Bridge Realization Estimate
ML model predicts what fraction of the bridge is achievable (accuracy: 60%, n=5,839)
Expected realization: 74% 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 | $435K | $435K | $0 | 12mo |
| Denial Rate Reduction | 12.0% DEFAULT | 6.5% BENCHMARK | $419K | $12K | $431K | $0 | 12mo |
| A/R Days Reduction | 52.00 DEFAULT | 38.00 BENCHMARK | $67K | $198K | $265K | $834K | 9mo |
| Clean Claim Rate | 88.0% DEFAULT | 96.0% BENCHMARK | $0 | $14K | $14K | $0 | 6mo |
| Net Collection Rate | 93.5% DEFAULT | 47.6% 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 | $109K | $217K | $326K | $435K | $435K | $435K | $435K |
| Denial Rate Reduction | $0 | $108K | $215K | $323K | $431K | $431K | $431K | $431K |
| A/R Days Reduction | $0 | $88K | $176K | $265K | $265K | $265K | $265K | $265K |
| Clean Claim Rate | $0 | $7K | $14K | $14K | $14K | $14K | $14K | $14K |
| Cumulative | $0 | $312K | $623K | $928K | $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 | 75% / 16.4x | 79% / 18.5x | 83% / 20.7x | 85% / 21.8x | 87% / 22.9x |
| 9.0x | 70% / 14.2x | 74% / 16.1x | 78% / 18.1x | 80% / 19.0x | 82% / 20.0x |
| 10.0x | 66% / 12.4x | 70% / 14.2x | 74% / 15.9x | 76% / 16.8x | 78% / 17.7x |
| 11.0x | 62% / 11.0x | 66% / 12.6x | 70% / 14.2x | 72% / 15.0x | 74% / 15.8x |
| 12.0x | 58% / 9.8x | 62% / 11.3x | 66% / 12.7x | 68% / 13.4x | 70% / 14.2x |
Covenant Headroom (at 10x Entry, 6.5x Max Leverage)
Pro forma EBITDA can decline 48% before the 6.5x covenant trips. RCM uplift reduces leverage from 8.5x to 3.4x, adding 5.1 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 | $752K | — | $752K | 3.5% |
| Year 1 | $775K | +$763K | $1.5M | 7.1% |
| Year 2 | $798K | +$1.1M | $1.9M | 8.9% |
| Year 3 | $822K | +$1.1M | $2.0M | 9.0% |
| Year 4 | $846K | +$1.1M | $2.0M | 9.2% |
| Year 5 | $872K | +$1.1M | $2.0M | 9.3% |
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 | $217K | $326K | $435K | $522K |
| Denial Rate Reductio | $215K | $323K | $431K | $517K |
| A/R Days Reduction | $132K | $198K | $265K | $318K |
| Clean Claim Rate | $7K | $10K | $14K | $17K |
| Total | $572K | $858K | $1.1M | $1.4M |
Peer Context — Where This Hospital Sits
Key metrics vs 86 size-matched peers. Low percentile on margin/efficiency metrics = more room for improvement = larger bridge opportunity.
| Metric | Hospital | P25 | P50 | P75 | Percentile |
|---|---|---|---|---|---|
| Op Margin | 3.5% | -16.7% | -3.4% | 7.3% | P70 |
| Net-to-Gross | 13.3% | 23.3% | 34.0% | 47.6% | P5 |
| Occupancy | 79.9% | 25.3% | 42.7% | 66.4% | P87 |
| Rev/Bed | $544K | $487K | $715K | $1.4M | P32 |
| Exp/Bed | $525K | $529K | $772K | $1.3M | P23 |
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.