Bridge Realization Estimate
ML model predicts what fraction of the bridge is achievable (accuracy: 60%, n=5,839)
Expected realization: 67% of modeled bridge. Strengths: Occupancy Rate. Risks: Bed Count. Risk-adjusted uplift: $9.8M (vs $14.6M 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 | $5.5M | $5.5M | $0 | 12mo |
| Denial Rate Reduction | 12.0% DEFAULT | 6.5% BENCHMARK | $5.3M | $153K | $5.5M | $0 | 12mo |
| A/R Days Reduction | 52.00 DEFAULT | 38.00 BENCHMARK | $851K | $2.5M | $3.4M | $10.6M | 9mo |
| Clean Claim Rate | 88.0% DEFAULT | 96.0% BENCHMARK | $0 | $178K | $178K | $0 | 6mo |
| Net Collection Rate | 93.5% DEFAULT | 27.8% 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 | $1.4M | $2.8M | $4.2M | $5.5M | $5.5M | $5.5M | $5.5M |
| Denial Rate Reduction | $0 | $1.4M | $2.7M | $4.1M | $5.5M | $5.5M | $5.5M | $5.5M |
| A/R Days Reduction | $0 | $1.1M | $2.3M | $3.4M | $3.4M | $3.4M | $3.4M | $3.4M |
| Clean Claim Rate | $0 | $89K | $178K | $178K | $178K | $178K | $178K | $178K |
| Cumulative | $0 | $4.0M | $7.9M | $11.8M | $14.6M | $14.6M | $14.6M | $14.6M |
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 $14.6M is added at exit.
| Entry \ Exit | 9.0x | 10.0x | 11.0x | 11.5x | 12.0x |
|---|---|---|---|---|---|
| 8.0x | 147% / 92.5x | 153% / 103.1x | 158% / 113.8x | 160% / 119.1x | 162% / 124.4x |
| 9.0x | 141% / 81.8x | 147% / 91.3x | 152% / 100.8x | 154% / 105.5x | 156% / 110.2x |
| 10.0x | 136% / 73.3x | 141% / 81.8x | 146% / 90.4x | 148% / 94.6x | 151% / 98.9x |
| 11.0x | 131% / 66.4x | 137% / 74.1x | 141% / 81.8x | 144% / 85.7x | 146% / 89.6x |
| 12.0x | 127% / 60.6x | 132% / 67.7x | 137% / 74.8x | 139% / 78.3x | 141% / 81.8x |
Covenant Headroom (at 10x Entry, 6.5x Max Leverage)
Pro forma EBITDA can decline 90% before the 6.5x covenant trips. RCM uplift reduces leverage from 8.5x to 0.7x, adding 7.8 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 | $1.2M | — | $1.2M | 0.4% |
| Year 1 | $1.3M | +$9.7M | $11.0M | 4.0% |
| Year 2 | $1.3M | +$14.6M | $15.9M | 5.7% |
| Year 3 | $1.3M | +$14.6M | $15.9M | 5.7% |
| Year 4 | $1.4M | +$14.6M | $16.0M | 5.8% |
| Year 5 | $1.4M | +$14.6M | $16.0M | 5.8% |
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 | $2.8M | $4.2M | $5.5M | $6.7M |
| Denial Rate Reductio | $2.7M | $4.1M | $5.5M | $6.6M |
| A/R Days Reduction | $1.7M | $2.5M | $3.4M | $4.1M |
| Clean Claim Rate | $89K | $133K | $178K | $213K |
| Total | $7.3M | $10.9M | $14.6M | $17.5M |
Peer Context — Where This Hospital Sits
Key metrics vs 22 size-matched peers. Low percentile on margin/efficiency metrics = more room for improvement = larger bridge opportunity.
| Metric | Hospital | P25 | P50 | P75 | Percentile |
|---|---|---|---|---|---|
| Op Margin | 0.4% | -7.2% | 1.6% | 7.9% | P45 |
| Net-to-Gross | 28.0% | 16.7% | 24.8% | 27.8% | P77 |
| Occupancy | 58.3% | 56.9% | 64.7% | 76.1% | P36 |
| Rev/Bed | $1.1M | $831K | $1.4M | $1.6M | P36 |
| Exp/Bed | $1.1M | $953K | $1.4M | $1.5M | P36 |
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.