Bridge Realization Estimate
ML model predicts what fraction of the bridge is achievable (accuracy: 60%, n=5,839)
Expected realization: 64% of modeled bridge. Risks: Revenue per Bed, Occupancy Rate. Risk-adjusted uplift: $0.7M (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 | $397K | $397K | $0 | 12mo |
| Denial Rate Reduction | 12.0% DEFAULT | 6.5% BENCHMARK | $382K | $11K | $393K | $0 | 12mo |
| A/R Days Reduction | 52.00 DEFAULT | 38.00 BENCHMARK | $61K | $181K | $241K | $761K | 9mo |
| Clean Claim Rate | 88.0% DEFAULT | 96.0% BENCHMARK | $0 | $13K | $13K | $0 | 6mo |
| Net Collection Rate | 93.5% DEFAULT | 39.7% 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 | $99K | $198K | $298K | $397K | $397K | $397K | $397K |
| Denial Rate Reduction | $0 | $98K | $196K | $295K | $393K | $393K | $393K | $393K |
| A/R Days Reduction | $0 | $80K | $161K | $241K | $241K | $241K | $241K | $241K |
| Clean Claim Rate | $0 | $6K | $13K | $13K | $13K | $13K | $13K | $13K |
| Cumulative | $0 | $284K | $569K | $846K | $1.0M | $1.0M | $1.0M | $1.0M |
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 $1.0M is added at exit.
| Entry \ Exit | 9.0x | 10.0x | 11.0x | 11.5x | 12.0x |
|---|---|---|---|---|---|
| 8.0x | 77% / 17.2x | 81% / 19.5x | 85% / 21.8x | 87% / 22.9x | 89% / 24.1x |
| 9.0x | 72% / 15.0x | 76% / 17.0x | 80% / 19.0x | 82% / 20.0x | 84% / 21.1x |
| 10.0x | 67% / 13.2x | 72% / 15.0x | 76% / 16.8x | 78% / 17.7x | 79% / 18.6x |
| 11.0x | 63% / 11.7x | 68% / 13.3x | 72% / 15.0x | 74% / 15.8x | 75% / 16.6x |
| 12.0x | 60% / 10.4x | 64% / 11.9x | 68% / 13.4x | 70% / 14.2x | 72% / 15.0x |
Covenant Headroom (at 10x Entry, 6.5x Max Leverage)
Pro forma EBITDA can decline 51% before the 6.5x covenant trips. RCM uplift reduces leverage from 8.5x to 3.2x, adding 5.3 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 | $635K | — | $635K | 3.2% |
| Year 1 | $654K | +$696K | $1.3M | 6.8% |
| Year 2 | $674K | +$1.0M | $1.7M | 8.7% |
| Year 3 | $694K | +$1.0M | $1.7M | 8.8% |
| Year 4 | $715K | +$1.0M | $1.8M | 8.9% |
| Year 5 | $736K | +$1.0M | $1.8M | 9.0% |
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 | $198K | $298K | $397K | $476K |
| Denial Rate Reductio | $196K | $295K | $393K | $471K |
| A/R Days Reduction | $121K | $181K | $241K | $290K |
| Clean Claim Rate | $6K | $10K | $13K | $15K |
| Total | $522K | $783K | $1.0M | $1.3M |
Peer Context — Where This Hospital Sits
Key metrics vs 34 size-matched peers. Low percentile on margin/efficiency metrics = more room for improvement = larger bridge opportunity.
| Metric | Hospital | P25 | P50 | P75 | Percentile |
|---|---|---|---|---|---|
| Op Margin | 3.2% | -11.8% | 1.9% | 7.5% | P53 |
| Net-to-Gross | 39.8% | 23.4% | 29.2% | 39.7% | P74 |
| Occupancy | 45.6% | 38.7% | 57.7% | 73.9% | P35 |
| Rev/Bed | $156K | $343K | $646K | $1.3M | P0 |
| Exp/Bed | $151K | $307K | $668K | $1.2M | P0 |
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.