Bridge Realization Estimate
ML model predicts what fraction of the bridge is achievable (accuracy: 60%, n=5,839)
Expected realization: 68% of modeled bridge. Strengths: Bed Count, Revenue per Bed. Risks: Occupancy Rate. Risk-adjusted uplift: $1.8M (vs $2.6M 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 | $986K | $986K | $0 | 12mo |
| Denial Rate Reduction | 12.0% DEFAULT | 6.5% BENCHMARK | $949K | $27K | $976K | $0 | 12mo |
| A/R Days Reduction | 52.00 DEFAULT | 38.00 BENCHMARK | $151K | $449K | $600K | $1.9M | 9mo |
| Clean Claim Rate | 88.0% DEFAULT | 96.0% BENCHMARK | $0 | $32K | $32K | $0 | 6mo |
| Net Collection Rate | 93.5% DEFAULT | 48.8% 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 | $247K | $493K | $740K | $986K | $986K | $986K | $986K |
| Denial Rate Reduction | $0 | $244K | $488K | $732K | $976K | $976K | $976K | $976K |
| A/R Days Reduction | $0 | $200K | $400K | $600K | $600K | $600K | $600K | $600K |
| Clean Claim Rate | $0 | $16K | $32K | $32K | $32K | $32K | $32K | $32K |
| Cumulative | $0 | $706K | $1.4M | $2.1M | $2.6M | $2.6M | $2.6M | $2.6M |
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 $2.6M is added at exit.
| Entry \ Exit | 9.0x | 10.0x | 11.0x | 11.5x | 12.0x |
|---|---|---|---|---|---|
| 8.0x | 385% / 2680.7x | 395% / 2979.0x | 405% / 3277.2x | 409% / 3426.3x | 414% / 3575.4x |
| 9.0x | 374% / 2382.5x | 384% / 2647.6x | 393% / 2912.7x | 397% / 3045.2x | 402% / 3177.8x |
| 10.0x | 364% / 2143.9x | 374% / 2382.5x | 383% / 2621.1x | 387% / 2740.4x | 391% / 2859.7x |
| 11.0x | 355% / 1948.8x | 365% / 2165.6x | 374% / 2382.5x | 378% / 2491.0x | 382% / 2599.4x |
| 12.0x | 347% / 1786.1x | 357% / 1984.9x | 365% / 2183.7x | 370% / 2283.1x | 374% / 2382.5x |
Covenant Headroom (at 10x Entry, 6.5x Max Leverage)
Pro forma EBITDA can decline 100% before the 6.5x covenant trips. RCM uplift reduces leverage from 8.5x to 0.0x, adding 8.4 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 | $7K | — | $7K | 0.0% |
| Year 1 | $7K | +$1.7M | $1.7M | 3.5% |
| Year 2 | $8K | +$2.6M | $2.6M | 5.3% |
| Year 3 | $8K | +$2.6M | $2.6M | 5.3% |
| Year 4 | $8K | +$2.6M | $2.6M | 5.3% |
| Year 5 | $8K | +$2.6M | $2.6M | 5.3% |
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 | $493K | $740K | $986K | $1.2M |
| Denial Rate Reductio | $488K | $732K | $976K | $1.2M |
| A/R Days Reduction | $300K | $450K | $600K | $720K |
| Clean Claim Rate | $16K | $24K | $32K | $38K |
| Total | $1.3M | $1.9M | $2.6M | $3.1M |
Peer Context — Where This Hospital Sits
Key metrics vs 42 size-matched peers. Low percentile on margin/efficiency metrics = more room for improvement = larger bridge opportunity.
| Metric | Hospital | P25 | P50 | P75 | Percentile |
|---|---|---|---|---|---|
| Op Margin | 0.0% | -10.1% | -1.8% | 7.9% | P56 |
| Net-to-Gross | 50.7% | 19.3% | 36.6% | 48.8% | P75 |
| Occupancy | 47.7% | 17.6% | 38.3% | 67.9% | P55 |
| Rev/Bed | $2.0M | $442K | $1.0M | $2.0M | P76 |
| Exp/Bed | $2.0M | $505K | $1.2M | $2.5M | P67 |
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.