Bridge Realization Estimate
ML model predicts what fraction of the bridge is achievable (accuracy: 60%, n=5,839)
Expected realization: 69% of modeled bridge. Strengths: Occupancy Rate. Risk-adjusted uplift: $8.8M (vs $12.8M 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 | $4.9M | $4.9M | $0 | 12mo |
| Denial Rate Reduction | 12.0% DEFAULT | 6.5% BENCHMARK | $4.7M | $133K | $4.8M | $0 | 12mo |
| A/R Days Reduction | 52.00 DEFAULT | 38.00 BENCHMARK | $744K | $2.2M | $3.0M | $9.3M | 9mo |
| Clean Claim Rate | 88.0% DEFAULT | 96.0% BENCHMARK | $0 | $155K | $155K | $0 | 6mo |
| Net Collection Rate | 93.5% DEFAULT | 31.2% 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 | $1.2M | $2.4M | $3.6M | $4.9M | $4.9M | $4.9M | $4.9M |
| Denial Rate Reduction | $0 | $1.2M | $2.4M | $3.6M | $4.8M | $4.8M | $4.8M | $4.8M |
| A/R Days Reduction | $0 | $984K | $2.0M | $3.0M | $3.0M | $3.0M | $3.0M | $3.0M |
| Clean Claim Rate | $0 | $78K | $155K | $155K | $155K | $155K | $155K | $155K |
| Cumulative | $0 | $3.5M | $6.9M | $10.3M | $12.8M | $12.8M | $12.8M | $12.8M |
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 $12.8M is added at exit.
| Entry \ Exit | 9.0x | 10.0x | 11.0x | 11.5x | 12.0x |
|---|---|---|---|---|---|
| 8.0x | 72% / 14.9x | 76% / 16.9x | 80% / 18.9x | 82% / 19.9x | 84% / 20.9x |
| 9.0x | 67% / 12.9x | 71% / 14.7x | 75% / 16.5x | 77% / 17.4x | 79% / 18.2x |
| 10.0x | 62% / 11.3x | 67% / 12.9x | 71% / 14.5x | 73% / 15.3x | 74% / 16.1x |
| 11.0x | 58% / 9.9x | 63% / 11.4x | 67% / 12.9x | 69% / 13.6x | 70% / 14.3x |
| 12.0x | 55% / 8.8x | 59% / 10.2x | 63% / 11.5x | 65% / 12.2x | 67% / 12.9x |
Covenant Headroom (at 10x Entry, 6.5x Max Leverage)
Pro forma EBITDA can decline 44% before the 6.5x covenant trips. RCM uplift reduces leverage from 8.5x to 3.6x, adding 4.8 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 | $9.7M | — | $9.7M | 4.0% |
| Year 1 | $9.9M | +$8.5M | $18.4M | 7.6% |
| Year 2 | $10.2M | +$12.8M | $23.0M | 9.5% |
| Year 3 | $10.5M | +$12.8M | $23.3M | 9.6% |
| Year 4 | $10.9M | +$12.8M | $23.6M | 9.7% |
| Year 5 | $11.2M | +$12.8M | $23.9M | 9.9% |
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 | $2.4M | $3.6M | $4.9M | $5.8M |
| Denial Rate Reductio | $2.4M | $3.6M | $4.8M | $5.8M |
| A/R Days Reduction | $1.5M | $2.2M | $3.0M | $3.5M |
| Clean Claim Rate | $78K | $116K | $155K | $186K |
| Total | $6.4M | $9.6M | $12.8M | $15.3M |
Peer Context — Where This Hospital Sits
Key metrics vs 165 size-matched peers. Low percentile on margin/efficiency metrics = more room for improvement = larger bridge opportunity.
| Metric | Hospital | P25 | P50 | P75 | Percentile |
|---|---|---|---|---|---|
| Op Margin | 4.0% | -8.4% | 2.8% | 14.2% | P52 |
| Net-to-Gross | 30.4% | 14.1% | 21.3% | 31.2% | P72 |
| Occupancy | 57.1% | 48.4% | 63.6% | 73.9% | P40 |
| Rev/Bed | $1.5M | $357K | $1.0M | $1.5M | P79 |
| Exp/Bed | $1.5M | $393K | $952K | $1.3M | P81 |
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.