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: Occupancy Rate, Payer Diversity. Risks: Bed Count, Net-to-Gross Ratio. Risk-adjusted uplift: $7.9M (vs $11.7M 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 |
|---|---|---|---|---|---|---|---|
| Net Collection Rate | 93.5% DEFAULT | 97.0% BENCHMARK | $3.3M | $0 | $3.3M | $0 | 18mo |
| Cost to Collect | 4.5% DEFAULT | 2.5% BENCHMARK | $0 | $3.2M | $3.2M | $0 | 12mo |
| Denial Rate Reduction | 12.0% DEFAULT | 6.5% BENCHMARK | $3.1M | $88K | $3.2M | $0 | 12mo |
| A/R Days Reduction | 52.00 DEFAULT | 38.00 BENCHMARK | $489K | $1.5M | $1.9M | $6.1M | 9mo |
| Clean Claim Rate | 88.0% DEFAULT | 96.0% BENCHMARK | $0 | $102K | $102K | $0 | 6mo |
| 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 |
|---|---|---|---|---|---|---|---|---|
| Net Collection Rate | $0 | $558K | $1.1M | $1.7M | $2.2M | $3.3M | $3.3M | $3.3M |
| Cost to Collect | $0 | $797K | $1.6M | $2.4M | $3.2M | $3.2M | $3.2M | $3.2M |
| Denial Rate Reduction | $0 | $789K | $1.6M | $2.4M | $3.2M | $3.2M | $3.2M | $3.2M |
| A/R Days Reduction | $0 | $647K | $1.3M | $1.9M | $1.9M | $1.9M | $1.9M | $1.9M |
| Clean Claim Rate | $0 | $51K | $102K | $102K | $102K | $102K | $102K | $102K |
| Cumulative | $0 | $2.8M | $5.7M | $8.5M | $10.6M | $11.7M | $11.7M | $11.7M |
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 $11.7M is added at exit.
| Entry \ Exit | 9.0x | 10.0x | 11.0x | 11.5x | 12.0x |
|---|---|---|---|---|---|
| 8.0x | 64% / 12.0x | 69% / 13.7x | 73% / 15.3x | 74% / 16.2x | 76% / 17.0x |
| 9.0x | 59% / 10.3x | 64% / 11.8x | 68% / 13.3x | 70% / 14.0x | 71% / 14.8x |
| 10.0x | 55% / 8.9x | 59% / 10.3x | 63% / 11.6x | 65% / 12.3x | 67% / 13.0x |
| 11.0x | 51% / 7.8x | 55% / 9.0x | 59% / 10.3x | 61% / 10.9x | 63% / 11.5x |
| 12.0x | 47% / 6.9x | 52% / 8.0x | 56% / 9.1x | 58% / 9.7x | 59% / 10.3x |
Covenant Headroom (at 10x Entry, 6.5x Max Leverage)
Pro forma EBITDA can decline 32% before the 6.5x covenant trips. RCM uplift reduces leverage from 8.5x to 4.4x, adding 4.1 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 | $12.8M | — | $12.8M | 8.0% |
| Year 1 | $13.1M | +$7.8M | $21.0M | 13.1% |
| Year 2 | $13.5M | +$11.7M | $25.3M | 15.8% |
| Year 3 | $13.9M | +$11.7M | $25.7M | 16.1% |
| Year 4 | $14.4M | +$11.7M | $26.1M | 16.4% |
| Year 5 | $14.8M | +$11.7M | $26.5M | 16.6% |
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% |
|---|---|---|---|---|
| Net Collection Rate | $1.7M | $2.5M | $3.3M | $4.0M |
| Cost to Collect | $1.6M | $2.4M | $3.2M | $3.8M |
| Denial Rate Reductio | $1.6M | $2.4M | $3.2M | $3.8M |
| A/R Days Reduction | $970K | $1.5M | $1.9M | $2.3M |
| Clean Claim Rate | $51K | $77K | $102K | $122K |
| Total | $5.9M | $8.8M | $11.7M | $14.1M |
Peer Context — Where This Hospital Sits
Key metrics vs 10 size-matched peers. Low percentile on margin/efficiency metrics = more room for improvement = larger bridge opportunity.
| Metric | Hospital | P25 | P50 | P75 | Percentile |
|---|---|---|---|---|---|
| Op Margin | -50.0% | -23.2% | -6.3% | -5.6% | P0 |
| Net-to-Gross | 100.0% | 35.0% | 38.5% | 42.9% | P89 |
| Occupancy | 91.6% | 71.1% | 77.6% | 84.6% | P90 |
| Rev/Bed | $276K | $1.9M | $2.4M | $2.5M | P0 |
| Exp/Bed | $700K | $2.0M | $2.3M | $3.0M | P0 |
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.