Bridge Realization Estimate
ML model predicts what fraction of the bridge is achievable (accuracy: 60%, n=5,839)
Expected realization: 67% of modeled bridge. Strengths: Revenue per Bed, Bed Count. Risks: Occupancy Rate. Risk-adjusted uplift: $2.2M (vs $3.3M 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 | $1.3M | $1.3M | $0 | 12mo |
| Denial Rate Reduction | 12.0% DEFAULT | 6.5% BENCHMARK | $1.2M | $35K | $1.3M | $0 | 12mo |
| A/R Days Reduction | 52.00 DEFAULT | 38.00 BENCHMARK | $194K | $576K | $770K | $2.4M | 9mo |
| Clean Claim Rate | 88.0% DEFAULT | 96.0% BENCHMARK | $0 | $40K | $40K | $0 | 6mo |
| Net Collection Rate | 93.5% DEFAULT | 65.2% 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 | $316K | $633K | $949K | $1.3M | $1.3M | $1.3M | $1.3M |
| Denial Rate Reduction | $0 | $313K | $626K | $939K | $1.3M | $1.3M | $1.3M | $1.3M |
| A/R Days Reduction | $0 | $257K | $513K | $770K | $770K | $770K | $770K | $770K |
| Clean Claim Rate | $0 | $20K | $40K | $40K | $40K | $40K | $40K | $40K |
| Cumulative | $0 | $906K | $1.8M | $2.7M | $3.3M | $3.3M | $3.3M | $3.3M |
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 $3.3M is added at exit.
| Entry \ Exit | 9.0x | 10.0x | 11.0x | 11.5x | 12.0x |
|---|---|---|---|---|---|
| 8.0x | 80% / 18.9x | 84% / 21.3x | 88% / 23.8x | 90% / 25.0x | 92% / 26.2x |
| 9.0x | 75% / 16.4x | 79% / 18.6x | 83% / 20.8x | 85% / 21.9x | 87% / 23.0x |
| 10.0x | 71% / 14.4x | 75% / 16.4x | 79% / 18.4x | 81% / 19.4x | 83% / 20.3x |
| 11.0x | 67% / 12.8x | 71% / 14.6x | 75% / 16.4x | 77% / 17.3x | 79% / 18.2x |
| 12.0x | 63% / 11.5x | 67% / 13.1x | 71% / 14.8x | 73% / 15.6x | 75% / 16.4x |
Covenant Headroom (at 10x Entry, 6.5x Max Leverage)
Pro forma EBITDA can decline 55% before the 6.5x covenant trips. RCM uplift reduces leverage from 8.5x to 3.0x, adding 5.5 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 | $1.8M | — | $1.8M | 2.8% |
| Year 1 | $1.8M | +$2.2M | $4.1M | 6.4% |
| Year 2 | $1.9M | +$3.3M | $5.2M | 8.3% |
| Year 3 | $1.9M | +$3.3M | $5.3M | 8.3% |
| Year 4 | $2.0M | +$3.3M | $5.3M | 8.4% |
| Year 5 | $2.1M | +$3.3M | $5.4M | 8.5% |
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 | $633K | $949K | $1.3M | $1.5M |
| Denial Rate Reductio | $626K | $939K | $1.3M | $1.5M |
| A/R Days Reduction | $385K | $577K | $770K | $924K |
| Clean Claim Rate | $20K | $30K | $40K | $49K |
| Total | $1.7M | $2.5M | $3.3M | $4.0M |
Peer Context — Where This Hospital Sits
Key metrics vs 47 size-matched peers. Low percentile on margin/efficiency metrics = more room for improvement = larger bridge opportunity.
| Metric | Hospital | P25 | P50 | P75 | Percentile |
|---|---|---|---|---|---|
| Op Margin | 2.8% | -14.9% | -5.8% | 2.9% | P72 |
| Net-to-Gross | 55.2% | 41.2% | 50.8% | 65.2% | P55 |
| Occupancy | 32.9% | 21.6% | 30.6% | 48.4% | P57 |
| Rev/Bed | $3.2M | $794K | $1.8M | $3.0M | P77 |
| Exp/Bed | $3.1M | $965K | $1.8M | $2.8M | P77 |
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.