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, Net-to-Gross Ratio. Risks: Revenue per Bed. Risk-adjusted uplift: $1.0M (vs $1.5M 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 | $554K | $554K | $0 | 12mo |
| Denial Rate Reduction | 12.0% DEFAULT | 6.5% BENCHMARK | $534K | $15K | $549K | $0 | 12mo |
| A/R Days Reduction | 52.00 DEFAULT | 38.00 BENCHMARK | $85K | $252K | $337K | $1.1M | 9mo |
| Clean Claim Rate | 88.0% DEFAULT | 96.0% BENCHMARK | $0 | $18K | $18K | $0 | 6mo |
| Net Collection Rate | 93.5% DEFAULT | 41.4% 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 | $139K | $277K | $416K | $554K | $554K | $554K | $554K |
| Denial Rate Reduction | $0 | $137K | $274K | $412K | $549K | $549K | $549K | $549K |
| A/R Days Reduction | $0 | $112K | $225K | $337K | $337K | $337K | $337K | $337K |
| Clean Claim Rate | $0 | $9K | $18K | $18K | $18K | $18K | $18K | $18K |
| Cumulative | $0 | $397K | $794K | $1.2M | $1.5M | $1.5M | $1.5M | $1.5M |
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 $1.5M is added at exit.
| Entry \ Exit | 9.0x | 10.0x | 11.0x | 11.5x | 12.0x |
|---|---|---|---|---|---|
| 8.0x | 62% / 11.0x | 66% / 12.6x | 70% / 14.2x | 72% / 14.9x | 74% / 15.7x |
| 9.0x | 57% / 9.4x | 61% / 10.8x | 65% / 12.2x | 67% / 12.9x | 69% / 13.6x |
| 10.0x | 52% / 8.1x | 57% / 9.4x | 61% / 10.7x | 62% / 11.3x | 64% / 11.9x |
| 11.0x | 48% / 7.1x | 53% / 8.3x | 57% / 9.4x | 58% / 10.0x | 60% / 10.6x |
| 12.0x | 44% / 6.2x | 49% / 7.3x | 53% / 8.3x | 55% / 8.9x | 57% / 9.4x |
Covenant Headroom (at 10x Entry, 6.5x Max Leverage)
Pro forma EBITDA can decline 27% before the 6.5x covenant trips. RCM uplift reduces leverage from 8.5x to 4.7x, adding 3.7 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 | $1.9M | — | $1.9M | 6.7% |
| Year 1 | $1.9M | +$972K | $2.9M | 10.4% |
| Year 2 | $2.0M | +$1.5M | $3.4M | 12.3% |
| Year 3 | $2.0M | +$1.5M | $3.5M | 12.6% |
| Year 4 | $2.1M | +$1.5M | $3.5M | 12.8% |
| Year 5 | $2.1M | +$1.5M | $3.6M | 13.0% |
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 | $277K | $416K | $554K | $665K |
| Denial Rate Reductio | $274K | $412K | $549K | $659K |
| A/R Days Reduction | $169K | $253K | $337K | $405K |
| Clean Claim Rate | $9K | $13K | $18K | $21K |
| Total | $729K | $1.1M | $1.5M | $1.7M |
Peer Context — Where This Hospital Sits
Key metrics vs 73 size-matched peers. Low percentile on margin/efficiency metrics = more room for improvement = larger bridge opportunity.
| Metric | Hospital | P25 | P50 | P75 | Percentile |
|---|---|---|---|---|---|
| Op Margin | 6.7% | -11.7% | 0.8% | 14.5% | P57 |
| Net-to-Gross | 11.8% | 26.0% | 31.7% | 41.4% | P0 |
| Occupancy | 60.6% | 39.0% | 53.6% | 68.5% | P62 |
| Rev/Bed | $454K | $362K | $870K | $2.0M | P36 |
| Exp/Bed | $424K | $354K | $774K | $1.9M | P34 |
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.