Bridge Realization Estimate
ML model predicts what fraction of the bridge is achievable (accuracy: 60%, n=5,839)
Expected realization: 62% of modeled bridge. Strengths: Bed Count, Commercial Payer %. Risks: Occupancy Rate, Revenue per Bed. Risk-adjusted uplift: $0.6M (vs $1.0M 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 | $372K | $372K | $0 | 12mo |
| Denial Rate Reduction | 12.0% DEFAULT | 6.5% BENCHMARK | $358K | $10K | $368K | $0 | 12mo |
| A/R Days Reduction | 52.00 DEFAULT | 38.00 BENCHMARK | $57K | $169K | $226K | $713K | 9mo |
| Clean Claim Rate | 88.0% DEFAULT | 96.0% BENCHMARK | $0 | $12K | $12K | $0 | 6mo |
| Net Collection Rate | 93.5% DEFAULT | 48.9% 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 | $93K | $186K | $279K | $372K | $372K | $372K | $372K |
| Denial Rate Reduction | $0 | $92K | $184K | $276K | $368K | $368K | $368K | $368K |
| A/R Days Reduction | $0 | $75K | $151K | $226K | $226K | $226K | $226K | $226K |
| Clean Claim Rate | $0 | $6K | $12K | $12K | $12K | $12K | $12K | $12K |
| Cumulative | $0 | $266K | $533K | $793K | $978K | $978K | $978K | $978K |
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 $978K is added at exit.
| Entry \ Exit | 9.0x | 10.0x | 11.0x | 11.5x | 12.0x |
|---|---|---|---|---|---|
| 8.0x | 96% / 28.9x | 101% / 32.5x | 105% / 36.0x | 107% / 37.8x | 109% / 39.6x |
| 9.0x | 91% / 25.3x | 95% / 28.5x | 100% / 31.7x | 102% / 33.2x | 103% / 34.8x |
| 10.0x | 86% / 22.4x | 91% / 25.3x | 95% / 28.2x | 97% / 29.6x | 99% / 31.0x |
| 11.0x | 82% / 20.1x | 87% / 22.7x | 91% / 25.3x | 93% / 26.6x | 95% / 27.9x |
| 12.0x | 79% / 18.2x | 83% / 20.6x | 87% / 22.9x | 89% / 24.1x | 91% / 25.3x |
Covenant Headroom (at 10x Entry, 6.5x Max Leverage)
Pro forma EBITDA can decline 69% before the 6.5x covenant trips. RCM uplift reduces leverage from 8.5x to 2.0x, adding 6.5 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 | $302K | — | $302K | 1.6% |
| Year 1 | $311K | +$652K | $963K | 5.2% |
| Year 2 | $321K | +$978K | $1.3M | 7.0% |
| Year 3 | $330K | +$978K | $1.3M | 7.0% |
| Year 4 | $340K | +$978K | $1.3M | 7.1% |
| Year 5 | $350K | +$978K | $1.3M | 7.1% |
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 | $186K | $279K | $372K | $446K |
| Denial Rate Reductio | $184K | $276K | $368K | $442K |
| A/R Days Reduction | $113K | $170K | $226K | $271K |
| Clean Claim Rate | $6K | $9K | $12K | $14K |
| Total | $489K | $733K | $978K | $1.2M |
Peer Context — Where This Hospital Sits
Key metrics vs 53 size-matched peers. Low percentile on margin/efficiency metrics = more room for improvement = larger bridge opportunity.
| Metric | Hospital | P25 | P50 | P75 | Percentile |
|---|---|---|---|---|---|
| Op Margin | 1.6% | -24.4% | -14.4% | -1.1% | P77 |
| Net-to-Gross | 30.1% | 28.9% | 36.2% | 48.8% | P32 |
| Occupancy | 19.6% | 20.3% | 34.1% | 56.0% | P23 |
| Rev/Bed | $743K | $367K | $596K | $794K | P72 |
| Exp/Bed | $731K | $404K | $703K | $987K | P51 |
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.