Bridge Realization Estimate
ML model predicts what fraction of the bridge is achievable (accuracy: 60%, n=5,839)
Expected realization: 65% of modeled bridge. Strengths: Net-to-Gross Ratio. Risks: Occupancy Rate, Revenue per Bed. Risk-adjusted uplift: $4.9M (vs $7.6M 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 | $2.9M | $2.9M | $0 | 12mo |
| Denial Rate Reduction | 12.0% DEFAULT | 6.5% BENCHMARK | $2.8M | $79K | $2.8M | $0 | 12mo |
| A/R Days Reduction | 52.00 DEFAULT | 38.00 BENCHMARK | $440K | $1.3M | $1.7M | $5.5M | 9mo |
| Clean Claim Rate | 88.0% DEFAULT | 96.0% BENCHMARK | $0 | $92K | $92K | $0 | 6mo |
| Net Collection Rate | 93.5% DEFAULT | 33.6% 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 | $718K | $1.4M | $2.2M | $2.9M | $2.9M | $2.9M | $2.9M |
| Denial Rate Reduction | $0 | $710K | $1.4M | $2.1M | $2.8M | $2.8M | $2.8M | $2.8M |
| A/R Days Reduction | $0 | $582K | $1.2M | $1.7M | $1.7M | $1.7M | $1.7M | $1.7M |
| Clean Claim Rate | $0 | $46K | $92K | $92K | $92K | $92K | $92K | $92K |
| Cumulative | $0 | $2.1M | $4.1M | $6.1M | $7.6M | $7.6M | $7.6M | $7.6M |
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 $7.6M is added at exit.
| Entry \ Exit | 9.0x | 10.0x | 11.0x | 11.5x | 12.0x |
|---|---|---|---|---|---|
| 8.0x | 112% / 42.6x | 117% / 47.7x | 121% / 52.8x | 123% / 55.3x | 125% / 57.9x |
| 9.0x | 106% / 37.5x | 111% / 42.0x | 116% / 46.6x | 118% / 48.8x | 120% / 51.1x |
| 10.0x | 102% / 33.4x | 106% / 37.5x | 111% / 41.6x | 113% / 43.6x | 115% / 45.6x |
| 11.0x | 98% / 30.1x | 102% / 33.8x | 106% / 37.5x | 108% / 39.4x | 110% / 41.2x |
| 12.0x | 94% / 27.3x | 98% / 30.7x | 103% / 34.1x | 105% / 35.8x | 106% / 37.5x |
Covenant Headroom (at 10x Entry, 6.5x Max Leverage)
Pro forma EBITDA can decline 79% before the 6.5x covenant trips. RCM uplift reduces leverage from 8.5x to 1.4x, adding 7.1 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 | $1.5M | — | $1.5M | 1.0% |
| Year 1 | $1.5M | +$5.0M | $6.6M | 4.6% |
| Year 2 | $1.6M | +$7.6M | $9.1M | 6.4% |
| Year 3 | $1.6M | +$7.6M | $9.2M | 6.4% |
| Year 4 | $1.7M | +$7.6M | $9.2M | 6.4% |
| Year 5 | $1.7M | +$7.6M | $9.3M | 6.5% |
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 | $1.4M | $2.2M | $2.9M | $3.4M |
| Denial Rate Reductio | $1.4M | $2.1M | $2.8M | $3.4M |
| A/R Days Reduction | $873K | $1.3M | $1.7M | $2.1M |
| Clean Claim Rate | $46K | $69K | $92K | $110K |
| Total | $3.8M | $5.7M | $7.6M | $9.1M |
Peer Context — Where This Hospital Sits
Key metrics vs 103 size-matched peers. Low percentile on margin/efficiency metrics = more room for improvement = larger bridge opportunity.
| Metric | Hospital | P25 | P50 | P75 | Percentile |
|---|---|---|---|---|---|
| Op Margin | 1.0% | -19.0% | -7.5% | 4.9% | P67 |
| Net-to-Gross | 14.7% | 18.2% | 25.0% | 33.5% | P11 |
| Occupancy | 44.3% | 45.0% | 59.3% | 75.0% | P23 |
| Rev/Bed | $990K | $519K | $1.0M | $1.5M | P45 |
| Exp/Bed | $980K | $547K | $1.1M | $1.6M | P41 |
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.