Bridge Realization Estimate
ML model predicts what fraction of the bridge is achievable (accuracy: 60%, n=5,839)
Expected realization: 64% of modeled bridge. Strengths: Payer Diversity. Risks: Revenue per Bed, Commercial Payer %. Risk-adjusted uplift: $1.6M (vs $2.6M 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 | $976K | $976K | $0 | 12mo |
| Denial Rate Reduction | 12.0% DEFAULT | 6.5% BENCHMARK | $939K | $27K | $966K | $0 | 12mo |
| A/R Days Reduction | 52.00 DEFAULT | 38.00 BENCHMARK | $150K | $444K | $594K | $1.9M | 9mo |
| Clean Claim Rate | 88.0% DEFAULT | 96.0% BENCHMARK | $0 | $31K | $31K | $0 | 6mo |
| Net Collection Rate | 93.5% DEFAULT | 32.5% 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 | $244K | $488K | $732K | $976K | $976K | $976K | $976K |
| Denial Rate Reduction | $0 | $242K | $483K | $725K | $966K | $966K | $966K | $966K |
| A/R Days Reduction | $0 | $198K | $396K | $594K | $594K | $594K | $594K | $594K |
| Clean Claim Rate | $0 | $16K | $31K | $31K | $31K | $31K | $31K | $31K |
| Cumulative | $0 | $699K | $1.4M | $2.1M | $2.6M | $2.6M | $2.6M | $2.6M |
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 $2.6M is added at exit.
| Entry \ Exit | 9.0x | 10.0x | 11.0x | 11.5x | 12.0x |
|---|---|---|---|---|---|
| 8.0x | 47% / 6.8x | 51% / 7.9x | 55% / 9.0x | 57% / 9.6x | 59% / 10.2x |
| 9.0x | 42% / 5.7x | 46% / 6.7x | 50% / 7.7x | 52% / 8.2x | 54% / 8.7x |
| 10.0x | 37% / 4.8x | 42% / 5.7x | 46% / 6.6x | 48% / 7.0x | 50% / 7.5x |
| 11.0x | 32% / 4.1x | 37% / 4.9x | 42% / 5.7x | 44% / 6.1x | 45% / 6.5x |
| 12.0x | 28% / 3.5x | 33% / 4.2x | 38% / 5.0x | 40% / 5.3x | 42% / 5.7x |
Covenant Headroom (at 10x Entry, 6.5x Max Leverage)
Pro forma EBITDA can decline -7% before the 6.5x covenant trips. RCM uplift reduces leverage from 8.5x to 7.0x, adding 1.5 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 | $11.9M | — | $11.9M | 24.4% |
| Year 1 | $12.2M | +$1.7M | $14.0M | 28.6% |
| Year 2 | $12.6M | +$2.6M | $15.2M | 31.1% |
| Year 3 | $13.0M | +$2.6M | $15.6M | 31.9% |
| Year 4 | $13.4M | +$2.6M | $16.0M | 32.7% |
| Year 5 | $13.8M | +$2.6M | $16.4M | 33.5% |
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 | $488K | $732K | $976K | $1.2M |
| Denial Rate Reductio | $483K | $725K | $966K | $1.2M |
| A/R Days Reduction | $297K | $445K | $594K | $712K |
| Clean Claim Rate | $16K | $23K | $31K | $37K |
| Total | $1.3M | $1.9M | $2.6M | $3.1M |
Peer Context — Where This Hospital Sits
Key metrics vs 91 size-matched peers. Low percentile on margin/efficiency metrics = more room for improvement = larger bridge opportunity.
| Metric | Hospital | P25 | P50 | P75 | Percentile |
|---|---|---|---|---|---|
| Op Margin | 24.4% | -20.8% | -8.7% | 0.9% | P97 |
| Net-to-Gross | 67.3% | 20.8% | 25.2% | 32.5% | P96 |
| Occupancy | 51.9% | 46.0% | 58.6% | 71.4% | P33 |
| Rev/Bed | $232K | $666K | $1.2M | $1.6M | P2 |
| Exp/Bed | $176K | $738K | $1.2M | $1.7M | P2 |
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.