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: Occupancy Rate, Revenue per Bed. Risk-adjusted uplift: $3.3M (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 | $47K | $1.7M | $0 | 12mo |
| A/R Days Reduction | 52.00 DEFAULT | 38.00 BENCHMARK | $264K | $782K | $1.0M | $3.3M | 9mo |
| Clean Claim Rate | 88.0% DEFAULT | 96.0% BENCHMARK | $0 | $55K | $55K | $0 | 6mo |
| Net Collection Rate | 93.5% DEFAULT | 44.0% 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 | $429K | $859K | $1.3M | $1.7M | $1.7M | $1.7M | $1.7M |
| Denial Rate Reduction | $0 | $425K | $850K | $1.3M | $1.7M | $1.7M | $1.7M | $1.7M |
| A/R Days Reduction | $0 | $348K | $697K | $1.0M | $1.0M | $1.0M | $1.0M | $1.0M |
| Clean Claim Rate | $0 | $27K | $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 | 221% / 343.4x | 228% / 382.0x | 235% / 420.5x | 238% / 439.7x | 241% / 459.0x |
| 9.0x | 214% / 304.9x | 221% / 339.2x | 227% / 373.4x | 230% / 390.5x | 233% / 407.6x |
| 10.0x | 207% / 274.1x | 214% / 304.9x | 220% / 335.7x | 223% / 351.1x | 226% / 366.6x |
| 11.0x | 201% / 248.9x | 208% / 276.9x | 214% / 304.9x | 217% / 318.9x | 219% / 332.9x |
| 12.0x | 196% / 227.9x | 203% / 253.6x | 208% / 279.2x | 211% / 292.1x | 214% / 304.9x |
Covenant Headroom (at 10x Entry, 6.5x Max Leverage)
Pro forma EBITDA can decline 97% before the 6.5x covenant trips. RCM uplift reduces leverage from 8.5x to 0.2x, adding 8.3 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 | $98K | — | $98K | 0.1% |
| Year 1 | $101K | +$3.0M | $3.1M | 3.6% |
| Year 2 | $104K | +$4.5M | $4.6M | 5.4% |
| Year 3 | $107K | +$4.5M | $4.6M | 5.4% |
| Year 4 | $110K | +$4.5M | $4.6M | 5.4% |
| Year 5 | $113K | +$4.5M | $4.6M | 5.4% |
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 | $859K | $1.3M | $1.7M | $2.1M |
| Denial Rate Reductio | $850K | $1.3M | $1.7M | $2.0M |
| A/R Days Reduction | $523K | $784K | $1.0M | $1.3M |
| Clean Claim Rate | $27K | $41K | $55K | $66K |
| Total | $2.3M | $3.4M | $4.5M | $5.4M |
Peer Context — Where This Hospital Sits
Key metrics vs 82 size-matched peers. Low percentile on margin/efficiency metrics = more room for improvement = larger bridge opportunity.
| Metric | Hospital | P25 | P50 | P75 | Percentile |
|---|---|---|---|---|---|
| Op Margin | 0.1% | -12.5% | 1.7% | 9.0% | P46 |
| Net-to-Gross | 16.5% | 21.7% | 31.7% | 44.0% | P14 |
| Occupancy | 62.3% | 27.9% | 46.8% | 69.3% | P70 |
| Rev/Bed | $2.1M | $414K | $841K | $1.8M | P79 |
| Exp/Bed | $2.1M | $391K | $963K | $1.5M | P85 |
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.