Bridge Realization Estimate
ML model predicts what fraction of the bridge is achievable (accuracy: 60%, n=5,839)
Expected realization: 76% of modeled bridge. Strengths: Occupancy Rate, Bed Count. Risks: Revenue per Bed. Risk-adjusted uplift: $0.8M (vs $1.1M 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 | $425K | $425K | $0 | 12mo |
| Denial Rate Reduction | 12.0% DEFAULT | 6.5% BENCHMARK | $409K | $12K | $420K | $0 | 12mo |
| A/R Days Reduction | 52.00 DEFAULT | 38.00 BENCHMARK | $65K | $193K | $258K | $814K | 9mo |
| Clean Claim Rate | 88.0% DEFAULT | 96.0% BENCHMARK | $0 | $14K | $14K | $0 | 6mo |
| Net Collection Rate | 93.5% DEFAULT | 51.4% 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 | $106K | $212K | $318K | $425K | $425K | $425K | $425K |
| Denial Rate Reduction | $0 | $105K | $210K | $315K | $420K | $420K | $420K | $420K |
| A/R Days Reduction | $0 | $86K | $172K | $258K | $258K | $258K | $258K | $258K |
| Clean Claim Rate | $0 | $7K | $14K | $14K | $14K | $14K | $14K | $14K |
| Cumulative | $0 | $304K | $608K | $906K | $1.1M | $1.1M | $1.1M | $1.1M |
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 $1.1M is added at exit.
| Entry \ Exit | 9.0x | 10.0x | 11.0x | 11.5x | 12.0x |
|---|---|---|---|---|---|
| 8.0x | 50% / 7.7x | 55% / 8.9x | 59% / 10.1x | 61% / 10.8x | 63% / 11.4x |
| 9.0x | 45% / 6.5x | 50% / 7.6x | 54% / 8.7x | 56% / 9.2x | 58% / 9.7x |
| 10.0x | 41% / 5.5x | 45% / 6.5x | 49% / 7.5x | 51% / 8.0x | 53% / 8.4x |
| 11.0x | 36% / 4.7x | 41% / 5.6x | 45% / 6.5x | 47% / 6.9x | 49% / 7.4x |
| 12.0x | 32% / 4.1x | 37% / 4.9x | 42% / 5.7x | 43% / 6.1x | 45% / 6.5x |
Covenant Headroom (at 10x Entry, 6.5x Max Leverage)
Pro forma EBITDA can decline 3% before the 6.5x covenant trips. RCM uplift reduces leverage from 8.5x to 6.3x, adding 2.1 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 | $3.3M | — | $3.3M | 15.5% |
| Year 1 | $3.4M | +$745K | $4.1M | 19.5% |
| Year 2 | $3.5M | +$1.1M | $4.6M | 21.7% |
| Year 3 | $3.6M | +$1.1M | $4.7M | 22.2% |
| Year 4 | $3.7M | +$1.1M | $4.8M | 22.7% |
| Year 5 | $3.8M | +$1.1M | $4.9M | 23.3% |
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 | $212K | $318K | $425K | $510K |
| Denial Rate Reductio | $210K | $315K | $420K | $504K |
| A/R Days Reduction | $129K | $194K | $258K | $310K |
| Clean Claim Rate | $7K | $10K | $14K | $16K |
| Total | $559K | $838K | $1.1M | $1.3M |
Peer Context — Where This Hospital Sits
Key metrics vs 62 size-matched peers. Low percentile on margin/efficiency metrics = more room for improvement = larger bridge opportunity.
| Metric | Hospital | P25 | P50 | P75 | Percentile |
|---|---|---|---|---|---|
| Op Margin | 15.5% | -23.9% | -1.8% | 8.1% | P87 |
| Net-to-Gross | 15.0% | 16.6% | 28.5% | 51.4% | P16 |
| Occupancy | 91.4% | 39.6% | 56.8% | 80.8% | P90 |
| Rev/Bed | $624K | $237K | $505K | $784K | P65 |
| Exp/Bed | $528K | $393K | $538K | $1.1M | P44 |
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.