Bridge Realization Estimate
ML model predicts what fraction of the bridge is achievable (accuracy: 60%, n=5,839)
Expected realization: 68% of modeled bridge. Strengths: Bed Count, Net-to-Gross Ratio. Risks: Occupancy Rate. Risk-adjusted uplift: $1.9M (vs $2.8M 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 | $1.1M | $1.1M | $0 | 12mo |
| Denial Rate Reduction | 12.0% DEFAULT | 6.5% BENCHMARK | $1.0M | $29K | $1.0M | $0 | 12mo |
| A/R Days Reduction | 52.00 DEFAULT | 38.00 BENCHMARK | $162K | $481K | $643K | $2.0M | 9mo |
| Clean Claim Rate | 88.0% DEFAULT | 96.0% BENCHMARK | $0 | $34K | $34K | $0 | 6mo |
| Net Collection Rate | 93.5% DEFAULT | 46.4% 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 | $264K | $529K | $793K | $1.1M | $1.1M | $1.1M | $1.1M |
| Denial Rate Reduction | $0 | $262K | $524K | $785K | $1.0M | $1.0M | $1.0M | $1.0M |
| A/R Days Reduction | $0 | $214K | $429K | $643K | $643K | $643K | $643K | $643K |
| Clean Claim Rate | $0 | $17K | $34K | $34K | $34K | $34K | $34K | $34K |
| Cumulative | $0 | $758K | $1.5M | $2.3M | $2.8M | $2.8M | $2.8M | $2.8M |
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 $2.8M is added at exit.
| Entry \ Exit | 9.0x | 10.0x | 11.0x | 11.5x | 12.0x |
|---|---|---|---|---|---|
| 8.0x | 73% / 15.6x | 78% / 17.7x | 82% / 19.8x | 83% / 20.8x | 85% / 21.8x |
| 9.0x | 68% / 13.5x | 73% / 15.3x | 77% / 17.2x | 78% / 18.1x | 80% / 19.1x |
| 10.0x | 64% / 11.8x | 68% / 13.5x | 72% / 15.2x | 74% / 16.0x | 76% / 16.8x |
| 11.0x | 60% / 10.4x | 64% / 11.9x | 68% / 13.5x | 70% / 14.2x | 72% / 15.0x |
| 12.0x | 56% / 9.3x | 61% / 10.7x | 65% / 12.1x | 66% / 12.8x | 68% / 13.5x |
Covenant Headroom (at 10x Entry, 6.5x Max Leverage)
Pro forma EBITDA can decline 46% before the 6.5x covenant trips. RCM uplift reduces leverage from 8.5x to 3.5x, adding 5.0 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 | $2.0M | — | $2.0M | 3.7% |
| Year 1 | $2.0M | +$1.9M | $3.9M | 7.3% |
| Year 2 | $2.1M | +$2.8M | $4.9M | 9.2% |
| Year 3 | $2.2M | +$2.8M | $4.9M | 9.3% |
| Year 4 | $2.2M | +$2.8M | $5.0M | 9.5% |
| Year 5 | $2.3M | +$2.8M | $5.1M | 9.6% |
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 | $529K | $793K | $1.1M | $1.3M |
| Denial Rate Reductio | $524K | $785K | $1.0M | $1.3M |
| A/R Days Reduction | $322K | $483K | $643K | $772K |
| Clean Claim Rate | $17K | $25K | $34K | $41K |
| Total | $1.4M | $2.1M | $2.8M | $3.3M |
Peer Context — Where This Hospital Sits
Key metrics vs 91 size-matched peers. Low percentile on margin/efficiency metrics = more room for improvement = larger bridge opportunity.
| Metric | Hospital | P25 | P50 | P75 | Percentile |
|---|---|---|---|---|---|
| Op Margin | 3.7% | -23.3% | -9.8% | 2.8% | P79 |
| Net-to-Gross | 13.3% | 20.6% | 32.6% | 46.4% | P1 |
| Occupancy | 47.3% | 19.1% | 32.9% | 54.0% | P63 |
| Rev/Bed | $1.1M | $375K | $627K | $1.2M | P72 |
| Exp/Bed | $1.1M | $433K | $723K | $1.6M | 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.