Bridge Realization Estimate
ML model predicts what fraction of the bridge is achievable (accuracy: 60%, n=5,839)
Expected realization: 66% of modeled bridge. Strengths: Bed Count, Revenue per Bed. Risks: Occupancy Rate. Risk-adjusted uplift: $1.9M (vs $2.8M 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 | $1.1M | $1.1M | $0 | 12mo |
| Denial Rate Reduction | 12.0% DEFAULT | 6.5% BENCHMARK | $1.0M | $30K | $1.1M | $0 | 12mo |
| A/R Days Reduction | 52.00 DEFAULT | 38.00 BENCHMARK | $165K | $489K | $654K | $2.1M | 9mo |
| Clean Claim Rate | 88.0% DEFAULT | 96.0% BENCHMARK | $0 | $34K | $34K | $0 | 6mo |
| Net Collection Rate | 93.5% DEFAULT | 41.6% 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 | $269K | $537K | $806K | $1.1M | $1.1M | $1.1M | $1.1M |
| Denial Rate Reduction | $0 | $266K | $532K | $798K | $1.1M | $1.1M | $1.1M | $1.1M |
| A/R Days Reduction | $0 | $218K | $436K | $654K | $654K | $654K | $654K | $654K |
| Clean Claim Rate | $0 | $17K | $34K | $34K | $34K | $34K | $34K | $34K |
| Cumulative | $0 | $770K | $1.5M | $2.3M | $2.8M | $2.8M | $2.8M | $2.8M |
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 $2.8M is added at exit.
| Entry \ Exit | 9.0x | 10.0x | 11.0x | 11.5x | 12.0x |
|---|---|---|---|---|---|
| 8.0x | 108% / 39.3x | 113% / 44.0x | 118% / 48.7x | 120% / 51.1x | 122% / 53.4x |
| 9.0x | 103% / 34.5x | 108% / 38.8x | 112% / 43.0x | 114% / 45.0x | 116% / 47.1x |
| 10.0x | 98% / 30.8x | 103% / 34.5x | 107% / 38.3x | 109% / 40.2x | 111% / 42.1x |
| 11.0x | 94% / 27.7x | 99% / 31.1x | 103% / 34.5x | 105% / 36.3x | 107% / 38.0x |
| 12.0x | 91% / 25.1x | 95% / 28.2x | 99% / 31.4x | 101% / 33.0x | 103% / 34.5x |
Covenant Headroom (at 10x Entry, 6.5x Max Leverage)
Pro forma EBITDA can decline 77% before the 6.5x covenant trips. RCM uplift reduces leverage from 8.5x to 1.5x, adding 7.0 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 | $607K | — | $607K | 1.1% |
| Year 1 | $625K | +$1.9M | $2.5M | 4.7% |
| Year 2 | $644K | +$2.8M | $3.5M | 6.5% |
| Year 3 | $663K | +$2.8M | $3.5M | 6.5% |
| Year 4 | $683K | +$2.8M | $3.5M | 6.5% |
| Year 5 | $704K | +$2.8M | $3.5M | 6.6% |
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 | $537K | $806K | $1.1M | $1.3M |
| Denial Rate Reductio | $532K | $798K | $1.1M | $1.3M |
| A/R Days Reduction | $327K | $490K | $654K | $784K |
| Clean Claim Rate | $17K | $26K | $34K | $41K |
| Total | $1.4M | $2.1M | $2.8M | $3.4M |
Peer Context — Where This Hospital Sits
Key metrics vs 59 size-matched peers. Low percentile on margin/efficiency metrics = more room for improvement = larger bridge opportunity.
| Metric | Hospital | P25 | P50 | P75 | Percentile |
|---|---|---|---|---|---|
| Op Margin | 1.1% | -19.4% | -1.5% | 5.7% | P58 |
| Net-to-Gross | 50.0% | 24.6% | 31.2% | 41.6% | P85 |
| Occupancy | 38.6% | 18.4% | 35.6% | 54.5% | P53 |
| Rev/Bed | $2.1M | $419K | $1.1M | $2.1M | P76 |
| Exp/Bed | $2.1M | $547K | $1.2M | $1.9M | P76 |
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.