $2.5M | $391K | $979K | $2.1M | P87 |
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.