Bridge Realization Estimate
ML model predicts what fraction of the bridge is achievable (accuracy: 60%, n=5,839)
Expected realization: 72% of modeled bridge. Strengths: Occupancy Rate. Risks: Revenue per Bed. Risk-adjusted uplift: $0.6M (vs $0.9M 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 | $328K | $328K | $0 | 12mo |
| Denial Rate Reduction | 12.0% DEFAULT | 6.5% BENCHMARK | $316K | $9K | $325K | $0 | 12mo |
| A/R Days Reduction | 52.00 DEFAULT | 38.00 BENCHMARK | $50K | $149K | $200K | $629K | 9mo |
| Clean Claim Rate | 88.0% DEFAULT | 96.0% BENCHMARK | $0 | $10K | $10K | $0 | 6mo |
| Net Collection Rate | 93.5% DEFAULT | 38.6% 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 | $82K | $164K | $246K | $328K | $328K | $328K | $328K |
| Denial Rate Reduction | $0 | $81K | $162K | $244K | $325K | $325K | $325K | $325K |
| A/R Days Reduction | $0 | $67K | $133K | $200K | $200K | $200K | $200K | $200K |
| Clean Claim Rate | $0 | $5K | $10K | $10K | $10K | $10K | $10K | $10K |
| Cumulative | $0 | $235K | $470K | $700K | $863K | $863K | $863K | $863K |
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 $863K is added at exit.
| Entry \ Exit | 9.0x | 10.0x | 11.0x | 11.5x | 12.0x |
|---|---|---|---|---|---|
| 8.0x | 51% / 7.7x | 55% / 8.9x | 59% / 10.2x | 61% / 10.8x | 63% / 11.4x |
| 9.0x | 45% / 6.5x | 50% / 7.6x | 54% / 8.7x | 56% / 9.2x | 58% / 9.8x |
| 10.0x | 41% / 5.5x | 45% / 6.5x | 50% / 7.5x | 51% / 8.0x | 53% / 8.5x |
| 11.0x | 36% / 4.7x | 41% / 5.6x | 45% / 6.5x | 47% / 7.0x | 49% / 7.4x |
| 12.0x | 32% / 4.1x | 37% / 4.9x | 42% / 5.7x | 44% / 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 2.2 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 | $2.5M | — | $2.5M | 15.4% |
| Year 1 | $2.6M | +$575K | $3.2M | 19.4% |
| Year 2 | $2.7M | +$863K | $3.5M | 21.6% |
| Year 3 | $2.8M | +$863K | $3.6M | 22.1% |
| Year 4 | $2.8M | +$863K | $3.7M | 22.6% |
| Year 5 | $2.9M | +$863K | $3.8M | 23.1% |
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 | $164K | $246K | $328K | $394K |
| Denial Rate Reductio | $162K | $244K | $325K | $390K |
| A/R Days Reduction | $100K | $150K | $200K | $239K |
| Clean Claim Rate | $5K | $8K | $10K | $13K |
| Total | $431K | $647K | $863K | $1.0M |
Peer Context — Where This Hospital Sits
Key metrics vs 121 size-matched peers. Low percentile on margin/efficiency metrics = more room for improvement = larger bridge opportunity.
| Metric | Hospital | P25 | P50 | P75 | Percentile |
|---|---|---|---|---|---|
| Op Margin | 15.4% | -9.3% | 2.9% | 11.8% | P82 |
| Net-to-Gross | 43.2% | 15.1% | 22.5% | 38.6% | P77 |
| Occupancy | 81.5% | 50.8% | 63.8% | 77.4% | P79 |
| Rev/Bed | $219K | $243K | $545K | $1.1M | P20 |
| Exp/Bed | $185K | $323K | $572K | $1.1M | P11 |
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.