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: Net-to-Gross Ratio. Risks: Revenue per Bed, Occupancy Rate. Risk-adjusted uplift: $1.3M (vs $1.9M 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 | $727K | $727K | $0 | 12mo |
| Denial Rate Reduction | 12.0% DEFAULT | 6.5% BENCHMARK | $700K | $20K | $720K | $0 | 12mo |
| A/R Days Reduction | 52.00 DEFAULT | 38.00 BENCHMARK | $112K | $331K | $442K | $1.4M | 9mo |
| Clean Claim Rate | 88.0% DEFAULT | 96.0% BENCHMARK | $0 | $23K | $23K | $0 | 6mo |
| Net Collection Rate | 93.5% DEFAULT | 45.9% 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 | $182K | $364K | $545K | $727K | $727K | $727K | $727K |
| Denial Rate Reduction | $0 | $180K | $360K | $540K | $720K | $720K | $720K | $720K |
| A/R Days Reduction | $0 | $147K | $295K | $442K | $442K | $442K | $442K | $442K |
| Clean Claim Rate | $0 | $12K | $23K | $23K | $23K | $23K | $23K | $23K |
| Cumulative | $0 | $521K | $1.0M | $1.6M | $1.9M | $1.9M | $1.9M | $1.9M |
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 $1.9M is added at exit.
| Entry \ Exit | 9.0x | 10.0x | 11.0x | 11.5x | 12.0x |
|---|---|---|---|---|---|
| 8.0x | 79% / 18.2x | 83% / 20.6x | 87% / 22.9x | 89% / 24.1x | 91% / 25.3x |
| 9.0x | 74% / 15.8x | 78% / 17.9x | 82% / 20.0x | 84% / 21.1x | 86% / 22.1x |
| 10.0x | 69% / 13.9x | 74% / 15.8x | 78% / 17.7x | 80% / 18.6x | 81% / 19.6x |
| 11.0x | 65% / 12.3x | 70% / 14.1x | 74% / 15.8x | 76% / 16.7x | 77% / 17.5x |
| 12.0x | 62% / 11.0x | 66% / 12.6x | 70% / 14.2x | 72% / 15.0x | 74% / 15.8x |
Covenant Headroom (at 10x Entry, 6.5x Max Leverage)
Pro forma EBITDA can decline 53% before the 6.5x covenant trips. RCM uplift reduces leverage from 8.5x to 3.1x, adding 5.4 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 | $1.1M | — | $1.1M | 3.0% |
| Year 1 | $1.1M | +$1.3M | $2.4M | 6.6% |
| Year 2 | $1.1M | +$1.9M | $3.1M | 8.4% |
| Year 3 | $1.2M | +$1.9M | $3.1M | 8.5% |
| Year 4 | $1.2M | +$1.9M | $3.1M | 8.6% |
| Year 5 | $1.3M | +$1.9M | $3.2M | 8.7% |
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 | $364K | $545K | $727K | $873K |
| Denial Rate Reductio | $360K | $540K | $720K | $864K |
| A/R Days Reduction | $221K | $332K | $442K | $531K |
| Clean Claim Rate | $12K | $17K | $23K | $28K |
| Total | $956K | $1.4M | $1.9M | $2.3M |
Peer Context — Where This Hospital Sits
Key metrics vs 224 size-matched peers. Low percentile on margin/efficiency metrics = more room for improvement = larger bridge opportunity.
| Metric | Hospital | P25 | P50 | P75 | Percentile |
|---|---|---|---|---|---|
| Op Margin | 3.0% | -12.3% | 1.8% | 11.7% | P55 |
| Net-to-Gross | 13.7% | 17.5% | 29.6% | 45.9% | P13 |
| Occupancy | 48.4% | 39.8% | 57.3% | 75.0% | P35 |
| Rev/Bed | $454K | $291K | $554K | $1.1M | P40 |
| Exp/Bed | $441K | $309K | $489K | $1.1M | P41 |
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.