Bridge Realization Estimate
ML model predicts what fraction of the bridge is achievable (accuracy: 60%, n=5,839)
Expected realization: 68% of modeled bridge. Strengths: Revenue per Bed, Bed Count. Risks: Occupancy Rate. Risk-adjusted uplift: $1.9M (vs $2.8M 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 | $1.1M | $1.1M | $0 | 12mo |
| Denial Rate Reduction | 12.0% DEFAULT | 6.5% BENCHMARK | $1.0M | $30K | $1.1M | $0 | 12mo |
| A/R Days Reduction | 52.00 DEFAULT | 38.00 BENCHMARK | $166K | $492K | $658K | $2.1M | 9mo |
| Clean Claim Rate | 88.0% DEFAULT | 96.0% BENCHMARK | $0 | $35K | $35K | $0 | 6mo |
| Net Collection Rate | 93.5% DEFAULT | 61.8% 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 | $270K | $541K | $811K | $1.1M | $1.1M | $1.1M | $1.1M |
| Denial Rate Reduction | $0 | $268K | $536K | $803K | $1.1M | $1.1M | $1.1M | $1.1M |
| A/R Days Reduction | $0 | $219K | $439K | $658K | $658K | $658K | $658K | $658K |
| Clean Claim Rate | $0 | $17K | $35K | $35K | $35K | $35K | $35K | $35K |
| Cumulative | $0 | $775K | $1.5M | $2.3M | $2.8M | $2.8M | $2.8M | $2.8M |
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 $2.8M is added at exit.
| Entry \ Exit | 9.0x | 10.0x | 11.0x | 11.5x | 12.0x |
|---|---|---|---|---|---|
| 8.0x | 173% / 152.1x | 179% / 169.4x | 185% / 186.6x | 187% / 195.3x | 190% / 203.9x |
| 9.0x | 167% / 134.8x | 172% / 150.2x | 178% / 165.5x | 180% / 173.2x | 183% / 180.9x |
| 10.0x | 161% / 121.0x | 167% / 134.8x | 172% / 148.7x | 174% / 155.6x | 177% / 162.5x |
| 11.0x | 156% / 109.7x | 162% / 122.3x | 167% / 134.8x | 169% / 141.1x | 171% / 147.4x |
| 12.0x | 151% / 100.3x | 157% / 111.8x | 162% / 123.3x | 164% / 129.1x | 167% / 134.8x |
Covenant Headroom (at 10x Entry, 6.5x Max Leverage)
Pro forma EBITDA can decline 94% before the 6.5x covenant trips. RCM uplift reduces leverage from 8.5x to 0.4x, adding 8.1 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 | $142K | — | $142K | 0.3% |
| Year 1 | $146K | +$1.9M | $2.0M | 3.8% |
| Year 2 | $150K | +$2.8M | $3.0M | 5.5% |
| Year 3 | $155K | +$2.8M | $3.0M | 5.5% |
| Year 4 | $159K | +$2.8M | $3.0M | 5.6% |
| Year 5 | $164K | +$2.8M | $3.0M | 5.6% |
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 | $541K | $811K | $1.1M | $1.3M |
| Denial Rate Reductio | $536K | $803K | $1.1M | $1.3M |
| A/R Days Reduction | $329K | $494K | $658K | $790K |
| Clean Claim Rate | $17K | $26K | $35K | $42K |
| Total | $1.4M | $2.1M | $2.8M | $3.4M |
Peer Context — Where This Hospital Sits
Key metrics vs 87 size-matched peers. Low percentile on margin/efficiency metrics = more room for improvement = larger bridge opportunity.
| Metric | Hospital | P25 | P50 | P75 | Percentile |
|---|---|---|---|---|---|
| Op Margin | 0.3% | -13.0% | -8.0% | -2.6% | P87 |
| Net-to-Gross | 35.6% | 48.7% | 54.7% | 61.8% | P2 |
| Occupancy | 40.7% | 14.3% | 20.2% | 32.1% | P91 |
| Rev/Bed | $3.0M | $955K | $1.4M | $1.9M | P91 |
| Exp/Bed | $3.0M | $1.0M | $1.5M | $2.1M | P90 |
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.