Bridge Realization Estimate
ML model predicts what fraction of the bridge is achievable (accuracy: 60%, n=5,839)
Expected realization: 63% of modeled bridge. Strengths: Revenue per Bed, Bed Count. Risks: Occupancy Rate, Net-to-Gross Ratio. Risk-adjusted uplift: $1.4M (vs $2.1M 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 | $812K | $812K | $0 | 12mo |
| Denial Rate Reduction | 12.0% DEFAULT | 6.5% BENCHMARK | $781K | $22K | $804K | $0 | 12mo |
| A/R Days Reduction | 52.00 DEFAULT | 38.00 BENCHMARK | $125K | $369K | $494K | $1.6M | 9mo |
| Clean Claim Rate | 88.0% DEFAULT | 96.0% BENCHMARK | $0 | $26K | $26K | $0 | 6mo |
| Net Collection Rate | 93.5% DEFAULT | 63.8% 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 | $203K | $406K | $609K | $812K | $812K | $812K | $812K |
| Denial Rate Reduction | $0 | $201K | $402K | $603K | $804K | $804K | $804K | $804K |
| A/R Days Reduction | $0 | $165K | $329K | $494K | $494K | $494K | $494K | $494K |
| Clean Claim Rate | $0 | $13K | $26K | $26K | $26K | $26K | $26K | $26K |
| Cumulative | $0 | $581K | $1.2M | $1.7M | $2.1M | $2.1M | $2.1M | $2.1M |
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 $2.1M is added at exit.
| Entry \ Exit | 9.0x | 10.0x | 11.0x | 11.5x | 12.0x |
|---|---|---|---|---|---|
| 8.0x | 43% / 5.9x | 47% / 6.9x | 51% / 8.0x | 53% / 8.5x | 55% / 9.0x |
| 9.0x | 37% / 4.9x | 42% / 5.8x | 46% / 6.7x | 48% / 7.2x | 50% / 7.6x |
| 10.0x | 33% / 4.1x | 37% / 4.9x | 42% / 5.7x | 44% / 6.1x | 46% / 6.5x |
| 11.0x | 28% / 3.4x | 33% / 4.2x | 37% / 4.9x | 39% / 5.3x | 41% / 5.7x |
| 12.0x | 23% / 2.9x | 29% / 3.5x | 33% / 4.2x | 35% / 4.6x | 37% / 4.9x |
Covenant Headroom (at 10x Entry, 6.5x Max Leverage)
Pro forma EBITDA can decline -19% before the 6.5x covenant trips. RCM uplift reduces leverage from 8.5x to 7.7x, adding 0.7 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 | $22.5M | — | $22.5M | 55.3% |
| Year 1 | $23.1M | +$1.4M | $24.6M | 60.5% |
| Year 2 | $23.8M | +$2.1M | $26.0M | 64.0% |
| Year 3 | $24.5M | +$2.1M | $26.7M | 65.7% |
| Year 4 | $25.3M | +$2.1M | $27.4M | 67.6% |
| Year 5 | $26.0M | +$2.1M | $28.2M | 69.4% |
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 | $406K | $609K | $812K | $974K |
| Denial Rate Reductio | $402K | $603K | $804K | $964K |
| A/R Days Reduction | $247K | $370K | $494K | $593K |
| Clean Claim Rate | $13K | $19K | $26K | $31K |
| Total | $1.1M | $1.6M | $2.1M | $2.6M |
Peer Context — Where This Hospital Sits
Key metrics vs 50 size-matched peers. Low percentile on margin/efficiency metrics = more room for improvement = larger bridge opportunity.
| Metric | Hospital | P25 | P50 | P75 | Percentile |
|---|---|---|---|---|---|
| Op Margin | 55.3% | -22.5% | -10.9% | -0.2% | P98 |
| Net-to-Gross | 64.2% | 31.6% | 45.9% | 63.8% | P74 |
| Occupancy | 16.1% | 19.5% | 36.0% | 64.2% | P18 |
| Rev/Bed | $3.1M | $1.1M | $2.3M | $3.9M | P68 |
| Exp/Bed | $1.4M | $1.3M | $2.7M | $4.0M | P26 |
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.