Bridge Realization Estimate
ML model predicts what fraction of the bridge is achievable (accuracy: 60%, n=5,839)
Expected realization: 71% of modeled bridge. Strengths: Occupancy Rate. Risks: Bed Count, Commercial Payer %. Risk-adjusted uplift: $39.3M (vs $55.5M 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 | $21.1M | $21.1M | $0 | 12mo |
| Denial Rate Reduction | 12.0% DEFAULT | 6.5% BENCHMARK | $20.3M | $581K | $20.9M | $0 | 12mo |
| A/R Days Reduction | 52.00 DEFAULT | 38.00 BENCHMARK | $3.2M | $9.6M | $12.8M | $40.5M | 9mo |
| Clean Claim Rate | 88.0% DEFAULT | 96.0% BENCHMARK | $0 | $676K | $676K | $0 | 6mo |
| Net Collection Rate | 93.5% DEFAULT | 27.1% 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 | $5.3M | $10.6M | $15.8M | $21.1M | $21.1M | $21.1M | $21.1M |
| Denial Rate Reduction | $0 | $5.2M | $10.5M | $15.7M | $20.9M | $20.9M | $20.9M | $20.9M |
| A/R Days Reduction | $0 | $4.3M | $8.6M | $12.8M | $12.8M | $12.8M | $12.8M | $12.8M |
| Clean Claim Rate | $0 | $338K | $676K | $676K | $676K | $676K | $676K | $676K |
| Cumulative | $0 | $15.1M | $30.2M | $45.0M | $55.5M | $55.5M | $55.5M | $55.5M |
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 $55.5M is added at exit.
| Entry \ Exit | 9.0x | 10.0x | 11.0x | 11.5x | 12.0x |
|---|---|---|---|---|---|
| 8.0x | 180% / 173.3x | 186% / 192.9x | 192% / 212.6x | 195% / 222.4x | 197% / 232.2x |
| 9.0x | 174% / 153.7x | 180% / 171.1x | 185% / 188.6x | 188% / 197.3x | 190% / 206.0x |
| 10.0x | 168% / 138.0x | 174% / 153.7x | 179% / 169.4x | 182% / 177.2x | 184% / 185.1x |
| 11.0x | 163% / 125.2x | 168% / 139.4x | 174% / 153.7x | 176% / 160.8x | 179% / 168.0x |
| 12.0x | 158% / 114.5x | 164% / 127.5x | 169% / 140.6x | 171% / 147.2x | 174% / 153.7x |
Covenant Headroom (at 10x Entry, 6.5x Max Leverage)
Pro forma EBITDA can decline 95% before the 6.5x covenant trips. RCM uplift reduces leverage from 8.5x to 0.4x, adding 8.1 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 | $2.4M | — | $2.4M | 0.2% |
| Year 1 | $2.5M | +$37.0M | $39.5M | 3.7% |
| Year 2 | $2.6M | +$55.5M | $58.1M | 5.5% |
| Year 3 | $2.6M | +$55.5M | $58.2M | 5.5% |
| Year 4 | $2.7M | +$55.5M | $58.3M | 5.5% |
| Year 5 | $2.8M | +$55.5M | $58.3M | 5.5% |
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 | $10.6M | $15.8M | $21.1M | $25.3M |
| Denial Rate Reductio | $10.5M | $15.7M | $20.9M | $25.1M |
| A/R Days Reduction | $6.4M | $9.6M | $12.8M | $15.4M |
| Clean Claim Rate | $338K | $507K | $676K | $811K |
| Total | $27.8M | $41.7M | $55.5M | $66.6M |
Peer Context — Where This Hospital Sits
Key metrics vs 14 size-matched peers. Low percentile on margin/efficiency metrics = more room for improvement = larger bridge opportunity.
| Metric | Hospital | P25 | P50 | P75 | Percentile |
|---|---|---|---|---|---|
| Op Margin | 0.2% | -11.8% | -6.0% | 1.4% | P57 |
| Net-to-Gross | 20.1% | 16.0% | 20.6% | 27.1% | P43 |
| Occupancy | 88.0% | 71.2% | 73.8% | 79.3% | P86 |
| Rev/Bed | $1.6M | $1.0M | $1.3M | $1.5M | P79 |
| Exp/Bed | $1.6M | $1.1M | $1.3M | $1.5M | P79 |
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.