Bridge Realization Estimate
ML model predicts what fraction of the bridge is achievable (accuracy: 60%, n=5,839)
Expected realization: 72% of modeled bridge. Strengths: Revenue per Bed, Bed Count. Risk-adjusted uplift: $2.4M (vs $3.3M 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 | $1.2M | $1.2M | $0 | 12mo |
| Denial Rate Reduction | 12.0% DEFAULT | 6.5% BENCHMARK | $1.2M | $34K | $1.2M | $0 | 12mo |
| A/R Days Reduction | 52.00 DEFAULT | 38.00 BENCHMARK | $191K | $568K | $759K | $2.4M | 9mo |
| Clean Claim Rate | 88.0% DEFAULT | 96.0% BENCHMARK | $0 | $40K | $40K | $0 | 6mo |
| Net Collection Rate | 93.5% DEFAULT | 62.4% 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 | $312K | $624K | $936K | $1.2M | $1.2M | $1.2M | $1.2M |
| Denial Rate Reduction | $0 | $309K | $618K | $926K | $1.2M | $1.2M | $1.2M | $1.2M |
| A/R Days Reduction | $0 | $253K | $506K | $759K | $759K | $759K | $759K | $759K |
| Clean Claim Rate | $0 | $20K | $40K | $40K | $40K | $40K | $40K | $40K |
| Cumulative | $0 | $894K | $1.8M | $2.7M | $3.3M | $3.3M | $3.3M | $3.3M |
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 $3.3M is added at exit.
| Entry \ Exit | 9.0x | 10.0x | 11.0x | 11.5x | 12.0x |
|---|---|---|---|---|---|
| 8.0x | 47% / 6.8x | 51% / 7.9x | 55% / 9.0x | 57% / 9.6x | 59% / 10.1x |
| 9.0x | 42% / 5.7x | 46% / 6.7x | 50% / 7.7x | 52% / 8.2x | 54% / 8.7x |
| 10.0x | 37% / 4.8x | 42% / 5.7x | 46% / 6.6x | 48% / 7.0x | 49% / 7.5x |
| 11.0x | 32% / 4.0x | 37% / 4.9x | 42% / 5.7x | 43% / 6.1x | 45% / 6.5x |
| 12.0x | 28% / 3.4x | 33% / 4.2x | 38% / 4.9x | 40% / 5.3x | 42% / 5.7x |
Covenant Headroom (at 10x Entry, 6.5x Max Leverage)
Pro forma EBITDA can decline -7% before the 6.5x covenant trips. RCM uplift reduces leverage from 8.5x to 7.0x, adding 1.5 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 | $15.4M | — | $15.4M | 24.6% |
| Year 1 | $15.8M | +$2.2M | $18.0M | 28.9% |
| Year 2 | $16.3M | +$3.3M | $19.6M | 31.4% |
| Year 3 | $16.8M | +$3.3M | $20.1M | 32.2% |
| Year 4 | $17.3M | +$3.3M | $20.6M | 33.0% |
| Year 5 | $17.8M | +$3.3M | $21.1M | 33.8% |
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 | $624K | $936K | $1.2M | $1.5M |
| Denial Rate Reductio | $618K | $926K | $1.2M | $1.5M |
| A/R Days Reduction | $380K | $569K | $759K | $911K |
| Clean Claim Rate | $20K | $30K | $40K | $48K |
| Total | $1.6M | $2.5M | $3.3M | $3.9M |
Peer Context — Where This Hospital Sits
Key metrics vs 24 size-matched peers. Low percentile on margin/efficiency metrics = more room for improvement = larger bridge opportunity.
| Metric | Hospital | P25 | P50 | P75 | Percentile |
|---|---|---|---|---|---|
| Op Margin | 24.6% | -12.7% | -4.8% | 3.8% | P96 |
| Net-to-Gross | 55.4% | 51.4% | 57.3% | 62.4% | P42 |
| Occupancy | 54.1% | 32.0% | 45.0% | 55.8% | P67 |
| Rev/Bed | $3.9M | $1.7M | $3.8M | $4.7M | P50 |
| Exp/Bed | $2.9M | $1.8M | $3.3M | $5.1M | P42 |
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.