Bridge Realization Estimate
ML model predicts what fraction of the bridge is achievable (accuracy: 60%, n=5,839)
Expected realization: 70% of modeled bridge. Strengths: Occupancy Rate, Payer Diversity. Risks: Revenue per Bed, Commercial Payer %. Risk-adjusted uplift: $1.2M (vs $1.7M 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 | $633K | $633K | $0 | 12mo |
| Denial Rate Reduction | 12.0% DEFAULT | 6.5% BENCHMARK | $609K | $17K | $626K | $0 | 12mo |
| A/R Days Reduction | 52.00 DEFAULT | 38.00 BENCHMARK | $97K | $288K | $385K | $1.2M | 9mo |
| Clean Claim Rate | 88.0% DEFAULT | 96.0% BENCHMARK | $0 | $20K | $20K | $0 | 6mo |
| Net Collection Rate | 93.5% DEFAULT | 39.9% 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 | $158K | $316K | $475K | $633K | $633K | $633K | $633K |
| Denial Rate Reduction | $0 | $157K | $313K | $470K | $626K | $626K | $626K | $626K |
| A/R Days Reduction | $0 | $128K | $257K | $385K | $385K | $385K | $385K | $385K |
| Clean Claim Rate | $0 | $10K | $20K | $20K | $20K | $20K | $20K | $20K |
| Cumulative | $0 | $453K | $906K | $1.3M | $1.7M | $1.7M | $1.7M | $1.7M |
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 $1.7M is added at exit.
| Entry \ Exit | 9.0x | 10.0x | 11.0x | 11.5x | 12.0x |
|---|---|---|---|---|---|
| 8.0x | 49% / 7.4x | 54% / 8.6x | 58% / 9.8x | 60% / 10.4x | 62% / 11.0x |
| 9.0x | 44% / 6.2x | 49% / 7.3x | 53% / 8.3x | 55% / 8.9x | 57% / 9.4x |
| 10.0x | 40% / 5.3x | 44% / 6.2x | 48% / 7.2x | 50% / 7.7x | 52% / 8.1x |
| 11.0x | 35% / 4.5x | 40% / 5.4x | 44% / 6.2x | 46% / 6.7x | 48% / 7.1x |
| 12.0x | 31% / 3.9x | 36% / 4.7x | 40% / 5.5x | 42% / 5.8x | 44% / 6.2x |
Covenant Headroom (at 10x Entry, 6.5x Max Leverage)
Pro forma EBITDA can decline -0% before the 6.5x covenant trips. RCM uplift reduces leverage from 8.5x to 6.5x, adding 2.0 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 | $5.5M | — | $5.5M | 17.5% |
| Year 1 | $5.7M | +$1.1M | $6.8M | 21.5% |
| Year 2 | $5.9M | +$1.7M | $7.5M | 23.8% |
| Year 3 | $6.0M | +$1.7M | $7.7M | 24.4% |
| Year 4 | $6.2M | +$1.7M | $7.9M | 24.9% |
| Year 5 | $6.4M | +$1.7M | $8.1M | 25.5% |
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 | $316K | $475K | $633K | $759K |
| Denial Rate Reductio | $313K | $470K | $626K | $752K |
| A/R Days Reduction | $192K | $289K | $385K | $462K |
| Clean Claim Rate | $10K | $15K | $20K | $24K |
| Total | $832K | $1.2M | $1.7M | $2.0M |
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 | 17.5% | -22.8% | -9.2% | 3.7% | P88 |
| Net-to-Gross | 64.9% | 22.6% | 30.2% | 39.9% | P93 |
| Occupancy | 75.1% | 32.9% | 44.0% | 65.6% | P81 |
| Rev/Bed | $395K | $571K | $992K | $1.6M | P15 |
| Exp/Bed | $326K | $518K | $1.2M | $1.7M | P13 |
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.