Bridge Realization Estimate
ML model predicts what fraction of the bridge is achievable (accuracy: 60%, n=5,839)
Expected realization: 74% of modeled bridge. Strengths: Occupancy Rate, Commercial Payer %. Risks: Revenue per Bed, Net-to-Gross Ratio. Risk-adjusted uplift: $0.5M (vs $0.7M 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 | $260K | $260K | $0 | 12mo |
| Denial Rate Reduction | 12.0% DEFAULT | 6.5% BENCHMARK | $250K | $8K | $259K | $0 | 12mo |
| A/R Days Reduction | 52.00 DEFAULT | 38.00 BENCHMARK | $40K | $118K | $158K | $499K | 9mo |
| Clean Claim Rate | 88.0% DEFAULT | 96.0% BENCHMARK | $0 | $10K | $10K | $0 | 6mo |
| Net Collection Rate | 93.5% DEFAULT | 63.5% 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 | $65K | $130K | $195K | $260K | $260K | $260K | $260K |
| Denial Rate Reduction | $0 | $65K | $129K | $194K | $259K | $259K | $259K | $259K |
| A/R Days Reduction | $0 | $53K | $106K | $158K | $158K | $158K | $158K | $158K |
| Clean Claim Rate | $0 | $5K | $10K | $10K | $10K | $10K | $10K | $10K |
| Cumulative | $0 | $187K | $375K | $557K | $687K | $687K | $687K | $687K |
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 $687K is added at exit.
| Entry \ Exit | 9.0x | 10.0x | 11.0x | 11.5x | 12.0x |
|---|---|---|---|---|---|
| 8.0x | 191% / 209.3x | 197% / 232.9x | 203% / 256.5x | 206% / 268.3x | 209% / 280.1x |
| 9.0x | 184% / 185.7x | 190% / 206.7x | 196% / 227.7x | 199% / 238.2x | 201% / 248.6x |
| 10.0x | 178% / 166.8x | 184% / 185.7x | 190% / 204.6x | 192% / 214.0x | 195% / 223.4x |
| 11.0x | 173% / 151.3x | 179% / 168.5x | 184% / 185.7x | 187% / 194.3x | 189% / 202.8x |
| 12.0x | 168% / 138.4x | 174% / 154.2x | 179% / 169.9x | 182% / 177.8x | 184% / 185.7x |
Covenant Headroom (at 10x Entry, 6.5x Max Leverage)
Pro forma EBITDA can decline 95% before the 6.5x covenant trips. RCM uplift reduces leverage from 8.5x to 0.3x, adding 8.2 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 | $25K | — | $25K | 0.2% |
| Year 1 | $25K | +$458K | $483K | 3.7% |
| Year 2 | $26K | +$687K | $713K | 5.5% |
| Year 3 | $27K | +$687K | $714K | 5.5% |
| Year 4 | $28K | +$687K | $714K | 5.5% |
| Year 5 | $29K | +$687K | $715K | 5.5% |
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 | $130K | $195K | $260K | $312K |
| Denial Rate Reductio | $129K | $194K | $259K | $310K |
| A/R Days Reduction | $79K | $119K | $158K | $190K |
| Clean Claim Rate | $5K | $7K | $10K | $12K |
| Total | $343K | $515K | $687K | $824K |
Peer Context — Where This Hospital Sits
Key metrics vs 51 size-matched peers. Low percentile on margin/efficiency metrics = more room for improvement = larger bridge opportunity.
| Metric | Hospital | P25 | P50 | P75 | Percentile |
|---|---|---|---|---|---|
| Op Margin | 0.2% | -10.9% | -5.5% | 2.9% | P67 |
| Net-to-Gross | 78.1% | 37.9% | 47.4% | 63.5% | P92 |
| Occupancy | 84.9% | 21.9% | 31.6% | 52.4% | P90 |
| Rev/Bed | $520K | $955K | $1.9M | $3.0M | P12 |
| Exp/Bed | $519K | $1.0M | $1.9M | $2.8M | P18 |
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.