Bridge Realization Estimate
ML model predicts what fraction of the bridge is achievable (accuracy: 60%, n=5,839)
Expected realization: 73% of modeled bridge. Strengths: Occupancy Rate. Risks: Bed Count, Commercial Payer %. Risk-adjusted uplift: $17.1M (vs $23.5M 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 | $8.9M | $8.9M | $0 | 12mo |
| Denial Rate Reduction | 12.0% DEFAULT | 6.5% BENCHMARK | $8.6M | $246K | $8.9M | $0 | 12mo |
| A/R Days Reduction | 52.00 DEFAULT | 38.00 BENCHMARK | $1.4M | $4.1M | $5.4M | $17.2M | 9mo |
| Clean Claim Rate | 88.0% DEFAULT | 96.0% BENCHMARK | $0 | $286K | $286K | $0 | 6mo |
| Net Collection Rate | 93.5% DEFAULT | 27.6% 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 | $2.2M | $4.5M | $6.7M | $8.9M | $8.9M | $8.9M | $8.9M |
| Denial Rate Reduction | $0 | $2.2M | $4.4M | $6.6M | $8.9M | $8.9M | $8.9M | $8.9M |
| A/R Days Reduction | $0 | $1.8M | $3.6M | $5.4M | $5.4M | $5.4M | $5.4M | $5.4M |
| Clean Claim Rate | $0 | $143K | $286K | $286K | $286K | $286K | $286K | $286K |
| Cumulative | $0 | $6.4M | $12.8M | $19.1M | $23.5M | $23.5M | $23.5M | $23.5M |
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 $23.5M is added at exit.
| Entry \ Exit | 9.0x | 10.0x | 11.0x | 11.5x | 12.0x |
|---|---|---|---|---|---|
| 8.0x | 102% / 33.7x | 107% / 37.8x | 111% / 42.0x | 113% / 44.0x | 115% / 46.1x |
| 9.0x | 97% / 29.6x | 102% / 33.3x | 106% / 36.9x | 108% / 38.8x | 110% / 40.6x |
| 10.0x | 92% / 26.3x | 97% / 29.6x | 101% / 32.9x | 103% / 34.5x | 105% / 36.2x |
| 11.0x | 88% / 23.6x | 93% / 26.6x | 97% / 29.6x | 99% / 31.1x | 101% / 32.6x |
| 12.0x | 85% / 21.4x | 89% / 24.1x | 93% / 26.9x | 95% / 28.2x | 97% / 29.6x |
Covenant Headroom (at 10x Entry, 6.5x Max Leverage)
Pro forma EBITDA can decline 73% before the 6.5x covenant trips. RCM uplift reduces leverage from 8.5x to 1.7x, adding 6.7 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 | $6.0M | — | $6.0M | 1.3% |
| Year 1 | $6.2M | +$15.7M | $21.9M | 4.9% |
| Year 2 | $6.4M | +$23.5M | $29.9M | 6.7% |
| Year 3 | $6.6M | +$23.5M | $30.1M | 6.7% |
| Year 4 | $6.8M | +$23.5M | $30.3M | 6.8% |
| Year 5 | $7.0M | +$23.5M | $30.5M | 6.8% |
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 | $4.5M | $6.7M | $8.9M | $10.7M |
| Denial Rate Reductio | $4.4M | $6.6M | $8.9M | $10.6M |
| A/R Days Reduction | $2.7M | $4.1M | $5.4M | $6.5M |
| Clean Claim Rate | $143K | $215K | $286K | $344K |
| Total | $11.8M | $17.7M | $23.5M | $28.2M |
Peer Context — Where This Hospital Sits
Key metrics vs 23 size-matched peers. Low percentile on margin/efficiency metrics = more room for improvement = larger bridge opportunity.
| Metric | Hospital | P25 | P50 | P75 | Percentile |
|---|---|---|---|---|---|
| Op Margin | 1.3% | -8.8% | 1.3% | 7.7% | P48 |
| Net-to-Gross | 21.9% | 14.0% | 20.1% | 27.6% | P61 |
| Occupancy | 87.6% | 67.2% | 74.2% | 80.7% | P91 |
| Rev/Bed | $1.3M | $1.1M | $1.3M | $1.4M | P48 |
| Exp/Bed | $1.2M | $908K | $1.2M | $1.4M | P48 |
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.