Bridge Realization Estimate
ML model predicts what fraction of the bridge is achievable (accuracy: 60%, n=5,839)
Expected realization: 90% of modeled bridge. Strengths: Revenue per Bed, Bed Count. Risks: Occupancy Rate. Risk-adjusted uplift: $29.1M (vs $32.4M 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 | $12.3M | $12.3M | $0 | 12mo |
| Denial Rate Reduction | 12.0% DEFAULT | 6.5% BENCHMARK | $11.9M | $339K | $12.2M | $0 | 12mo |
| A/R Days Reduction | 52.00 DEFAULT | 38.00 BENCHMARK | $1.9M | $5.6M | $7.5M | $23.6M | 9mo |
| Clean Claim Rate | 88.0% DEFAULT | 96.0% BENCHMARK | $0 | $395K | $395K | $0 | 6mo |
| Net Collection Rate | 93.5% DEFAULT | 52.9% 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 | $3.1M | $6.2M | $9.2M | $12.3M | $12.3M | $12.3M | $12.3M |
| Denial Rate Reduction | $0 | $3.1M | $6.1M | $9.2M | $12.2M | $12.2M | $12.2M | $12.2M |
| A/R Days Reduction | $0 | $2.5M | $5.0M | $7.5M | $7.5M | $7.5M | $7.5M | $7.5M |
| Clean Claim Rate | $0 | $197K | $395K | $395K | $395K | $395K | $395K | $395K |
| Cumulative | $0 | $8.8M | $17.7M | $26.3M | $32.4M | $32.4M | $32.4M | $32.4M |
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 $32.4M is added at exit.
| Entry \ Exit | 9.0x | 10.0x | 11.0x | 11.5x | 12.0x |
|---|---|---|---|---|---|
| 8.0x | 69% / 13.9x | 74% / 15.8x | 78% / 17.7x | 80% / 18.7x | 81% / 19.6x |
| 9.0x | 64% / 12.0x | 69% / 13.7x | 73% / 15.4x | 75% / 16.2x | 76% / 17.1x |
| 10.0x | 60% / 10.5x | 64% / 12.0x | 68% / 13.5x | 70% / 14.3x | 72% / 15.1x |
| 11.0x | 56% / 9.2x | 60% / 10.6x | 64% / 12.0x | 66% / 12.7x | 68% / 13.4x |
| 12.0x | 52% / 8.2x | 57% / 9.5x | 61% / 10.7x | 63% / 11.4x | 64% / 12.0x |
Covenant Headroom (at 10x Entry, 6.5x Max Leverage)
Pro forma EBITDA can decline 40% before the 6.5x covenant trips. RCM uplift reduces leverage from 8.5x to 3.9x, adding 4.6 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 | $27.3M | — | $27.3M | 4.4% |
| Year 1 | $28.1M | +$21.6M | $49.7M | 8.1% |
| Year 2 | $29.0M | +$32.4M | $61.4M | 10.0% |
| Year 3 | $29.8M | +$32.4M | $62.3M | 10.1% |
| Year 4 | $30.7M | +$32.4M | $63.2M | 10.2% |
| Year 5 | $31.7M | +$32.4M | $64.1M | 10.4% |
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 | $9.2M | $12.3M | $14.8M |
| Denial Rate Reductio | $6.1M | $9.2M | $12.2M | $14.6M |
| A/R Days Reduction | $3.8M | $5.6M | $7.5M | $9.0M |
| Clean Claim Rate | $197K | $296K | $395K | $473K |
| Total | $16.2M | $24.3M | $32.4M | $38.9M |
Peer Context — Where This Hospital Sits
Key metrics vs 88 size-matched peers. Low percentile on margin/efficiency metrics = more room for improvement = larger bridge opportunity.
| Metric | Hospital | P25 | P50 | P75 | Percentile |
|---|---|---|---|---|---|
| Op Margin | 4.4% | -9.9% | 1.6% | 8.6% | P57 |
| Net-to-Gross | 29.0% | 38.2% | 47.0% | 52.9% | P7 |
| Occupancy | 34.8% | 25.5% | 37.7% | 49.9% | P43 |
| Rev/Bed | $24.7M | $937K | $2.0M | $3.1M | P99 |
| Exp/Bed | $23.6M | $1.1M | $1.8M | $3.0M | P99 |
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.