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, Commercial Payer %. Risks: Revenue per Bed, Net-to-Gross Ratio. Risk-adjusted uplift: $1.3M (vs $1.8M 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 | $685K | $685K | $0 | 12mo |
| Denial Rate Reduction | 12.0% DEFAULT | 6.5% BENCHMARK | $659K | $19K | $678K | $0 | 12mo |
| A/R Days Reduction | 52.00 DEFAULT | 38.00 BENCHMARK | $105K | $312K | $417K | $1.3M | 9mo |
| Clean Claim Rate | 88.0% DEFAULT | 96.0% BENCHMARK | $0 | $22K | $22K | $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 | $171K | $343K | $514K | $685K | $685K | $685K | $685K |
| Denial Rate Reduction | $0 | $170K | $339K | $509K | $678K | $678K | $678K | $678K |
| A/R Days Reduction | $0 | $139K | $278K | $417K | $417K | $417K | $417K | $417K |
| Clean Claim Rate | $0 | $11K | $22K | $22K | $22K | $22K | $22K | $22K |
| Cumulative | $0 | $491K | $982K | $1.5M | $1.8M | $1.8M | $1.8M | $1.8M |
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 $1.8M is added at exit.
| Entry \ Exit | 9.0x | 10.0x | 11.0x | 11.5x | 12.0x |
|---|---|---|---|---|---|
| 8.0x | 46% / 6.6x | 50% / 7.7x | 54% / 8.8x | 56% / 9.3x | 58% / 9.8x |
| 9.0x | 41% / 5.5x | 45% / 6.5x | 49% / 7.4x | 51% / 7.9x | 53% / 8.4x |
| 10.0x | 36% / 4.6x | 41% / 5.5x | 45% / 6.4x | 47% / 6.8x | 49% / 7.2x |
| 11.0x | 31% / 3.9x | 36% / 4.7x | 41% / 5.5x | 43% / 5.9x | 44% / 6.3x |
| 12.0x | 27% / 3.3x | 32% / 4.0x | 37% / 4.8x | 39% / 5.1x | 41% / 5.5x |
Covenant Headroom (at 10x Entry, 6.5x Max Leverage)
Pro forma EBITDA can decline -10% before the 6.5x covenant trips. RCM uplift reduces leverage from 8.5x to 7.1x, adding 1.3 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 | $9.8M | — | $9.8M | 28.6% |
| Year 1 | $10.1M | +$1.2M | $11.3M | 33.0% |
| Year 2 | $10.4M | +$1.8M | $12.2M | 35.6% |
| Year 3 | $10.7M | +$1.8M | $12.5M | 36.5% |
| Year 4 | $11.0M | +$1.8M | $12.8M | 37.5% |
| Year 5 | $11.4M | +$1.8M | $13.2M | 38.4% |
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 | $343K | $514K | $685K | $822K |
| Denial Rate Reductio | $339K | $509K | $678K | $814K |
| A/R Days Reduction | $208K | $313K | $417K | $500K |
| Clean Claim Rate | $11K | $16K | $22K | $26K |
| Total | $901K | $1.4M | $1.8M | $2.2M |
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 | 28.6% | -15.0% | -1.4% | 7.2% | P92 |
| Net-to-Gross | 76.7% | 18.6% | 30.4% | 38.1% | P98 |
| Occupancy | 87.4% | 30.5% | 60.4% | 79.5% | P88 |
| Rev/Bed | $571K | $479K | $680K | $1.4M | P43 |
| Exp/Bed | $408K | $480K | $769K | $1.5M | P16 |
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.