Bridge Realization Estimate
ML model predicts what fraction of the bridge is achievable (accuracy: 60%, n=5,839)
Expected realization: 63% of modeled bridge. Strengths: Bed Count. Risks: Occupancy Rate. Risk-adjusted uplift: $1.3M (vs $2.1M 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 | $786K | $786K | $0 | 12mo |
| Denial Rate Reduction | 12.0% DEFAULT | 6.5% BENCHMARK | $756K | $22K | $778K | $0 | 12mo |
| A/R Days Reduction | 52.00 DEFAULT | 38.00 BENCHMARK | $121K | $357K | $478K | $1.5M | 9mo |
| Clean Claim Rate | 88.0% DEFAULT | 96.0% BENCHMARK | $0 | $25K | $25K | $0 | 6mo |
| Net Collection Rate | 93.5% DEFAULT | 48.7% 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 | $196K | $393K | $589K | $786K | $786K | $786K | $786K |
| Denial Rate Reduction | $0 | $194K | $389K | $583K | $778K | $778K | $778K | $778K |
| A/R Days Reduction | $0 | $159K | $319K | $478K | $478K | $478K | $478K | $478K |
| Clean Claim Rate | $0 | $13K | $25K | $25K | $25K | $25K | $25K | $25K |
| Cumulative | $0 | $563K | $1.1M | $1.7M | $2.1M | $2.1M | $2.1M | $2.1M |
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 $2.1M is added at exit.
| Entry \ Exit | 9.0x | 10.0x | 11.0x | 11.5x | 12.0x |
|---|---|---|---|---|---|
| 8.0x | 124% / 56.2x | 129% / 62.8x | 133% / 69.4x | 136% / 72.7x | 138% / 76.0x |
| 9.0x | 118% / 49.6x | 123% / 55.4x | 128% / 61.3x | 130% / 64.2x | 132% / 67.2x |
| 10.0x | 113% / 44.3x | 118% / 49.6x | 123% / 54.9x | 125% / 57.5x | 127% / 60.1x |
| 11.0x | 109% / 40.0x | 114% / 44.8x | 118% / 49.6x | 120% / 52.0x | 122% / 54.4x |
| 12.0x | 105% / 36.4x | 110% / 40.8x | 114% / 45.2x | 116% / 47.4x | 118% / 49.6x |
Covenant Headroom (at 10x Entry, 6.5x Max Leverage)
Pro forma EBITDA can decline 84% before the 6.5x covenant trips. RCM uplift reduces leverage from 8.5x to 1.1x, adding 7.4 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 | $297K | — | $297K | 0.8% |
| Year 1 | $306K | +$1.4M | $1.7M | 4.3% |
| Year 2 | $315K | +$2.1M | $2.4M | 6.1% |
| Year 3 | $324K | +$2.1M | $2.4M | 6.1% |
| Year 4 | $334K | +$2.1M | $2.4M | 6.1% |
| Year 5 | $344K | +$2.1M | $2.4M | 6.1% |
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 | $393K | $589K | $786K | $943K |
| Denial Rate Reductio | $389K | $583K | $778K | $933K |
| A/R Days Reduction | $239K | $359K | $478K | $574K |
| Clean Claim Rate | $13K | $19K | $25K | $30K |
| Total | $1.0M | $1.6M | $2.1M | $2.5M |
Peer Context — Where This Hospital Sits
Key metrics vs 76 size-matched peers. Low percentile on margin/efficiency metrics = more room for improvement = larger bridge opportunity.
| Metric | Hospital | P25 | P50 | P75 | Percentile |
|---|---|---|---|---|---|
| Op Margin | 0.8% | -19.8% | -3.7% | 5.4% | P64 |
| Net-to-Gross | 17.8% | 26.7% | 35.1% | 48.7% | P7 |
| Occupancy | 26.4% | 23.3% | 40.6% | 60.4% | P28 |
| Rev/Bed | $1.4M | $493K | $723K | $1.3M | P74 |
| Exp/Bed | $1.3M | $573K | $801K | $1.3M | P75 |
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.