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: $24.0M (vs $32.8M 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 | $12.5M | $12.5M | $0 | 12mo |
| Denial Rate Reduction | 12.0% DEFAULT | 6.5% BENCHMARK | $12.0M | $343K | $12.4M | $0 | 12mo |
| A/R Days Reduction | 52.00 DEFAULT | 38.00 BENCHMARK | $1.9M | $5.7M | $7.6M | $23.9M | 9mo |
| Clean Claim Rate | 88.0% DEFAULT | 96.0% BENCHMARK | $0 | $400K | $400K | $0 | 6mo |
| Net Collection Rate | 93.5% DEFAULT | 35.0% 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 | $3.1M | $6.2M | $9.4M | $12.5M | $12.5M | $12.5M | $12.5M |
| Denial Rate Reduction | $0 | $3.1M | $6.2M | $9.3M | $12.4M | $12.4M | $12.4M | $12.4M |
| A/R Days Reduction | $0 | $2.5M | $5.1M | $7.6M | $7.6M | $7.6M | $7.6M | $7.6M |
| Clean Claim Rate | $0 | $200K | $400K | $400K | $400K | $400K | $400K | $400K |
| Cumulative | $0 | $8.9M | $17.9M | $26.6M | $32.8M | $32.8M | $32.8M | $32.8M |
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 $32.8M is added at exit.
| Entry \ Exit | 9.0x | 10.0x | 11.0x | 11.5x | 12.0x |
|---|---|---|---|---|---|
| 8.0x | 94% / 27.2x | 98% / 30.6x | 102% / 34.0x | 104% / 35.7x | 106% / 37.4x |
| 9.0x | 89% / 23.8x | 93% / 26.8x | 97% / 29.8x | 99% / 31.4x | 101% / 32.9x |
| 10.0x | 84% / 21.1x | 89% / 23.8x | 93% / 26.5x | 95% / 27.9x | 96% / 29.2x |
| 11.0x | 80% / 18.9x | 84% / 21.4x | 89% / 23.8x | 90% / 25.1x | 92% / 26.3x |
| 12.0x | 76% / 17.1x | 81% / 19.3x | 85% / 21.6x | 87% / 22.7x | 89% / 23.8x |
Covenant Headroom (at 10x Entry, 6.5x Max Leverage)
Pro forma EBITDA can decline 68% before the 6.5x covenant trips. RCM uplift reduces leverage from 8.5x to 2.1x, adding 6.3 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 | $10.9M | — | $10.9M | 1.8% |
| Year 1 | $11.3M | +$21.9M | $33.2M | 5.3% |
| Year 2 | $11.6M | +$32.8M | $44.4M | 7.1% |
| Year 3 | $11.9M | +$32.8M | $44.8M | 7.2% |
| Year 4 | $12.3M | +$32.8M | $45.1M | 7.2% |
| Year 5 | $12.7M | +$32.8M | $45.5M | 7.3% |
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 | $6.2M | $9.4M | $12.5M | $15.0M |
| Denial Rate Reductio | $6.2M | $9.3M | $12.4M | $14.8M |
| A/R Days Reduction | $3.8M | $5.7M | $7.6M | $9.1M |
| Clean Claim Rate | $200K | $300K | $400K | $479K |
| Total | $16.4M | $24.6M | $32.8M | $39.4M |
Peer Context — Where This Hospital Sits
Key metrics vs 27 size-matched peers. Low percentile on margin/efficiency metrics = more room for improvement = larger bridge opportunity.
| Metric | Hospital | P25 | P50 | P75 | Percentile |
|---|---|---|---|---|---|
| Op Margin | 1.8% | 0.8% | 6.4% | 15.0% | P38 |
| Net-to-Gross | 31.4% | 26.0% | 30.5% | 35.0% | P58 |
| Occupancy | 86.1% | 67.9% | 73.9% | 81.3% | P78 |
| Rev/Bed | $1.9M | $1.5M | $1.8M | $2.2M | P54 |
| Exp/Bed | $1.8M | $1.4M | $1.6M | $2.0M | P63 |
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.