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: Net-to-Gross Ratio, Bed Count. Risks: Revenue per Bed, Commercial Payer %. Risk-adjusted uplift: $1.5M (vs $2.2M 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 |
|---|---|---|---|---|---|---|---|
| Cost to Collect | 4.5% DEFAULT | 2.5% BENCHMARK | $0 | $826K | $826K | $0 | 12mo |
| Denial Rate Reduction | 12.0% DEFAULT | 6.5% BENCHMARK | $795K | $23K | $818K | $0 | 12mo |
| A/R Days Reduction | 52.00 DEFAULT | 38.00 BENCHMARK | $127K | $376K | $503K | $1.6M | 9mo |
| Clean Claim Rate | 88.0% DEFAULT | 96.0% BENCHMARK | $0 | $26K | $26K | $0 | 6mo |
| Net Collection Rate | 93.5% DEFAULT | 46.5% 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 | $207K | $413K | $620K | $826K | $826K | $826K | $826K |
| Denial Rate Reduction | $0 | $204K | $409K | $613K | $818K | $818K | $818K | $818K |
| A/R Days Reduction | $0 | $168K | $335K | $503K | $503K | $503K | $503K | $503K |
| Clean Claim Rate | $0 | $13K | $26K | $26K | $26K | $26K | $26K | $26K |
| Cumulative | $0 | $592K | $1.2M | $1.8M | $2.2M | $2.2M | $2.2M | $2.2M |
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 $2.2M is added at exit.
| Entry \ Exit | 9.0x | 10.0x | 11.0x | 11.5x | 12.0x |
|---|---|---|---|---|---|
| 8.0x | 62% / 11.1x | 66% / 12.7x | 70% / 14.2x | 72% / 15.0x | 74% / 15.8x |
| 9.0x | 57% / 9.5x | 61% / 10.9x | 65% / 12.3x | 67% / 13.0x | 69% / 13.7x |
| 10.0x | 52% / 8.2x | 57% / 9.5x | 61% / 10.7x | 63% / 11.4x | 64% / 12.0x |
| 11.0x | 48% / 7.2x | 53% / 8.3x | 57% / 9.5x | 59% / 10.1x | 60% / 10.6x |
| 12.0x | 44% / 6.3x | 49% / 7.3x | 53% / 8.4x | 55% / 8.9x | 57% / 9.5x |
Covenant Headroom (at 10x Entry, 6.5x Max Leverage)
Pro forma EBITDA can decline 28% before the 6.5x covenant trips. RCM uplift reduces leverage from 8.5x to 4.7x, adding 3.8 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 | $2.7M | — | $2.7M | 6.6% |
| Year 1 | $2.8M | +$1.4M | $4.3M | 10.3% |
| Year 2 | $2.9M | +$2.2M | $5.1M | 12.3% |
| Year 3 | $3.0M | +$2.2M | $5.2M | 12.5% |
| Year 4 | $3.1M | +$2.2M | $5.2M | 12.7% |
| Year 5 | $3.2M | +$2.2M | $5.3M | 12.9% |
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% |
|---|---|---|---|---|
| Cost to Collect | $413K | $620K | $826K | $991K |
| Denial Rate Reductio | $409K | $613K | $818K | $982K |
| A/R Days Reduction | $251K | $377K | $503K | $603K |
| Clean Claim Rate | $13K | $20K | $26K | $32K |
| Total | $1.1M | $1.6M | $2.2M | $2.6M |
Peer Context — Where This Hospital Sits
Key metrics vs 90 size-matched peers. Low percentile on margin/efficiency metrics = more room for improvement = larger bridge opportunity.
| Metric | Hospital | P25 | P50 | P75 | Percentile |
|---|---|---|---|---|---|
| Op Margin | 6.6% | -12.2% | 4.9% | 12.7% | P57 |
| Net-to-Gross | 13.2% | 15.7% | 25.3% | 46.5% | P15 |
| Occupancy | 49.7% | 48.7% | 62.7% | 81.5% | P27 |
| Rev/Bed | $779K | $241K | $487K | $779K | P74 |
| Exp/Bed | $728K | $268K | $507K | $890K | P70 |
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.