Bridge Realization Estimate
ML model predicts what fraction of the bridge is achievable (accuracy: 60%, n=5,839)
Expected realization: 76% of modeled bridge. Strengths: Occupancy Rate, Net-to-Gross Ratio. Risk-adjusted uplift: $3.4M (vs $4.5M 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 | $1.7M | $1.7M | $0 | 12mo |
| Denial Rate Reduction | 12.0% DEFAULT | 6.5% BENCHMARK | $1.7M | $48K | $1.7M | $0 | 12mo |
| A/R Days Reduction | 52.00 DEFAULT | 38.00 BENCHMARK | $265K | $787K | $1.1M | $3.3M | 9mo |
| Clean Claim Rate | 88.0% DEFAULT | 96.0% BENCHMARK | $0 | $55K | $55K | $0 | 6mo |
| Net Collection Rate | 93.5% DEFAULT | 38.4% 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 | $432K | $864K | $1.3M | $1.7M | $1.7M | $1.7M | $1.7M |
| Denial Rate Reduction | $0 | $428K | $856K | $1.3M | $1.7M | $1.7M | $1.7M | $1.7M |
| A/R Days Reduction | $0 | $351K | $701K | $1.1M | $1.1M | $1.1M | $1.1M | $1.1M |
| Clean Claim Rate | $0 | $28K | $55K | $55K | $55K | $55K | $55K | $55K |
| Cumulative | $0 | $1.2M | $2.5M | $3.7M | $4.5M | $4.5M | $4.5M | $4.5M |
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 $4.5M is added at exit.
| Entry \ Exit | 9.0x | 10.0x | 11.0x | 11.5x | 12.0x |
|---|---|---|---|---|---|
| 8.0x | 58% / 10.0x | 63% / 11.5x | 67% / 12.9x | 69% / 13.7x | 70% / 14.4x |
| 9.0x | 53% / 8.5x | 58% / 9.8x | 62% / 11.1x | 64% / 11.8x | 66% / 12.4x |
| 10.0x | 49% / 7.3x | 53% / 8.5x | 57% / 9.7x | 59% / 10.3x | 61% / 10.9x |
| 11.0x | 45% / 6.4x | 49% / 7.5x | 53% / 8.5x | 55% / 9.1x | 57% / 9.6x |
| 12.0x | 41% / 5.6x | 46% / 6.6x | 50% / 7.5x | 52% / 8.0x | 53% / 8.5x |
Covenant Headroom (at 10x Entry, 6.5x Max Leverage)
Pro forma EBITDA can decline 21% before the 6.5x covenant trips. RCM uplift reduces leverage from 8.5x to 5.1x, adding 3.3 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 | $7.0M | — | $7.0M | 8.1% |
| Year 1 | $7.2M | +$3.0M | $10.2M | 11.8% |
| Year 2 | $7.4M | +$4.5M | $12.0M | 13.8% |
| Year 3 | $7.6M | +$4.5M | $12.2M | 14.1% |
| Year 4 | $7.9M | +$4.5M | $12.4M | 14.4% |
| Year 5 | $8.1M | +$4.5M | $12.7M | 14.6% |
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 | $864K | $1.3M | $1.7M | $2.1M |
| Denial Rate Reductio | $856K | $1.3M | $1.7M | $2.1M |
| A/R Days Reduction | $526K | $789K | $1.1M | $1.3M |
| Clean Claim Rate | $28K | $41K | $55K | $66K |
| Total | $2.3M | $3.4M | $4.5M | $5.5M |
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 | 8.1% | -18.0% | 0.4% | 8.8% | P69 |
| Net-to-Gross | 12.7% | 17.8% | 30.4% | 38.4% | P9 |
| Occupancy | 82.7% | 33.9% | 55.2% | 74.2% | P89 |
| Rev/Bed | $1.7M | $394K | $558K | $1.3M | P81 |
| Exp/Bed | $1.5M | $384K | $648K | $1.3M | P78 |
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.