Bridge Realization Estimate
ML model predicts what fraction of the bridge is achievable (accuracy: 60%, n=5,839)
Expected realization: 60% of modeled bridge. Strengths: Commercial Payer %. Risks: Occupancy Rate, Revenue per Bed. 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 | $70K | $8K | $78K | $0 | 12mo |
| Cost to Collect | 4.5% DEFAULT | 2.5% BENCHMARK | $0 | $72K | $72K | $0 | 12mo |
| A/R Days Reduction | 52.00 DEFAULT | 38.00 BENCHMARK | $11K | $33K | $44K | $139K | 9mo |
| Clean Claim Rate | 88.0% DEFAULT | 96.0% BENCHMARK | $0 | $10K | $10K | $0 | 6mo |
| Net Collection Rate | 93.5% DEFAULT | 37.0% 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 | $19K | $39K | $58K | $78K | $78K | $78K | $78K |
| Cost to Collect | $0 | $18K | $36K | $54K | $72K | $72K | $72K | $72K |
| A/R Days Reduction | $0 | $15K | $29K | $44K | $44K | $44K | $44K | $44K |
| Clean Claim Rate | $0 | $5K | $10K | $10K | $10K | $10K | $10K | $10K |
| Cumulative | $0 | $57K | $114K | $166K | $204K | $204K | $204K | $204K |
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 $204K 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% / 14.9x |
| 9.0x | 55% / 8.9x | 59% / 10.2x | 63% / 11.6x | 65% / 12.2x | 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% / 5.8x | 47% / 6.8x | 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 | $290K | — | $290K | 8.0% |
| Year 1 | $298K | +$136K | $434K | 12.0% |
| Year 2 | $307K | +$204K | $511K | 14.1% |
| Year 3 | $316K | +$204K | $520K | 14.4% |
| Year 4 | $326K | +$204K | $530K | 14.6% |
| Year 5 | $336K | +$204K | $540K | 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 | $39K | $58K | $78K | $94K |
| Cost to Collect | $36K | $54K | $72K | $87K |
| A/R Days Reduction | $22K | $33K | $44K | $53K |
| Clean Claim Rate | $5K | $7K | $10K | $12K |
| Total | $102K | $153K | $204K | $245K |
Peer Context — Where This Hospital Sits
Key metrics vs 37 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% | -9.8% | -1.7% | 5.6% | P0 |
| Net-to-Gross | 31.0% | 20.4% | 29.6% | 37.0% | P57 |
| Occupancy | 20.0% | 43.6% | 63.3% | 75.7% | P3 |
| Rev/Bed | $39K | $335K | $1.7M | $2.2M | P3 |
| Exp/Bed | $96K | $417K | $1.5M | $2.2M | P0 |
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.