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, Net-to-Gross Ratio. Risk-adjusted uplift: $4.6M (vs $6.8M 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 | $2.6M | $2.6M | $0 | 12mo |
| Denial Rate Reduction | 12.0% DEFAULT | 6.5% BENCHMARK | $2.5M | $72K | $2.6M | $0 | 12mo |
| A/R Days Reduction | 52.00 DEFAULT | 38.00 BENCHMARK | $399K | $1.2M | $1.6M | $5.0M | 9mo |
| Clean Claim Rate | 88.0% DEFAULT | 96.0% BENCHMARK | $0 | $83K | $83K | $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 | $650K | $1.3M | $2.0M | $2.6M | $2.6M | $2.6M | $2.6M |
| Denial Rate Reduction | $0 | $644K | $1.3M | $1.9M | $2.6M | $2.6M | $2.6M | $2.6M |
| A/R Days Reduction | $0 | $528K | $1.1M | $1.6M | $1.6M | $1.6M | $1.6M | $1.6M |
| Clean Claim Rate | $0 | $42K | $83K | $83K | $83K | $83K | $83K | $83K |
| Cumulative | $0 | $1.9M | $3.7M | $5.5M | $6.8M | $6.8M | $6.8M | $6.8M |
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 $6.8M is added at exit.
| Entry \ Exit | 9.0x | 10.0x | 11.0x | 11.5x | 12.0x |
|---|---|---|---|---|---|
| 8.0x | 147% / 91.8x | 152% / 102.4x | 157% / 112.9x | 160% / 118.2x | 162% / 123.5x |
| 9.0x | 141% / 81.2x | 146% / 90.6x | 151% / 100.0x | 154% / 104.7x | 156% / 109.4x |
| 10.0x | 136% / 72.8x | 141% / 81.2x | 146% / 89.7x | 148% / 93.9x | 150% / 98.2x |
| 11.0x | 131% / 65.9x | 136% / 73.6x | 141% / 81.2x | 143% / 85.1x | 145% / 88.9x |
| 12.0x | 127% / 60.1x | 132% / 67.2x | 137% / 74.2x | 139% / 77.7x | 141% / 81.2x |
Covenant Headroom (at 10x Entry, 6.5x Max Leverage)
Pro forma EBITDA can decline 90% before the 6.5x covenant trips. RCM uplift reduces leverage from 8.5x to 0.7x, adding 7.8 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 | $578K | — | $578K | 0.4% |
| Year 1 | $595K | +$4.6M | $5.2M | 4.0% |
| Year 2 | $613K | +$6.8M | $7.5M | 5.7% |
| Year 3 | $631K | +$6.8M | $7.5M | 5.7% |
| Year 4 | $650K | +$6.8M | $7.5M | 5.8% |
| Year 5 | $670K | +$6.8M | $7.5M | 5.8% |
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 | $1.3M | $2.0M | $2.6M | $3.1M |
| Denial Rate Reductio | $1.3M | $1.9M | $2.6M | $3.1M |
| A/R Days Reduction | $791K | $1.2M | $1.6M | $1.9M |
| Clean Claim Rate | $42K | $62K | $83K | $100K |
| Total | $3.4M | $5.1M | $6.8M | $8.2M |
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 | 0.4% | -10.9% | -5.5% | 2.9% | P69 |
| Net-to-Gross | 66.7% | 37.9% | 47.4% | 63.5% | P80 |
| Occupancy | 26.0% | 21.9% | 31.6% | 52.4% | P35 |
| Rev/Bed | $5.2M | $955K | $1.9M | $3.0M | P94 |
| Exp/Bed | $5.2M | $1.0M | $1.9M | $2.8M | P92 |
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.