Bridge Realization Estimate
ML model predicts what fraction of the bridge is achievable (accuracy: 60%, n=5,839)
Expected realization: 70% of modeled bridge. Strengths: Occupancy Rate, Bed Count. Risks: Revenue per Bed. Risk-adjusted uplift: $0.7M (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 | $359K | $359K | $0 | 12mo |
| Denial Rate Reduction | 12.0% DEFAULT | 6.5% BENCHMARK | $346K | $10K | $355K | $0 | 12mo |
| A/R Days Reduction | 52.00 DEFAULT | 38.00 BENCHMARK | $55K | $163K | $218K | $689K | 9mo |
| Clean Claim Rate | 88.0% DEFAULT | 96.0% BENCHMARK | $0 | $11K | $11K | $0 | 6mo |
| Net Collection Rate | 93.5% DEFAULT | 47.3% 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 | $90K | $180K | $269K | $359K | $359K | $359K | $359K |
| Denial Rate Reduction | $0 | $89K | $178K | $267K | $355K | $355K | $355K | $355K |
| A/R Days Reduction | $0 | $73K | $146K | $218K | $218K | $218K | $218K | $218K |
| Clean Claim Rate | $0 | $6K | $11K | $11K | $11K | $11K | $11K | $11K |
| Cumulative | $0 | $257K | $514K | $766K | $945K | $945K | $945K | $945K |
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 $945K is added at exit.
| Entry \ Exit | 9.0x | 10.0x | 11.0x | 11.5x | 12.0x |
|---|---|---|---|---|---|
| 8.0x | 82% / 19.8x | 86% / 22.4x | 90% / 25.0x | 92% / 26.2x | 94% / 27.5x |
| 9.0x | 77% / 17.3x | 81% / 19.6x | 85% / 21.8x | 87% / 23.0x | 89% / 24.1x |
| 10.0x | 72% / 15.2x | 77% / 17.3x | 81% / 19.3x | 83% / 20.4x | 84% / 21.4x |
| 11.0x | 68% / 13.5x | 73% / 15.4x | 77% / 17.3x | 79% / 18.2x | 80% / 19.1x |
| 12.0x | 65% / 12.1x | 69% / 13.8x | 73% / 15.6x | 75% / 16.4x | 77% / 17.3x |
Covenant Headroom (at 10x Entry, 6.5x Max Leverage)
Pro forma EBITDA can decline 57% before the 6.5x covenant trips. RCM uplift reduces leverage from 8.5x to 2.8x, adding 5.6 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 | $473K | — | $473K | 2.6% |
| Year 1 | $487K | +$630K | $1.1M | 6.2% |
| Year 2 | $502K | +$945K | $1.4M | 8.1% |
| Year 3 | $517K | +$945K | $1.5M | 8.1% |
| Year 4 | $532K | +$945K | $1.5M | 8.2% |
| Year 5 | $548K | +$945K | $1.5M | 8.3% |
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 | $180K | $269K | $359K | $431K |
| Denial Rate Reductio | $178K | $267K | $355K | $427K |
| A/R Days Reduction | $109K | $164K | $218K | $262K |
| Clean Claim Rate | $6K | $9K | $11K | $14K |
| Total | $472K | $708K | $945K | $1.1M |
Peer Context — Where This Hospital Sits
Key metrics vs 88 size-matched peers. Low percentile on margin/efficiency metrics = more room for improvement = larger bridge opportunity.
| Metric | Hospital | P25 | P50 | P75 | Percentile |
|---|---|---|---|---|---|
| Op Margin | 2.6% | -16.1% | -3.5% | 6.8% | P70 |
| Net-to-Gross | 32.2% | 23.8% | 33.5% | 47.3% | P45 |
| Occupancy | 67.4% | 26.0% | 43.6% | 64.7% | P76 |
| Rev/Bed | $427K | $493K | $723K | $1.4M | P16 |
| Exp/Bed | $416K | $531K | $783K | $1.4M | P12 |
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.