Bridge Realization Estimate
ML model predicts what fraction of the bridge is achievable (accuracy: 60%, n=5,839)
Expected realization: 78% of modeled bridge. Strengths: Occupancy Rate, Commercial Payer %. Risks: Revenue per Bed, Net-to-Gross Ratio. Risk-adjusted uplift: $1.1M (vs $1.4M 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 | $544K | $544K | $0 | 12mo |
| Denial Rate Reduction | 12.0% DEFAULT | 6.5% BENCHMARK | $524K | $15K | $539K | $0 | 12mo |
| A/R Days Reduction | 52.00 DEFAULT | 38.00 BENCHMARK | $83K | $248K | $331K | $1.0M | 9mo |
| Clean Claim Rate | 88.0% DEFAULT | 96.0% BENCHMARK | $0 | $17K | $17K | $0 | 6mo |
| Net Collection Rate | 93.5% DEFAULT | 56.1% 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 | $136K | $272K | $408K | $544K | $544K | $544K | $544K |
| Denial Rate Reduction | $0 | $135K | $269K | $404K | $539K | $539K | $539K | $539K |
| A/R Days Reduction | $0 | $110K | $221K | $331K | $331K | $331K | $331K | $331K |
| Clean Claim Rate | $0 | $9K | $17K | $17K | $17K | $17K | $17K | $17K |
| Cumulative | $0 | $390K | $779K | $1.2M | $1.4M | $1.4M | $1.4M | $1.4M |
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 $1.4M is added at exit.
| Entry \ Exit | 9.0x | 10.0x | 11.0x | 11.5x | 12.0x |
|---|---|---|---|---|---|
| 8.0x | 46% / 6.6x | 50% / 7.7x | 54% / 8.8x | 56% / 9.3x | 58% / 9.9x |
| 9.0x | 41% / 5.5x | 45% / 6.5x | 49% / 7.5x | 51% / 7.9x | 53% / 8.4x |
| 10.0x | 36% / 4.6x | 41% / 5.5x | 45% / 6.4x | 47% / 6.8x | 49% / 7.3x |
| 11.0x | 31% / 3.9x | 36% / 4.7x | 41% / 5.5x | 43% / 5.9x | 45% / 6.3x |
| 12.0x | 27% / 3.3x | 32% / 4.0x | 37% / 4.8x | 39% / 5.1x | 41% / 5.5x |
Covenant Headroom (at 10x Entry, 6.5x Max Leverage)
Pro forma EBITDA can decline -10% before the 6.5x covenant trips. RCM uplift reduces leverage from 8.5x to 7.1x, adding 1.3 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 | $7.6M | — | $7.6M | 28.0% |
| Year 1 | $7.8M | +$954K | $8.8M | 32.3% |
| Year 2 | $8.1M | +$1.4M | $9.5M | 35.0% |
| Year 3 | $8.3M | +$1.4M | $9.8M | 35.8% |
| Year 4 | $8.6M | +$1.4M | $10.0M | 36.8% |
| Year 5 | $8.8M | +$1.4M | $10.3M | 37.7% |
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 | $272K | $408K | $544K | $653K |
| Denial Rate Reductio | $269K | $404K | $539K | $646K |
| A/R Days Reduction | $166K | $248K | $331K | $397K |
| Clean Claim Rate | $9K | $13K | $17K | $21K |
| Total | $716K | $1.1M | $1.4M | $1.7M |
Peer Context — Where This Hospital Sits
Key metrics vs 2636 size-matched peers. Low percentile on margin/efficiency metrics = more room for improvement = larger bridge opportunity.
| Metric | Hospital | P25 | P50 | P75 | Percentile |
|---|---|---|---|---|---|
| Op Margin | 28.0% | -17.7% | -5.3% | 5.2% | P97 |
| Net-to-Gross | 62.5% | 29.2% | 41.6% | 56.1% | P84 |
| Occupancy | 96.7% | 21.7% | 39.4% | 61.2% | P99 |
| Rev/Bed | $800K | $464K | $920K | $1.8M | P45 |
| Exp/Bed | $576K | $489K | $1.0M | $1.9M | P31 |
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.