Bridge Realization Estimate
ML model predicts what fraction of the bridge is achievable (accuracy: 60%, n=5,839)
Expected realization: 60% of modeled bridge. Strengths: Revenue per Bed, Payer Diversity. Risks: Occupancy Rate, Net-to-Gross Ratio. Risk-adjusted uplift: $0.6M (vs $1.0M 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 |
|---|---|---|---|---|---|---|---|
| Net Collection Rate | 93.5% DEFAULT | 97.0% BENCHMARK | $273K | $0 | $273K | $0 | 18mo |
| Cost to Collect | 4.5% DEFAULT | 2.5% BENCHMARK | $0 | $260K | $260K | $0 | 12mo |
| Denial Rate Reduction | 12.0% DEFAULT | 6.5% BENCHMARK | $250K | $8K | $258K | $0 | 12mo |
| A/R Days Reduction | 52.00 DEFAULT | 38.00 BENCHMARK | $40K | $118K | $158K | $498K | 9mo |
| Clean Claim Rate | 88.0% DEFAULT | 96.0% BENCHMARK | $0 | $10K | $10K | $0 | 6mo |
| 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 |
|---|---|---|---|---|---|---|---|---|
| Net Collection Rate | $0 | $45K | $91K | $136K | $182K | $273K | $273K | $273K |
| Cost to Collect | $0 | $65K | $130K | $195K | $260K | $260K | $260K | $260K |
| Denial Rate Reduction | $0 | $65K | $129K | $194K | $258K | $258K | $258K | $258K |
| A/R Days Reduction | $0 | $53K | $105K | $158K | $158K | $158K | $158K | $158K |
| Clean Claim Rate | $0 | $5K | $10K | $10K | $10K | $10K | $10K | $10K |
| Cumulative | $0 | $233K | $465K | $693K | $868K | $959K | $959K | $959K |
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 $959K is added at exit.
| Entry \ Exit | 9.0x | 10.0x | 11.0x | 11.5x | 12.0x |
|---|---|---|---|---|---|
| 8.0x | 93% / 27.0x | 98% / 30.4x | 102% / 33.7x | 104% / 35.4x | 106% / 37.1x |
| 9.0x | 88% / 23.6x | 93% / 26.6x | 97% / 29.6x | 99% / 31.1x | 101% / 32.6x |
| 10.0x | 84% / 21.0x | 88% / 23.6x | 92% / 26.3x | 94% / 27.7x | 96% / 29.0x |
| 11.0x | 80% / 18.8x | 84% / 21.2x | 88% / 23.6x | 90% / 24.9x | 92% / 26.1x |
| 12.0x | 76% / 16.9x | 81% / 19.2x | 85% / 21.4x | 86% / 22.5x | 88% / 23.6x |
Covenant Headroom (at 10x Entry, 6.5x Max Leverage)
Pro forma EBITDA can decline 67% 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 | $322K | — | $322K | 2.5% |
| Year 1 | $331K | +$639K | $971K | 7.5% |
| Year 2 | $341K | +$959K | $1.3M | 10.0% |
| Year 3 | $352K | +$959K | $1.3M | 10.1% |
| Year 4 | $362K | +$959K | $1.3M | 10.2% |
| Year 5 | $373K | +$959K | $1.3M | 10.3% |
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% |
|---|---|---|---|---|
| Net Collection Rate | $136K | $205K | $273K | $327K |
| Cost to Collect | $130K | $195K | $260K | $312K |
| Denial Rate Reductio | $129K | $194K | $258K | $310K |
| A/R Days Reduction | $79K | $119K | $158K | $190K |
| Clean Claim Rate | $5K | $7K | $10K | $12K |
| Total | $479K | $719K | $959K | $1.2M |
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.