Bridge Realization Estimate
ML model predicts what fraction of the bridge is achievable (accuracy: 60%, n=5,839)
Expected realization: 69% of modeled bridge. Strengths: Occupancy Rate. Risks: Revenue per Bed. Risk-adjusted uplift: $2.0M (vs $2.9M 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 | $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 | $167K | $496K | $663K | $2.1M | 9mo |
| Clean Claim Rate | 88.0% DEFAULT | 96.0% BENCHMARK | $0 | $35K | $35K | $0 | 6mo |
| Net Collection Rate | 93.5% DEFAULT | 35.1% 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 | $273K | $545K | $818K | $1.1M | $1.1M | $1.1M | $1.1M |
| Denial Rate Reduction | $0 | $270K | $540K | $810K | $1.1M | $1.1M | $1.1M | $1.1M |
| A/R Days Reduction | $0 | $221K | $442K | $663K | $663K | $663K | $663K | $663K |
| Clean Claim Rate | $0 | $17K | $35K | $35K | $35K | $35K | $35K | $35K |
| Cumulative | $0 | $781K | $1.6M | $2.3M | $2.9M | $2.9M | $2.9M | $2.9M |
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 $2.9M is added at exit.
| Entry \ Exit | 9.0x | 10.0x | 11.0x | 11.5x | 12.0x |
|---|---|---|---|---|---|
| 8.0x | -100% / 0.0x | -100% / 0.0x | -100% / 0.0x | -100% / 0.0x | -100% / 0.0x |
| 9.0x | -100% / 0.0x | -100% / 0.0x | -100% / 0.0x | -100% / 0.0x | -100% / 0.0x |
| 10.0x | -100% / 0.0x | -100% / 0.0x | -100% / 0.0x | -100% / 0.0x | -100% / 0.0x |
| 11.0x | -100% / 0.0x | -100% / 0.0x | -100% / 0.0x | -100% / 0.0x | -100% / 0.0x |
| 12.0x | -100% / 0.0x | -100% / 0.0x | -100% / 0.0x | -100% / 0.0x | -100% / 0.0x |
Covenant Headroom (at 10x Entry, 6.5x Max Leverage)
Pro forma EBITDA can decline 168% before the 6.5x covenant trips. RCM uplift reduces leverage from 99.0x to -4.4x, adding 103.4 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 | $-981K | — | $-981K | -1.8% |
| Year 1 | $-1.0M | +$1.9M | $902K | 1.7% |
| Year 2 | $-1.0M | +$2.9M | $1.8M | 3.4% |
| Year 3 | $-1.1M | +$2.9M | $1.8M | 3.3% |
| Year 4 | $-1.1M | +$2.9M | $1.8M | 3.2% |
| Year 5 | $-1.1M | +$2.9M | $1.7M | 3.2% |
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 | $545K | $818K | $1.1M | $1.3M |
| Denial Rate Reductio | $540K | $810K | $1.1M | $1.3M |
| A/R Days Reduction | $332K | $498K | $663K | $796K |
| Clean Claim Rate | $17K | $26K | $35K | $42K |
| Total | $1.4M | $2.2M | $2.9M | $3.4M |
Peer Context — Where This Hospital Sits
Key metrics vs 102 size-matched peers. Low percentile on margin/efficiency metrics = more room for improvement = larger bridge opportunity.
| Metric | Hospital | P25 | P50 | P75 | Percentile |
|---|---|---|---|---|---|
| Op Margin | -1.8% | -19.0% | -5.4% | 7.8% | P57 |
| Net-to-Gross | 19.0% | 17.7% | 26.7% | 35.1% | P29 |
| Occupancy | 61.0% | 39.6% | 59.0% | 77.3% | P56 |
| Rev/Bed | $500K | $477K | $782K | $1.3M | P31 |
| Exp/Bed | $509K | $441K | $929K | $1.4M | P30 |
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.