Bridge Realization Estimate
ML model predicts what fraction of the bridge is achievable (accuracy: 60%, n=5,839)
Expected realization: 61% of modeled bridge. Strengths: Bed Count, Commercial Payer %. Risks: Occupancy Rate. Risk-adjusted uplift: $1.1M (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 | $683K | $683K | $0 | 12mo |
| Denial Rate Reduction | 12.0% DEFAULT | 6.5% BENCHMARK | $657K | $19K | $676K | $0 | 12mo |
| A/R Days Reduction | 52.00 DEFAULT | 38.00 BENCHMARK | $105K | $311K | $415K | $1.3M | 9mo |
| Clean Claim Rate | 88.0% DEFAULT | 96.0% BENCHMARK | $0 | $22K | $22K | $0 | 6mo |
| Net Collection Rate | 93.5% DEFAULT | 48.8% 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 | $341K | $512K | $683K | $683K | $683K | $683K |
| Denial Rate Reduction | $0 | $169K | $338K | $507K | $676K | $676K | $676K | $676K |
| A/R Days Reduction | $0 | $138K | $277K | $415K | $415K | $415K | $415K | $415K |
| Clean Claim Rate | $0 | $11K | $22K | $22K | $22K | $22K | $22K | $22K |
| Cumulative | $0 | $489K | $978K | $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 | 403% / 3217.4x | 414% / 3575.2x | 424% / 3933.1x | 428% / 4112.0x | 433% / 4290.9x |
| 9.0x | 391% / 2859.5x | 402% / 3177.6x | 411% / 3495.7x | 416% / 3654.8x | 420% / 3813.8x |
| 10.0x | 381% / 2573.3x | 391% / 2859.5x | 401% / 3145.8x | 405% / 3288.9x | 409% / 3432.1x |
| 11.0x | 372% / 2339.0x | 382% / 2599.3x | 391% / 2859.5x | 396% / 2989.7x | 400% / 3119.8x |
| 12.0x | 364% / 2143.8x | 374% / 2382.4x | 383% / 2621.0x | 387% / 2740.2x | 391% / 2859.5x |
Covenant Headroom (at 10x Entry, 6.5x Max Leverage)
Pro forma EBITDA can decline 100% before the 6.5x covenant trips. RCM uplift reduces leverage from 8.5x to 0.0x, adding 8.4 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 | $4K | — | $4K | 0.0% |
| Year 1 | $4K | +$1.2M | $1.2M | 3.5% |
| Year 2 | $4K | +$1.8M | $1.8M | 5.3% |
| Year 3 | $4K | +$1.8M | $1.8M | 5.3% |
| Year 4 | $5K | +$1.8M | $1.8M | 5.3% |
| Year 5 | $5K | +$1.8M | $1.8M | 5.3% |
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 | $341K | $512K | $683K | $819K |
| Denial Rate Reductio | $338K | $507K | $676K | $811K |
| A/R Days Reduction | $208K | $312K | $415K | $499K |
| Clean Claim Rate | $11K | $16K | $22K | $26K |
| Total | $898K | $1.3M | $1.8M | $2.2M |
Peer Context — Where This Hospital Sits
Key metrics vs 75 size-matched peers. Low percentile on margin/efficiency metrics = more room for improvement = larger bridge opportunity.
| Metric | Hospital | P25 | P50 | P75 | Percentile |
|---|---|---|---|---|---|
| Op Margin | 0.0% | -7.4% | -1.9% | 5.7% | P58 |
| Net-to-Gross | 47.6% | 33.4% | 42.5% | 48.7% | P70 |
| Occupancy | 15.7% | 17.4% | 26.2% | 40.8% | P19 |
| Rev/Bed | $1.4M | $1.1M | $1.5M | $2.0M | P42 |
| Exp/Bed | $1.4M | $1.2M | $1.5M | $2.0M | P36 |
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.