Bridge Realization Estimate
ML model predicts what fraction of the bridge is achievable (accuracy: 60%, n=5,839)
Expected realization: 69% of modeled bridge. Strengths: Occupancy Rate, Bed Count. Risks: Revenue per Bed, Commercial Payer %. Risk-adjusted uplift: $0.2M (vs $0.3M 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 | $112K | $8K | $120K | $0 | 12mo |
| Cost to Collect | 4.5% DEFAULT | 2.5% BENCHMARK | $0 | $116K | $116K | $0 | 12mo |
| A/R Days Reduction | 52.00 DEFAULT | 38.00 BENCHMARK | $18K | $53K | $71K | $223K | 9mo |
| Clean Claim Rate | 88.0% DEFAULT | 96.0% BENCHMARK | $0 | $10K | $10K | $0 | 6mo |
| Net Collection Rate | 93.5% DEFAULT | 48.2% 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 |
|---|---|---|---|---|---|---|---|---|
| Denial Rate Reduction | $0 | $30K | $60K | $90K | $120K | $120K | $120K | $120K |
| Cost to Collect | $0 | $29K | $58K | $87K | $116K | $116K | $116K | $116K |
| A/R Days Reduction | $0 | $24K | $47K | $71K | $71K | $71K | $71K | $71K |
| Clean Claim Rate | $0 | $5K | $10K | $10K | $10K | $10K | $10K | $10K |
| Cumulative | $0 | $87K | $175K | $257K | $316K | $316K | $316K | $316K |
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 $316K is added at exit.
| Entry \ Exit | 9.0x | 10.0x | 11.0x | 11.5x | 12.0x |
|---|---|---|---|---|---|
| 8.0x | 82% / 19.8x | 86% / 22.4x | 90% / 24.9x | 92% / 26.2x | 94% / 27.5x |
| 9.0x | 77% / 17.2x | 81% / 19.5x | 85% / 21.8x | 87% / 22.9x | 89% / 24.1x |
| 10.0x | 72% / 15.2x | 77% / 17.2x | 81% / 19.3x | 83% / 20.3x | 84% / 21.3x |
| 11.0x | 68% / 13.5x | 73% / 15.4x | 77% / 17.2x | 79% / 18.2x | 80% / 19.1x |
| 12.0x | 65% / 12.1x | 69% / 13.8x | 73% / 15.5x | 75% / 16.4x | 77% / 17.2x |
Covenant Headroom (at 10x Entry, 6.5x Max Leverage)
Pro forma EBITDA can decline 56% before the 6.5x covenant trips. RCM uplift reduces leverage from 8.5x to 2.8x, adding 5.6 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 | $159K | — | $159K | 2.7% |
| Year 1 | $164K | +$211K | $374K | 6.5% |
| Year 2 | $168K | +$316K | $485K | 8.4% |
| Year 3 | $173K | +$316K | $490K | 8.4% |
| Year 4 | $179K | +$316K | $495K | 8.5% |
| Year 5 | $184K | +$316K | $500K | 8.6% |
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% |
|---|---|---|---|---|
| Denial Rate Reductio | $60K | $90K | $120K | $144K |
| Cost to Collect | $58K | $87K | $116K | $139K |
| A/R Days Reduction | $35K | $53K | $71K | $85K |
| Clean Claim Rate | $5K | $7K | $10K | $12K |
| Total | $158K | $237K | $316K | $380K |
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 | 2.7% | -23.7% | -13.9% | -0.5% | P79 |
| Net-to-Gross | 33.5% | 29.2% | 37.1% | 48.2% | P40 |
| Occupancy | 64.0% | 20.3% | 34.1% | 55.3% | P83 |
| Rev/Bed | $242K | $374K | $630K | $943K | P8 |
| Exp/Bed | $235K | $406K | $760K | $1.0M | P6 |
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.