Bridge Realization Estimate
ML model predicts what fraction of the bridge is achievable (accuracy: 60%, n=5,839)
Expected realization: 61% of modeled bridge. Risks: Occupancy Rate, Revenue per Bed. 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 | $422K | $422K | $0 | 12mo |
| Denial Rate Reduction | 12.0% DEFAULT | 6.5% BENCHMARK | $407K | $12K | $418K | $0 | 12mo |
| A/R Days Reduction | 52.00 DEFAULT | 38.00 BENCHMARK | $65K | $192K | $257K | $810K | 9mo |
| Clean Claim Rate | 88.0% DEFAULT | 96.0% BENCHMARK | $0 | $14K | $14K | $0 | 6mo |
| Net Collection Rate | 93.5% DEFAULT | 37.1% 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 | $106K | $211K | $317K | $422K | $422K | $422K | $422K |
| Denial Rate Reduction | $0 | $105K | $209K | $314K | $418K | $418K | $418K | $418K |
| A/R Days Reduction | $0 | $86K | $171K | $257K | $257K | $257K | $257K | $257K |
| Clean Claim Rate | $0 | $7K | $14K | $14K | $14K | $14K | $14K | $14K |
| Cumulative | $0 | $303K | $605K | $901K | $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 | 100% / 32.2x | 105% / 36.2x | 109% / 40.1x | 111% / 42.1x | 113% / 44.1x |
| 9.0x | 95% / 28.3x | 100% / 31.8x | 104% / 35.3x | 106% / 37.1x | 108% / 38.8x |
| 10.0x | 91% / 25.1x | 95% / 28.3x | 99% / 31.5x | 101% / 33.0x | 103% / 34.6x |
| 11.0x | 87% / 22.6x | 91% / 25.4x | 95% / 28.3x | 97% / 29.7x | 99% / 31.2x |
| 12.0x | 83% / 20.4x | 87% / 23.1x | 91% / 25.7x | 93% / 27.0x | 95% / 28.3x |
Covenant Headroom (at 10x Entry, 6.5x Max Leverage)
Pro forma EBITDA can decline 72% before the 6.5x covenant trips. RCM uplift reduces leverage from 8.5x to 1.8x, adding 6.7 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 | $301K | — | $301K | 1.4% |
| Year 1 | $310K | +$741K | $1.1M | 5.0% |
| Year 2 | $319K | +$1.1M | $1.4M | 6.8% |
| Year 3 | $329K | +$1.1M | $1.4M | 6.8% |
| Year 4 | $338K | +$1.1M | $1.4M | 6.9% |
| Year 5 | $349K | +$1.1M | $1.5M | 6.9% |
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 | $211K | $317K | $422K | $507K |
| Denial Rate Reductio | $209K | $314K | $418K | $502K |
| A/R Days Reduction | $129K | $193K | $257K | $308K |
| Clean Claim Rate | $7K | $10K | $14K | $16K |
| Total | $556K | $833K | $1.1M | $1.3M |
Peer Context — Where This Hospital Sits
Key metrics vs 145 size-matched peers. Low percentile on margin/efficiency metrics = more room for improvement = larger bridge opportunity.
| Metric | Hospital | P25 | P50 | P75 | Percentile |
|---|---|---|---|---|---|
| Op Margin | 1.4% | -21.6% | -4.7% | 3.7% | P68 |
| Net-to-Gross | 22.5% | 19.4% | 25.4% | 37.1% | P42 |
| Occupancy | 27.4% | 43.2% | 56.7% | 71.5% | P6 |
| Rev/Bed | $282K | $511K | $888K | $2.1M | P7 |
| Exp/Bed | $278K | $575K | $977K | $2.2M | 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.