Bridge Realization Estimate
ML model predicts what fraction of the bridge is achievable (accuracy: 60%, n=5,839)
Expected realization: 72% of modeled bridge. Strengths: Revenue per Bed, Bed Count. Risks: Occupancy Rate. Risk-adjusted uplift: $1.6M (vs $2.3M 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 | $871K | $871K | $0 | 12mo |
| Denial Rate Reduction | 12.0% DEFAULT | 6.5% BENCHMARK | $838K | $24K | $862K | $0 | 12mo |
| A/R Days Reduction | 52.00 DEFAULT | 38.00 BENCHMARK | $134K | $396K | $530K | $1.7M | 9mo |
| Clean Claim Rate | 88.0% DEFAULT | 96.0% BENCHMARK | $0 | $28K | $28K | $0 | 6mo |
| Net Collection Rate | 93.5% DEFAULT | 64.9% 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 | $218K | $435K | $653K | $871K | $871K | $871K | $871K |
| Denial Rate Reduction | $0 | $216K | $431K | $647K | $862K | $862K | $862K | $862K |
| A/R Days Reduction | $0 | $177K | $353K | $530K | $530K | $530K | $530K | $530K |
| Clean Claim Rate | $0 | $14K | $28K | $28K | $28K | $28K | $28K | $28K |
| Cumulative | $0 | $624K | $1.2M | $1.9M | $2.3M | $2.3M | $2.3M | $2.3M |
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 $2.3M is added at exit.
| Entry \ Exit | 9.0x | 10.0x | 11.0x | 11.5x | 12.0x |
|---|---|---|---|---|---|
| 8.0x | 183% / 180.7x | 189% / 201.2x | 195% / 221.6x | 197% / 231.8x | 200% / 242.1x |
| 9.0x | 176% / 160.3x | 182% / 178.5x | 188% / 196.6x | 190% / 205.7x | 193% / 214.8x |
| 10.0x | 170% / 143.9x | 176% / 160.3x | 181% / 176.6x | 184% / 184.8x | 186% / 193.0x |
| 11.0x | 165% / 130.6x | 171% / 145.4x | 176% / 160.3x | 179% / 167.7x | 181% / 175.2x |
| 12.0x | 160% / 119.4x | 166% / 133.0x | 171% / 146.7x | 174% / 153.5x | 176% / 160.3x |
Covenant Headroom (at 10x Entry, 6.5x Max Leverage)
Pro forma EBITDA can decline 95% before the 6.5x covenant trips. RCM uplift reduces leverage from 8.5x to 0.3x, 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 | $95K | — | $95K | 0.2% |
| Year 1 | $98K | +$1.5M | $1.6M | 3.7% |
| Year 2 | $101K | +$2.3M | $2.4M | 5.5% |
| Year 3 | $104K | +$2.3M | $2.4M | 5.5% |
| Year 4 | $107K | +$2.3M | $2.4M | 5.5% |
| Year 5 | $111K | +$2.3M | $2.4M | 5.5% |
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 | $435K | $653K | $871K | $1.0M |
| Denial Rate Reductio | $431K | $647K | $862K | $1.0M |
| A/R Days Reduction | $265K | $397K | $530K | $636K |
| Clean Claim Rate | $14K | $21K | $28K | $33K |
| Total | $1.1M | $1.7M | $2.3M | $2.7M |
Peer Context — Where This Hospital Sits
Key metrics vs 20 size-matched peers. Low percentile on margin/efficiency metrics = more room for improvement = larger bridge opportunity.
| Metric | Hospital | P25 | P50 | P75 | Percentile |
|---|---|---|---|---|---|
| Op Margin | 0.2% | -16.0% | -6.7% | -0.8% | P80 |
| Net-to-Gross | 53.4% | 50.3% | 59.8% | 64.9% | P35 |
| Occupancy | 47.5% | 15.1% | 18.8% | 29.0% | P95 |
| Rev/Bed | $4.4M | $824K | $1.6M | $2.0M | P95 |
| Exp/Bed | $4.3M | $986K | $1.7M | $2.1M | P95 |
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.