Bridge Realization Estimate
ML model predicts what fraction of the bridge is achievable (accuracy: 60%, n=5,839)
Expected realization: 72% of modeled bridge. Strengths: Occupancy Rate, Bed Count. Risks: Revenue per Bed, Commercial Payer %. Risk-adjusted uplift: $1.0M (vs $1.4M 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 | $550K | $550K | $0 | 12mo |
| Denial Rate Reduction | 12.0% DEFAULT | 6.5% BENCHMARK | $529K | $15K | $544K | $0 | 12mo |
| A/R Days Reduction | 52.00 DEFAULT | 38.00 BENCHMARK | $84K | $250K | $335K | $1.1M | 9mo |
| Clean Claim Rate | 88.0% DEFAULT | 96.0% BENCHMARK | $0 | $18K | $18K | $0 | 6mo |
| Net Collection Rate | 93.5% DEFAULT | 51.2% 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 | $137K | $275K | $412K | $550K | $550K | $550K | $550K |
| Denial Rate Reduction | $0 | $136K | $272K | $408K | $544K | $544K | $544K | $544K |
| A/R Days Reduction | $0 | $112K | $223K | $335K | $335K | $335K | $335K | $335K |
| Clean Claim Rate | $0 | $9K | $18K | $18K | $18K | $18K | $18K | $18K |
| Cumulative | $0 | $394K | $788K | $1.2M | $1.4M | $1.4M | $1.4M | $1.4M |
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 $1.4M is added at exit.
| Entry \ Exit | 9.0x | 10.0x | 11.0x | 11.5x | 12.0x |
|---|---|---|---|---|---|
| 8.0x | 73% / 15.4x | 77% / 17.5x | 81% / 19.6x | 83% / 20.6x | 85% / 21.7x |
| 9.0x | 68% / 13.4x | 72% / 15.2x | 76% / 17.1x | 78% / 18.0x | 80% / 18.9x |
| 10.0x | 64% / 11.7x | 68% / 13.4x | 72% / 15.0x | 74% / 15.9x | 76% / 16.7x |
| 11.0x | 60% / 10.3x | 64% / 11.9x | 68% / 13.4x | 70% / 14.1x | 72% / 14.9x |
| 12.0x | 56% / 9.2x | 60% / 10.6x | 64% / 12.0x | 66% / 12.7x | 68% / 13.4x |
Covenant Headroom (at 10x Entry, 6.5x Max Leverage)
Pro forma EBITDA can decline 46% before the 6.5x covenant trips. RCM uplift reduces leverage from 8.5x to 3.5x, adding 4.9 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 | $1.0M | — | $1.0M | 3.8% |
| Year 1 | $1.1M | +$964K | $2.0M | 7.4% |
| Year 2 | $1.1M | +$1.4M | $2.5M | 9.3% |
| Year 3 | $1.1M | +$1.4M | $2.6M | 9.4% |
| Year 4 | $1.2M | +$1.4M | $2.6M | 9.5% |
| Year 5 | $1.2M | +$1.4M | $2.6M | 9.6% |
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 | $275K | $412K | $550K | $660K |
| Denial Rate Reductio | $272K | $408K | $544K | $653K |
| A/R Days Reduction | $167K | $251K | $335K | $401K |
| Clean Claim Rate | $9K | $13K | $18K | $21K |
| Total | $723K | $1.1M | $1.4M | $1.7M |
Peer Context — Where This Hospital Sits
Key metrics vs 58 size-matched peers. Low percentile on margin/efficiency metrics = more room for improvement = larger bridge opportunity.
| Metric | Hospital | P25 | P50 | P75 | Percentile |
|---|---|---|---|---|---|
| Op Margin | 3.8% | -11.1% | -1.1% | 6.3% | P67 |
| Net-to-Gross | 13.7% | 20.0% | 35.9% | 51.2% | P10 |
| Occupancy | 74.2% | 32.5% | 52.0% | 67.9% | P83 |
| Rev/Bed | $573K | $284K | $579K | $1.3M | P47 |
| Exp/Bed | $551K | $334K | $736K | $1.7M | P47 |
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.