Bridge Realization Estimate
ML model predicts what fraction of the bridge is achievable (accuracy: 60%, n=5,839)
Expected realization: 75% of modeled bridge. Strengths: Occupancy Rate. Risks: Revenue per Bed. Risk-adjusted uplift: $1.7M (vs $2.3M 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 | $872K | $872K | $0 | 12mo |
| Denial Rate Reduction | 12.0% DEFAULT | 6.5% BENCHMARK | $840K | $24K | $864K | $0 | 12mo |
| A/R Days Reduction | 52.00 DEFAULT | 38.00 BENCHMARK | $134K | $397K | $531K | $1.7M | 9mo |
| Clean Claim Rate | 88.0% DEFAULT | 96.0% BENCHMARK | $0 | $28K | $28K | $0 | 6mo |
| Net Collection Rate | 93.5% DEFAULT | 37.3% 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 | $218K | $436K | $654K | $872K | $872K | $872K | $872K |
| Denial Rate Reduction | $0 | $216K | $432K | $648K | $864K | $864K | $864K | $864K |
| A/R Days Reduction | $0 | $177K | $354K | $531K | $531K | $531K | $531K | $531K |
| Clean Claim Rate | $0 | $14K | $28K | $28K | $28K | $28K | $28K | $28K |
| Cumulative | $0 | $625K | $1.2M | $1.9M | $2.3M | $2.3M | $2.3M | $2.3M |
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 $2.3M is added at exit.
| Entry \ Exit | 9.0x | 10.0x | 11.0x | 11.5x | 12.0x |
|---|---|---|---|---|---|
| 8.0x | 93% / 26.9x | 98% / 30.3x | 102% / 33.6x | 104% / 35.3x | 106% / 37.0x |
| 9.0x | 88% / 23.6x | 93% / 26.6x | 97% / 29.5x | 99% / 31.0x | 101% / 32.5x |
| 10.0x | 84% / 20.9x | 88% / 23.6x | 92% / 26.3x | 94% / 27.6x | 96% / 28.9x |
| 11.0x | 80% / 18.7x | 84% / 21.1x | 88% / 23.6x | 90% / 24.8x | 92% / 26.0x |
| 12.0x | 76% / 16.9x | 80% / 19.1x | 84% / 21.3x | 86% / 22.5x | 88% / 23.6x |
Covenant Headroom (at 10x Entry, 6.5x Max Leverage)
Pro forma EBITDA can decline 67% before the 6.5x covenant trips. RCM uplift reduces leverage from 8.5x to 2.1x, adding 6.3 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 | $773K | — | $773K | 1.8% |
| Year 1 | $796K | +$1.5M | $2.3M | 5.3% |
| Year 2 | $820K | +$2.3M | $3.1M | 7.1% |
| Year 3 | $845K | +$2.3M | $3.1M | 7.2% |
| Year 4 | $870K | +$2.3M | $3.2M | 7.3% |
| Year 5 | $896K | +$2.3M | $3.2M | 7.3% |
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 | $436K | $654K | $872K | $1.0M |
| Denial Rate Reductio | $432K | $648K | $864K | $1.0M |
| A/R Days Reduction | $265K | $398K | $531K | $637K |
| Clean Claim Rate | $14K | $21K | $28K | $33K |
| Total | $1.1M | $1.7M | $2.3M | $2.8M |
Peer Context — Where This Hospital Sits
Key metrics vs 120 size-matched peers. Low percentile on margin/efficiency metrics = more room for improvement = larger bridge opportunity.
| Metric | Hospital | P25 | P50 | P75 | Percentile |
|---|---|---|---|---|---|
| Op Margin | 1.8% | -8.9% | 2.8% | 12.3% | P43 |
| Net-to-Gross | 29.8% | 13.9% | 20.6% | 37.3% | P64 |
| Occupancy | 90.1% | 48.7% | 62.6% | 77.2% | P91 |
| Rev/Bed | $513K | $324K | $592K | $1.2M | P44 |
| Exp/Bed | $504K | $358K | $628K | $1.1M | P37 |
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.