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. Risks: Revenue per Bed, Commercial Payer %. Risk-adjusted uplift: $0.7M (vs $1.1M 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 | $408K | $408K | $0 | 12mo |
| Denial Rate Reduction | 12.0% DEFAULT | 6.5% BENCHMARK | $393K | $11K | $404K | $0 | 12mo |
| A/R Days Reduction | 52.00 DEFAULT | 38.00 BENCHMARK | $63K | $186K | $248K | $783K | 9mo |
| Clean Claim Rate | 88.0% DEFAULT | 96.0% BENCHMARK | $0 | $13K | $13K | $0 | 6mo |
| Net Collection Rate | 93.5% DEFAULT | 42.6% 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 | $102K | $204K | $306K | $408K | $408K | $408K | $408K |
| Denial Rate Reduction | $0 | $101K | $202K | $303K | $404K | $404K | $404K | $404K |
| A/R Days Reduction | $0 | $83K | $166K | $248K | $248K | $248K | $248K | $248K |
| Clean Claim Rate | $0 | $7K | $13K | $13K | $13K | $13K | $13K | $13K |
| Cumulative | $0 | $293K | $585K | $871K | $1.1M | $1.1M | $1.1M | $1.1M |
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 $1.1M is added at exit.
| Entry \ Exit | 9.0x | 10.0x | 11.0x | 11.5x | 12.0x |
|---|---|---|---|---|---|
| 8.0x | 46% / 6.6x | 50% / 7.7x | 54% / 8.8x | 56% / 9.3x | 58% / 9.8x |
| 9.0x | 41% / 5.5x | 45% / 6.5x | 49% / 7.4x | 51% / 7.9x | 53% / 8.4x |
| 10.0x | 36% / 4.6x | 41% / 5.5x | 45% / 6.4x | 47% / 6.8x | 49% / 7.2x |
| 11.0x | 31% / 3.9x | 36% / 4.7x | 41% / 5.5x | 43% / 5.9x | 44% / 6.3x |
| 12.0x | 27% / 3.3x | 32% / 4.0x | 37% / 4.8x | 39% / 5.1x | 41% / 5.5x |
Covenant Headroom (at 10x Entry, 6.5x Max Leverage)
Pro forma EBITDA can decline -10% before the 6.5x covenant trips. RCM uplift reduces leverage from 8.5x to 7.1x, adding 1.3 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 | $5.8M | — | $5.8M | 28.5% |
| Year 1 | $6.0M | +$716K | $6.7M | 32.9% |
| Year 2 | $6.2M | +$1.1M | $7.3M | 35.5% |
| Year 3 | $6.4M | +$1.1M | $7.4M | 36.4% |
| Year 4 | $6.6M | +$1.1M | $7.6M | 37.4% |
| Year 5 | $6.8M | +$1.1M | $7.8M | 38.3% |
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 | $204K | $306K | $408K | $490K |
| Denial Rate Reductio | $202K | $303K | $404K | $485K |
| A/R Days Reduction | $124K | $186K | $248K | $298K |
| Clean Claim Rate | $7K | $10K | $13K | $16K |
| Total | $537K | $806K | $1.1M | $1.3M |
Peer Context — Where This Hospital Sits
Key metrics vs 36 size-matched peers. Low percentile on margin/efficiency metrics = more room for improvement = larger bridge opportunity.
| Metric | Hospital | P25 | P50 | P75 | Percentile |
|---|---|---|---|---|---|
| Op Margin | 28.5% | -15.7% | 0.0% | 9.2% | P97 |
| Net-to-Gross | 42.5% | 23.3% | 30.0% | 42.6% | P72 |
| Occupancy | 69.7% | 23.9% | 44.9% | 70.1% | P72 |
| Rev/Bed | $258K | $305K | $447K | $708K | P17 |
| Exp/Bed | $185K | $293K | $415K | $781K | 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.