Bridge Realization Estimate
ML model predicts what fraction of the bridge is achievable (accuracy: 60%, n=5,839)
Expected realization: 71% of modeled bridge. Strengths: Occupancy Rate, Bed Count. Risk-adjusted uplift: $1.5M (vs $2.1M 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 | $816K | $816K | $0 | 12mo |
| Denial Rate Reduction | 12.0% DEFAULT | 6.5% BENCHMARK | $786K | $22K | $808K | $0 | 12mo |
| A/R Days Reduction | 52.00 DEFAULT | 38.00 BENCHMARK | $125K | $371K | $497K | $1.6M | 9mo |
| Clean Claim Rate | 88.0% DEFAULT | 96.0% BENCHMARK | $0 | $26K | $26K | $0 | 6mo |
| Net Collection Rate | 93.5% DEFAULT | 45.1% 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 | $204K | $408K | $612K | $816K | $816K | $816K | $816K |
| Denial Rate Reduction | $0 | $202K | $404K | $606K | $808K | $808K | $808K | $808K |
| A/R Days Reduction | $0 | $166K | $331K | $497K | $497K | $497K | $497K | $497K |
| Clean Claim Rate | $0 | $13K | $26K | $26K | $26K | $26K | $26K | $26K |
| Cumulative | $0 | $585K | $1.2M | $1.7M | $2.1M | $2.1M | $2.1M | $2.1M |
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 $2.1M is added at exit.
| Entry \ Exit | 9.0x | 10.0x | 11.0x | 11.5x | 12.0x |
|---|---|---|---|---|---|
| 8.0x | 57% / 9.7x | 62% / 11.1x | 66% / 12.5x | 68% / 13.2x | 69% / 13.9x |
| 9.0x | 52% / 8.2x | 57% / 9.5x | 61% / 10.8x | 63% / 11.4x | 64% / 12.0x |
| 10.0x | 48% / 7.1x | 52% / 8.2x | 56% / 9.4x | 58% / 9.9x | 60% / 10.5x |
| 11.0x | 44% / 6.1x | 48% / 7.2x | 52% / 8.2x | 54% / 8.7x | 56% / 9.3x |
| 12.0x | 40% / 5.3x | 45% / 6.3x | 49% / 7.3x | 51% / 7.7x | 52% / 8.2x |
Covenant Headroom (at 10x Entry, 6.5x Max Leverage)
Pro forma EBITDA can decline 19% before the 6.5x covenant trips. RCM uplift reduces leverage from 8.5x to 5.3x, adding 3.2 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 | $3.6M | — | $3.6M | 8.7% |
| Year 1 | $3.7M | +$1.4M | $5.1M | 12.5% |
| Year 2 | $3.8M | +$2.1M | $5.9M | 14.5% |
| Year 3 | $3.9M | +$2.1M | $6.0M | 14.8% |
| Year 4 | $4.0M | +$2.1M | $6.1M | 15.1% |
| Year 5 | $4.1M | +$2.1M | $6.3M | 15.4% |
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 | $408K | $612K | $816K | $980K |
| Denial Rate Reductio | $404K | $606K | $808K | $970K |
| A/R Days Reduction | $248K | $373K | $497K | $596K |
| Clean Claim Rate | $13K | $20K | $26K | $31K |
| Total | $1.1M | $1.6M | $2.1M | $2.6M |
Peer Context — Where This Hospital Sits
Key metrics vs 61 size-matched peers. Low percentile on margin/efficiency metrics = more room for improvement = larger bridge opportunity.
| Metric | Hospital | P25 | P50 | P75 | Percentile |
|---|---|---|---|---|---|
| Op Margin | 8.7% | -28.7% | -16.2% | -1.5% | P82 |
| Net-to-Gross | 14.3% | 26.5% | 32.3% | 45.0% | P3 |
| Occupancy | 64.8% | 21.3% | 28.1% | 46.4% | P85 |
| Rev/Bed | $1.0M | $307K | $467K | $715K | P88 |
| Exp/Bed | $932K | $378K | $530K | $833K | P77 |
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.