Bridge Realization Estimate
ML model predicts what fraction of the bridge is achievable (accuracy: 60%, n=5,839)
Expected realization: 68% of modeled bridge. Strengths: Occupancy Rate. Risks: Revenue per Bed, Net-to-Gross Ratio. Risk-adjusted uplift: $2.9M (vs $4.3M 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 | $1.6M | $1.6M | $0 | 12mo |
| Denial Rate Reduction | 12.0% DEFAULT | 6.5% BENCHMARK | $1.6M | $45K | $1.6M | $0 | 12mo |
| A/R Days Reduction | 52.00 DEFAULT | 38.00 BENCHMARK | $251K | $743K | $994K | $3.1M | 9mo |
| Clean Claim Rate | 88.0% DEFAULT | 96.0% BENCHMARK | $0 | $52K | $52K | $0 | 6mo |
| Net Collection Rate | 93.5% DEFAULT | 75.7% 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 | $408K | $817K | $1.2M | $1.6M | $1.6M | $1.6M | $1.6M |
| Denial Rate Reduction | $0 | $404K | $808K | $1.2M | $1.6M | $1.6M | $1.6M | $1.6M |
| A/R Days Reduction | $0 | $331K | $662K | $994K | $994K | $994K | $994K | $994K |
| Clean Claim Rate | $0 | $26K | $52K | $52K | $52K | $52K | $52K | $52K |
| Cumulative | $0 | $1.2M | $2.3M | $3.5M | $4.3M | $4.3M | $4.3M | $4.3M |
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 $4.3M is added at exit.
| Entry \ Exit | 9.0x | 10.0x | 11.0x | 11.5x | 12.0x |
|---|---|---|---|---|---|
| 8.0x | 130% / 64.9x | 136% / 72.5x | 140% / 80.0x | 142% / 83.8x | 145% / 87.6x |
| 9.0x | 125% / 57.3x | 130% / 64.0x | 134% / 70.8x | 137% / 74.1x | 139% / 77.5x |
| 10.0x | 120% / 51.2x | 125% / 57.3x | 129% / 63.4x | 131% / 66.4x | 134% / 69.4x |
| 11.0x | 115% / 46.3x | 120% / 51.8x | 125% / 57.3x | 127% / 60.1x | 129% / 62.8x |
| 12.0x | 111% / 42.2x | 116% / 47.2x | 121% / 52.3x | 123% / 54.8x | 125% / 57.3x |
Covenant Headroom (at 10x Entry, 6.5x Max Leverage)
Pro forma EBITDA can decline 86% before the 6.5x covenant trips. RCM uplift reduces leverage from 8.5x to 0.9x, adding 7.5 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 | $527K | — | $527K | 0.6% |
| Year 1 | $542K | +$2.9M | $3.4M | 4.2% |
| Year 2 | $559K | +$4.3M | $4.9M | 5.9% |
| Year 3 | $575K | +$4.3M | $4.9M | 6.0% |
| Year 4 | $593K | +$4.3M | $4.9M | 6.0% |
| Year 5 | $610K | +$4.3M | $4.9M | 6.0% |
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 | $817K | $1.2M | $1.6M | $2.0M |
| Denial Rate Reductio | $808K | $1.2M | $1.6M | $1.9M |
| A/R Days Reduction | $497K | $745K | $994K | $1.2M |
| Clean Claim Rate | $26K | $39K | $52K | $63K |
| Total | $2.1M | $3.2M | $4.3M | $5.2M |
Peer Context — Where This Hospital Sits
Key metrics vs 37 size-matched peers. Low percentile on margin/efficiency metrics = more room for improvement = larger bridge opportunity.
| Metric | Hospital | P25 | P50 | P75 | Percentile |
|---|---|---|---|---|---|
| Op Margin | 0.6% | -20.7% | -5.7% | 1.2% | P70 |
| Net-to-Gross | 66.6% | 55.0% | 60.7% | 75.7% | P68 |
| Occupancy | 71.6% | 45.4% | 69.3% | 74.6% | P62 |
| Rev/Bed | $394K | $244K | $364K | $466K | P57 |
| Exp/Bed | $392K | $294K | $394K | $476K | P46 |
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.