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: Bed Count, Net-to-Gross Ratio. Risks: Occupancy Rate, Revenue per Bed. Risk-adjusted uplift: $0.3M (vs $0.5M 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 |
|---|---|---|---|---|---|---|---|
| Denial Rate Reduction | 12.0% DEFAULT | 6.5% BENCHMARK | $172K | $8K | $180K | $0 | 12mo |
| Cost to Collect | 4.5% DEFAULT | 2.5% BENCHMARK | $0 | $179K | $179K | $0 | 12mo |
| A/R Days Reduction | 52.00 DEFAULT | 38.00 BENCHMARK | $27K | $81K | $109K | $343K | 9mo |
| Clean Claim Rate | 88.0% DEFAULT | 96.0% BENCHMARK | $0 | $10K | $10K | $0 | 6mo |
| Net Collection Rate | 93.5% DEFAULT | 72.0% 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 |
|---|---|---|---|---|---|---|---|---|
| Denial Rate Reduction | $0 | $45K | $90K | $135K | $180K | $180K | $180K | $180K |
| Cost to Collect | $0 | $45K | $89K | $134K | $179K | $179K | $179K | $179K |
| A/R Days Reduction | $0 | $36K | $72K | $109K | $109K | $109K | $109K | $109K |
| Clean Claim Rate | $0 | $5K | $10K | $10K | $10K | $10K | $10K | $10K |
| Cumulative | $0 | $131K | $262K | $388K | $477K | $477K | $477K | $477K |
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 $477K is added at exit.
| Entry \ Exit | 9.0x | 10.0x | 11.0x | 11.5x | 12.0x |
|---|---|---|---|---|---|
| 8.0x | 62% / 11.2x | 67% / 12.9x | 71% / 14.5x | 73% / 15.3x | 74% / 16.1x |
| 9.0x | 57% / 9.6x | 62% / 11.1x | 66% / 12.5x | 68% / 13.2x | 69% / 13.9x |
| 10.0x | 53% / 8.3x | 57% / 9.6x | 61% / 10.9x | 63% / 11.6x | 65% / 12.2x |
| 11.0x | 49% / 7.3x | 53% / 8.5x | 57% / 9.6x | 59% / 10.2x | 61% / 10.8x |
| 12.0x | 45% / 6.4x | 50% / 7.5x | 54% / 8.6x | 56% / 9.1x | 57% / 9.6x |
Covenant Headroom (at 10x Entry, 6.5x Max Leverage)
Pro forma EBITDA can decline 29% before the 6.5x covenant trips. RCM uplift reduces leverage from 8.5x to 4.6x, adding 3.8 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 | $579K | — | $579K | 6.5% |
| Year 1 | $597K | +$318K | $915K | 10.2% |
| Year 2 | $615K | +$477K | $1.1M | 12.2% |
| Year 3 | $633K | +$477K | $1.1M | 12.4% |
| Year 4 | $652K | +$477K | $1.1M | 12.6% |
| Year 5 | $672K | +$477K | $1.1M | 12.9% |
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% |
|---|---|---|---|---|
| Denial Rate Reductio | $90K | $135K | $180K | $216K |
| Cost to Collect | $89K | $134K | $179K | $214K |
| A/R Days Reduction | $54K | $82K | $109K | $130K |
| Clean Claim Rate | $5K | $7K | $10K | $12K |
| Total | $239K | $358K | $477K | $573K |
Peer Context — Where This Hospital Sits
Key metrics vs 483 size-matched peers. Low percentile on margin/efficiency metrics = more room for improvement = larger bridge opportunity.
| Metric | Hospital | P25 | P50 | P75 | Percentile |
|---|---|---|---|---|---|
| Op Margin | 6.5% | -25.1% | -8.4% | 2.5% | P82 |
| Net-to-Gross | 7.1% | 41.8% | 58.2% | 72.1% | P0 |
| Occupancy | 9.3% | 15.7% | 25.7% | 44.1% | P10 |
| Rev/Bed | $993K | $728K | $1.2M | $2.1M | P38 |
| Exp/Bed | $928K | $863K | $1.4M | $2.3M | P28 |
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.