Bridge Realization Estimate
ML model predicts what fraction of the bridge is achievable (accuracy: 60%, n=5,839)
Expected realization: 58% of modeled bridge. Strengths: Bed Count. Risks: Occupancy Rate, Net-to-Gross Ratio. Risk-adjusted uplift: $0.7M (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 | $448K | $448K | $0 | 12mo |
| Denial Rate Reduction | 12.0% DEFAULT | 6.5% BENCHMARK | $431K | $12K | $443K | $0 | 12mo |
| A/R Days Reduction | 52.00 DEFAULT | 38.00 BENCHMARK | $69K | $204K | $272K | $858K | 9mo |
| Clean Claim Rate | 88.0% DEFAULT | 96.0% BENCHMARK | $0 | $14K | $14K | $0 | 6mo |
| Net Collection Rate | 93.5% DEFAULT | 50.1% 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 | $112K | $224K | $336K | $448K | $448K | $448K | $448K |
| Denial Rate Reduction | $0 | $111K | $222K | $332K | $443K | $443K | $443K | $443K |
| A/R Days Reduction | $0 | $91K | $182K | $272K | $272K | $272K | $272K | $272K |
| Clean Claim Rate | $0 | $7K | $14K | $14K | $14K | $14K | $14K | $14K |
| Cumulative | $0 | $321K | $641K | $955K | $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 | 86% / 22.4x | 91% / 25.2x | 95% / 28.1x | 97% / 29.5x | 99% / 30.9x |
| 9.0x | 81% / 19.6x | 86% / 22.1x | 90% / 24.6x | 92% / 25.9x | 94% / 27.1x |
| 10.0x | 77% / 17.3x | 81% / 19.6x | 85% / 21.8x | 87% / 23.0x | 89% / 24.1x |
| 11.0x | 73% / 15.4x | 77% / 17.5x | 81% / 19.6x | 83% / 20.6x | 85% / 21.6x |
| 12.0x | 69% / 13.8x | 74% / 15.8x | 78% / 17.6x | 79% / 18.6x | 81% / 19.6x |
Covenant Headroom (at 10x Entry, 6.5x Max Leverage)
Pro forma EBITDA can decline 61% before the 6.5x covenant trips. RCM uplift reduces leverage from 8.5x to 2.5x, adding 5.9 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 | $501K | — | $501K | 2.2% |
| Year 1 | $516K | +$785K | $1.3M | 5.8% |
| Year 2 | $532K | +$1.2M | $1.7M | 7.6% |
| Year 3 | $548K | +$1.2M | $1.7M | 7.7% |
| Year 4 | $564K | +$1.2M | $1.7M | 7.8% |
| Year 5 | $581K | +$1.2M | $1.8M | 7.9% |
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 | $224K | $336K | $448K | $537K |
| Denial Rate Reductio | $222K | $332K | $443K | $532K |
| A/R Days Reduction | $136K | $204K | $272K | $327K |
| Clean Claim Rate | $7K | $11K | $14K | $17K |
| Total | $589K | $883K | $1.2M | $1.4M |
Peer Context — Where This Hospital Sits
Key metrics vs 57 size-matched peers. Low percentile on margin/efficiency metrics = more room for improvement = larger bridge opportunity.
| Metric | Hospital | P25 | P50 | P75 | Percentile |
|---|---|---|---|---|---|
| Op Margin | 2.2% | -6.1% | -0.8% | 9.5% | P60 |
| Net-to-Gross | 61.4% | 36.9% | 44.3% | 50.1% | P93 |
| Occupancy | 3.8% | 17.0% | 23.8% | 34.4% | P0 |
| Rev/Bed | $1.5M | $1.2M | $1.7M | $2.3M | P44 |
| Exp/Bed | $1.5M | $1.2M | $1.5M | $2.0M | P40 |
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.