Bridge Realization Estimate
ML model predicts what fraction of the bridge is achievable (accuracy: 60%, n=5,839)
Expected realization: 74% of modeled bridge. Strengths: Occupancy Rate, Payer Diversity. Risks: Revenue per Bed, Commercial Payer %. Risk-adjusted uplift: $1.6M (vs $2.2M 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 | $852K | $852K | $0 | 12mo |
| Denial Rate Reduction | 12.0% DEFAULT | 6.5% BENCHMARK | $820K | $23K | $844K | $0 | 12mo |
| A/R Days Reduction | 52.00 DEFAULT | 38.00 BENCHMARK | $131K | $388K | $519K | $1.6M | 9mo |
| Clean Claim Rate | 88.0% DEFAULT | 96.0% BENCHMARK | $0 | $27K | $27K | $0 | 6mo |
| Net Collection Rate | 93.5% DEFAULT | 36.7% 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 | $213K | $426K | $639K | $852K | $852K | $852K | $852K |
| Denial Rate Reduction | $0 | $211K | $422K | $633K | $844K | $844K | $844K | $844K |
| A/R Days Reduction | $0 | $173K | $346K | $519K | $519K | $519K | $519K | $519K |
| Clean Claim Rate | $0 | $14K | $27K | $27K | $27K | $27K | $27K | $27K |
| Cumulative | $0 | $610K | $1.2M | $1.8M | $2.2M | $2.2M | $2.2M | $2.2M |
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 $2.2M is added at exit.
| Entry \ Exit | 9.0x | 10.0x | 11.0x | 11.5x | 12.0x |
|---|---|---|---|---|---|
| 8.0x | 47% / 6.9x | 52% / 8.0x | 56% / 9.1x | 57% / 9.7x | 59% / 10.2x |
| 9.0x | 42% / 5.7x | 46% / 6.7x | 51% / 7.7x | 52% / 8.2x | 54% / 8.7x |
| 10.0x | 37% / 4.8x | 42% / 5.7x | 46% / 6.6x | 48% / 7.1x | 50% / 7.5x |
| 11.0x | 33% / 4.1x | 38% / 4.9x | 42% / 5.7x | 44% / 6.2x | 46% / 6.6x |
| 12.0x | 28% / 3.5x | 34% / 4.2x | 38% / 5.0x | 40% / 5.4x | 42% / 5.7x |
Covenant Headroom (at 10x Entry, 6.5x Max Leverage)
Pro forma EBITDA can decline -6% before the 6.5x covenant trips. RCM uplift reduces leverage from 8.5x to 6.9x, adding 1.5 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 | $10.0M | — | $10.0M | 23.5% |
| Year 1 | $10.3M | +$1.5M | $11.8M | 27.7% |
| Year 2 | $10.6M | +$2.2M | $12.9M | 30.2% |
| Year 3 | $10.9M | +$2.2M | $13.2M | 31.0% |
| Year 4 | $11.3M | +$2.2M | $13.5M | 31.7% |
| Year 5 | $11.6M | +$2.2M | $13.9M | 32.5% |
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 | $426K | $639K | $852K | $1.0M |
| Denial Rate Reductio | $422K | $633K | $844K | $1.0M |
| A/R Days Reduction | $259K | $389K | $519K | $622K |
| Clean Claim Rate | $14K | $20K | $27K | $33K |
| Total | $1.1M | $1.7M | $2.2M | $2.7M |
Peer Context — Where This Hospital Sits
Key metrics vs 44 size-matched peers. Low percentile on margin/efficiency metrics = more room for improvement = larger bridge opportunity.
| Metric | Hospital | P25 | P50 | P75 | Percentile |
|---|---|---|---|---|---|
| Op Margin | 23.5% | -7.5% | -0.3% | 11.4% | P90 |
| Net-to-Gross | 41.8% | 17.0% | 25.9% | 36.7% | P81 |
| Occupancy | 93.1% | 55.4% | 65.8% | 78.1% | P91 |
| Rev/Bed | $270K | $316K | $1.2M | $1.8M | P12 |
| Exp/Bed | $206K | $328K | $1.1M | $1.8M | P9 |
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.