Bridge Realization Estimate
ML model predicts what fraction of the bridge is achievable (accuracy: 60%, n=5,839)
Expected realization: 73% of modeled bridge. Strengths: Occupancy Rate, Net-to-Gross Ratio. Risks: Bed Count. Risk-adjusted uplift: $18.1M (vs $24.9M 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 | $9.5M | $9.5M | $0 | 12mo |
| Denial Rate Reduction | 12.0% DEFAULT | 6.5% BENCHMARK | $9.1M | $261K | $9.4M | $0 | 12mo |
| A/R Days Reduction | 52.00 DEFAULT | 38.00 BENCHMARK | $1.5M | $4.3M | $5.8M | $18.2M | 9mo |
| Clean Claim Rate | 88.0% DEFAULT | 96.0% BENCHMARK | $0 | $303K | $303K | $0 | 6mo |
| Net Collection Rate | 93.5% DEFAULT | 28.5% 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 | $2.4M | $4.7M | $7.1M | $9.5M | $9.5M | $9.5M | $9.5M |
| Denial Rate Reduction | $0 | $2.3M | $4.7M | $7.0M | $9.4M | $9.4M | $9.4M | $9.4M |
| A/R Days Reduction | $0 | $1.9M | $3.8M | $5.8M | $5.8M | $5.8M | $5.8M | $5.8M |
| Clean Claim Rate | $0 | $152K | $303K | $303K | $303K | $303K | $303K | $303K |
| Cumulative | $0 | $6.8M | $13.6M | $20.2M | $24.9M | $24.9M | $24.9M | $24.9M |
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 $24.9M is added at exit.
| Entry \ Exit | 9.0x | 10.0x | 11.0x | 11.5x | 12.0x |
|---|---|---|---|---|---|
| 8.0x | 78% / 17.7x | 82% / 20.0x | 86% / 22.3x | 88% / 23.5x | 90% / 24.6x |
| 9.0x | 73% / 15.3x | 77% / 17.4x | 81% / 19.5x | 83% / 20.5x | 85% / 21.6x |
| 10.0x | 68% / 13.5x | 73% / 15.3x | 77% / 17.2x | 79% / 18.1x | 80% / 19.1x |
| 11.0x | 64% / 12.0x | 69% / 13.7x | 73% / 15.3x | 75% / 16.2x | 76% / 17.0x |
| 12.0x | 61% / 10.7x | 65% / 12.2x | 69% / 13.8x | 71% / 14.6x | 73% / 15.3x |
Covenant Headroom (at 10x Entry, 6.5x Max Leverage)
Pro forma EBITDA can decline 52% before the 6.5x covenant trips. RCM uplift reduces leverage from 8.5x to 3.1x, adding 5.3 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 | $14.7M | — | $14.7M | 3.1% |
| Year 1 | $15.1M | +$16.6M | $31.7M | 6.7% |
| Year 2 | $15.5M | +$24.9M | $40.5M | 8.5% |
| Year 3 | $16.0M | +$24.9M | $41.0M | 8.6% |
| Year 4 | $16.5M | +$24.9M | $41.4M | 8.7% |
| Year 5 | $17.0M | +$24.9M | $41.9M | 8.8% |
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 | $4.7M | $7.1M | $9.5M | $11.4M |
| Denial Rate Reductio | $4.7M | $7.0M | $9.4M | $11.3M |
| A/R Days Reduction | $2.9M | $4.3M | $5.8M | $6.9M |
| Clean Claim Rate | $152K | $228K | $303K | $364K |
| Total | $12.5M | $18.7M | $24.9M | $29.9M |
Peer Context — Where This Hospital Sits
Key metrics vs 79 size-matched peers. Low percentile on margin/efficiency metrics = more room for improvement = larger bridge opportunity.
| Metric | Hospital | P25 | P50 | P75 | Percentile |
|---|---|---|---|---|---|
| Op Margin | 3.1% | -16.7% | -8.0% | -0.9% | P83 |
| Net-to-Gross | 12.4% | 15.6% | 22.2% | 28.5% | P0 |
| Occupancy | 77.3% | 53.7% | 62.8% | 77.3% | P75 |
| Rev/Bed | $1.8M | $988K | $1.3M | $1.7M | P81 |
| Exp/Bed | $1.7M | $929K | $1.4M | $1.7M | P73 |
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.