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 | $676K | $676K | $0 | 12mo |
| Denial Rate Reduction | 12.0% DEFAULT | 6.5% BENCHMARK | $650K | $19K | $669K | $0 | 12mo |
| A/R Days Reduction | 52.00 DEFAULT | 38.00 BENCHMARK | $104K | $307K | $411K | $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 | $169K | $338K | $507K | $676K | $676K | $676K | $676K |
| Denial Rate Reduction | $0 | $167K | $334K | $502K | $669K | $669K | $669K | $669K |
| A/R Days Reduction | $0 | $137K | $274K | $411K | $411K | $411K | $411K | $411K |
| Clean Claim Rate | $0 | $11K | $22K | $22K | $22K | $22K | $22K | $22K |
| Cumulative | $0 | $484K | $968K | $1.4M | $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 | 129% / 62.6x | 134% / 70.0x | 139% / 77.3x | 141% / 80.9x | 143% / 84.6x |
| 9.0x | 123% / 55.3x | 128% / 61.8x | 133% / 68.3x | 135% / 71.6x | 137% / 74.8x |
| 10.0x | 118% / 49.5x | 123% / 55.3x | 128% / 61.2x | 130% / 64.1x | 132% / 67.0x |
| 11.0x | 114% / 44.7x | 119% / 50.0x | 123% / 55.3x | 125% / 58.0x | 127% / 60.6x |
| 12.0x | 110% / 40.7x | 115% / 45.6x | 119% / 50.4x | 121% / 52.9x | 123% / 55.3x |
Covenant Headroom (at 10x Entry, 6.5x Max Leverage)
Pro forma EBITDA can decline 85% before the 6.5x covenant trips. RCM uplift reduces leverage from 8.5x to 1.0x, adding 7.5 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 | $226K | — | $226K | 0.7% |
| Year 1 | $233K | +$1.2M | $1.4M | 4.2% |
| Year 2 | $240K | +$1.8M | $2.0M | 6.0% |
| Year 3 | $247K | +$1.8M | $2.0M | 6.0% |
| Year 4 | $255K | +$1.8M | $2.0M | 6.0% |
| Year 5 | $262K | +$1.8M | $2.0M | 6.0% |
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 | $338K | $507K | $676K | $811K |
| Denial Rate Reductio | $334K | $502K | $669K | $803K |
| A/R Days Reduction | $206K | $308K | $411K | $493K |
| Clean Claim Rate | $11K | $16K | $22K | $26K |
| Total | $888K | $1.3M | $1.8M | $2.1M |
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 | 0.7% | -7.4% | -1.9% | 5.7% | P59 |
| Net-to-Gross | 49.3% | 33.4% | 42.5% | 48.7% | P77 |
| Occupancy | 16.8% | 17.4% | 26.2% | 40.8% | P21 |
| Rev/Bed | $1.4M | $1.1M | $1.5M | $2.0M | P40 |
| Exp/Bed | $1.3M | $1.2M | $1.5M | $2.0M | P32 |
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.