Bridge Realization Estimate
ML model predicts what fraction of the bridge is achievable (accuracy: 60%, n=5,839)
Expected realization: 61% of modeled bridge. Strengths: Commercial Payer %, Bed Count. Risks: Occupancy Rate, Net-to-Gross Ratio. Risk-adjusted uplift: $0.1M (vs $0.2M 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 | $66K | $8K | $74K | $0 | 12mo |
| Cost to Collect | 4.5% DEFAULT | 2.5% BENCHMARK | $0 | $68K | $68K | $0 | 12mo |
| A/R Days Reduction | 52.00 DEFAULT | 38.00 BENCHMARK | $10K | $31K | $41K | $131K | 9mo |
| Clean Claim Rate | 88.0% DEFAULT | 96.0% BENCHMARK | $0 | $10K | $10K | $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 |
|---|---|---|---|---|---|---|---|---|
| Denial Rate Reduction | $0 | $18K | $37K | $55K | $74K | $74K | $74K | $74K |
| Cost to Collect | $0 | $17K | $34K | $51K | $68K | $68K | $68K | $68K |
| A/R Days Reduction | $0 | $14K | $28K | $41K | $41K | $41K | $41K | $41K |
| Clean Claim Rate | $0 | $5K | $10K | $10K | $10K | $10K | $10K | $10K |
| Cumulative | $0 | $54K | $108K | $157K | $193K | $193K | $193K | $193K |
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 $193K is added at exit.
| Entry \ Exit | 9.0x | 10.0x | 11.0x | 11.5x | 12.0x |
|---|---|---|---|---|---|
| 8.0x | 60% / 10.4x | 64% / 11.9x | 68% / 13.4x | 70% / 14.2x | 72% / 15.0x |
| 9.0x | 55% / 8.9x | 59% / 10.2x | 63% / 11.6x | 65% / 12.3x | 67% / 12.9x |
| 10.0x | 50% / 7.7x | 55% / 8.9x | 59% / 10.1x | 61% / 10.7x | 62% / 11.3x |
| 11.0x | 46% / 6.7x | 51% / 7.8x | 55% / 8.9x | 57% / 9.4x | 58% / 10.0x |
| 12.0x | 42% / 5.9x | 47% / 6.9x | 51% / 7.9x | 53% / 8.4x | 55% / 8.9x |
Covenant Headroom (at 10x Entry, 6.5x Max Leverage)
Pro forma EBITDA can decline 24% before the 6.5x covenant trips. RCM uplift reduces leverage from 8.5x to 5.0x, adding 3.5 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 | $272K | — | $272K | 8.0% |
| Year 1 | $281K | +$129K | $409K | 12.0% |
| Year 2 | $289K | +$193K | $482K | 14.2% |
| Year 3 | $298K | +$193K | $491K | 14.4% |
| Year 4 | $307K | +$193K | $500K | 14.7% |
| Year 5 | $316K | +$193K | $509K | 14.9% |
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% |
|---|---|---|---|---|
| Denial Rate Reductio | $37K | $55K | $74K | $89K |
| Cost to Collect | $34K | $51K | $68K | $82K |
| A/R Days Reduction | $21K | $31K | $41K | $50K |
| Clean Claim Rate | $5K | $7K | $10K | $12K |
| Total | $96K | $145K | $193K | $232K |
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 | -50.0% | -22.5% | -10.9% | -0.2% | P0 |
| Net-to-Gross | 95.6% | 31.6% | 45.9% | 63.8% | P92 |
| Occupancy | 20.4% | 19.5% | 36.0% | 64.2% | P28 |
| Rev/Bed | $262K | $1.1M | $2.3M | $3.9M | P4 |
| Exp/Bed | $724K | $1.3M | $2.7M | $4.0M | P12 |
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.