Bridge Realization Estimate
ML model predicts what fraction of the bridge is achievable (accuracy: 60%, n=5,839)
Expected realization: 73% of modeled bridge. Strengths: Occupancy Rate, Bed Count. Risks: Revenue per Bed. Risk-adjusted uplift: $0.9M (vs $1.2M 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 | $459K | $459K | $0 | 12mo |
| Denial Rate Reduction | 12.0% DEFAULT | 6.5% BENCHMARK | $442K | $13K | $455K | $0 | 12mo |
| A/R Days Reduction | 52.00 DEFAULT | 38.00 BENCHMARK | $70K | $209K | $279K | $881K | 9mo |
| Clean Claim Rate | 88.0% DEFAULT | 96.0% BENCHMARK | $0 | $15K | $15K | $0 | 6mo |
| Net Collection Rate | 93.5% DEFAULT | 38.1% 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 | $115K | $230K | $344K | $459K | $459K | $459K | $459K |
| Denial Rate Reduction | $0 | $114K | $227K | $341K | $455K | $455K | $455K | $455K |
| A/R Days Reduction | $0 | $93K | $186K | $279K | $279K | $279K | $279K | $279K |
| Clean Claim Rate | $0 | $7K | $15K | $15K | $15K | $15K | $15K | $15K |
| Cumulative | $0 | $329K | $658K | $980K | $1.2M | $1.2M | $1.2M | $1.2M |
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 $1.2M is added at exit.
| Entry \ Exit | 9.0x | 10.0x | 11.0x | 11.5x | 12.0x |
|---|---|---|---|---|---|
| 8.0x | 186% / 192.2x | 192% / 213.9x | 198% / 235.6x | 201% / 246.5x | 203% / 257.3x |
| 9.0x | 179% / 170.5x | 186% / 189.8x | 191% / 209.1x | 194% / 218.7x | 196% / 228.4x |
| 10.0x | 174% / 153.1x | 179% / 170.5x | 185% / 187.8x | 188% / 196.5x | 190% / 205.2x |
| 11.0x | 168% / 138.9x | 174% / 154.7x | 179% / 170.5x | 182% / 178.4x | 184% / 186.3x |
| 12.0x | 164% / 127.0x | 169% / 141.5x | 175% / 156.0x | 177% / 163.2x | 179% / 170.5x |
Covenant Headroom (at 10x Entry, 6.5x Max Leverage)
Pro forma EBITDA can decline 95% before the 6.5x covenant trips. RCM uplift reduces leverage from 8.5x to 0.3x, adding 8.1 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 | $47K | — | $47K | 0.2% |
| Year 1 | $49K | +$805K | $854K | 3.7% |
| Year 2 | $50K | +$1.2M | $1.3M | 5.5% |
| Year 3 | $52K | +$1.2M | $1.3M | 5.5% |
| Year 4 | $53K | +$1.2M | $1.3M | 5.5% |
| Year 5 | $55K | +$1.2M | $1.3M | 5.5% |
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 | $230K | $344K | $459K | $551K |
| Denial Rate Reductio | $227K | $341K | $455K | $546K |
| A/R Days Reduction | $140K | $210K | $279K | $335K |
| Clean Claim Rate | $7K | $11K | $15K | $18K |
| Total | $604K | $906K | $1.2M | $1.4M |
Peer Context — Where This Hospital Sits
Key metrics vs 69 size-matched peers. Low percentile on margin/efficiency metrics = more room for improvement = larger bridge opportunity.
| Metric | Hospital | P25 | P50 | P75 | Percentile |
|---|---|---|---|---|---|
| Op Margin | 0.2% | -15.0% | -1.4% | 7.2% | P55 |
| Net-to-Gross | 40.9% | 18.6% | 30.4% | 38.1% | P82 |
| Occupancy | 79.9% | 28.7% | 55.1% | 78.8% | P78 |
| Rev/Bed | $396K | $479K | $680K | $1.4M | P18 |
| Exp/Bed | $395K | $480K | $769K | $1.5M | P14 |
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.