Bridge Realization Estimate
ML model predicts what fraction of the bridge is achievable (accuracy: 60%, n=5,839)
Expected realization: 75% of modeled bridge. Strengths: Occupancy Rate. Risks: Bed Count, Commercial Payer %. Risk-adjusted uplift: $15.1M (vs $20.1M 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 | $7.6M | $7.6M | $0 | 12mo |
| Denial Rate Reduction | 12.0% DEFAULT | 6.5% BENCHMARK | $7.3M | $210K | $7.5M | $0 | 12mo |
| A/R Days Reduction | 52.00 DEFAULT | 38.00 BENCHMARK | $1.2M | $3.5M | $4.6M | $14.6M | 9mo |
| Clean Claim Rate | 88.0% DEFAULT | 96.0% BENCHMARK | $0 | $244K | $244K | $0 | 6mo |
| Net Collection Rate | 93.5% DEFAULT | 28.1% 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 | $1.9M | $3.8M | $5.7M | $7.6M | $7.6M | $7.6M | $7.6M |
| Denial Rate Reduction | $0 | $1.9M | $3.8M | $5.7M | $7.5M | $7.5M | $7.5M | $7.5M |
| A/R Days Reduction | $0 | $1.5M | $3.1M | $4.6M | $4.6M | $4.6M | $4.6M | $4.6M |
| Clean Claim Rate | $0 | $122K | $244K | $244K | $244K | $244K | $244K | $244K |
| Cumulative | $0 | $5.5M | $10.9M | $16.3M | $20.1M | $20.1M | $20.1M | $20.1M |
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 $20.1M is added at exit.
| Entry \ Exit | 9.0x | 10.0x | 11.0x | 11.5x | 12.0x |
|---|---|---|---|---|---|
| 8.0x | 66% / 12.4x | 70% / 14.2x | 74% / 15.9x | 76% / 16.8x | 78% / 17.6x |
| 9.0x | 61% / 10.7x | 65% / 12.2x | 69% / 13.8x | 71% / 14.5x | 73% / 15.3x |
| 10.0x | 56% / 9.3x | 61% / 10.7x | 65% / 12.1x | 66% / 12.8x | 68% / 13.5x |
| 11.0x | 52% / 8.1x | 57% / 9.4x | 61% / 10.7x | 62% / 11.3x | 64% / 11.9x |
| 12.0x | 48% / 7.2x | 53% / 8.4x | 57% / 9.5x | 59% / 10.1x | 61% / 10.7x |
Covenant Headroom (at 10x Entry, 6.5x Max Leverage)
Pro forma EBITDA can decline 34% before the 6.5x covenant trips. RCM uplift reduces leverage from 8.5x to 4.3x, adding 4.2 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 | $20.4M | — | $20.4M | 5.4% |
| Year 1 | $21.0M | +$13.4M | $34.4M | 9.0% |
| Year 2 | $21.6M | +$20.1M | $41.7M | 10.9% |
| Year 3 | $22.3M | +$20.1M | $42.3M | 11.1% |
| Year 4 | $23.0M | +$20.1M | $43.0M | 11.3% |
| Year 5 | $23.7M | +$20.1M | $43.7M | 11.5% |
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 | $3.8M | $5.7M | $7.6M | $9.1M |
| Denial Rate Reductio | $3.8M | $5.7M | $7.5M | $9.1M |
| A/R Days Reduction | $2.3M | $3.5M | $4.6M | $5.6M |
| Clean Claim Rate | $122K | $183K | $244K | $293K |
| Total | $10.0M | $15.0M | $20.1M | $24.1M |
Peer Context — Where This Hospital Sits
Key metrics vs 148 size-matched peers. Low percentile on margin/efficiency metrics = more room for improvement = larger bridge opportunity.
| Metric | Hospital | P25 | P50 | P75 | Percentile |
|---|---|---|---|---|---|
| Op Margin | 5.4% | -8.0% | 4.9% | 13.7% | P51 |
| Net-to-Gross | 20.4% | 13.7% | 19.0% | 28.1% | P53 |
| Occupancy | 91.7% | 51.8% | 66.5% | 75.7% | P95 |
| Rev/Bed | $1.7M | $632K | $1.2M | $1.5M | P82 |
| Exp/Bed | $1.6M | $671K | $1.1M | $1.5M | P82 |
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.