Bridge Realization Estimate
ML model predicts what fraction of the bridge is achievable (accuracy: 60%, n=5,839)
Expected realization: 62% of modeled bridge. Strengths: Bed Count, Commercial Payer %. Risks: Occupancy Rate. Risk-adjusted uplift: $1.2M (vs $2.0M 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 | $758K | $758K | $0 | 12mo |
| Denial Rate Reduction | 12.0% DEFAULT | 6.5% BENCHMARK | $730K | $21K | $750K | $0 | 12mo |
| A/R Days Reduction | 52.00 DEFAULT | 38.00 BENCHMARK | $116K | $345K | $461K | $1.5M | 9mo |
| Clean Claim Rate | 88.0% DEFAULT | 96.0% BENCHMARK | $0 | $24K | $24K | $0 | 6mo |
| Net Collection Rate | 93.5% DEFAULT | 61.5% 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 | $189K | $379K | $568K | $758K | $758K | $758K | $758K |
| Denial Rate Reduction | $0 | $188K | $375K | $563K | $750K | $750K | $750K | $750K |
| A/R Days Reduction | $0 | $154K | $307K | $461K | $461K | $461K | $461K | $461K |
| Clean Claim Rate | $0 | $12K | $24K | $24K | $24K | $24K | $24K | $24K |
| Cumulative | $0 | $543K | $1.1M | $1.6M | $2.0M | $2.0M | $2.0M | $2.0M |
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 $2.0M is added at exit.
| Entry \ Exit | 9.0x | 10.0x | 11.0x | 11.5x | 12.0x |
|---|---|---|---|---|---|
| 8.0x | 85% / 21.6x | 89% / 24.4x | 94% / 27.2x | 96% / 28.6x | 97% / 29.9x |
| 9.0x | 80% / 18.9x | 84% / 21.4x | 89% / 23.8x | 90% / 25.0x | 92% / 26.3x |
| 10.0x | 76% / 16.7x | 80% / 18.9x | 84% / 21.1x | 86% / 22.2x | 88% / 23.3x |
| 11.0x | 72% / 14.9x | 76% / 16.9x | 80% / 18.9x | 82% / 19.9x | 84% / 20.9x |
| 12.0x | 68% / 13.3x | 72% / 15.2x | 76% / 17.0x | 78% / 18.0x | 80% / 18.9x |
Covenant Headroom (at 10x Entry, 6.5x Max Leverage)
Pro forma EBITDA can decline 60% before the 6.5x covenant trips. RCM uplift reduces leverage from 8.5x to 2.6x, adding 5.9 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 | $888K | — | $888K | 2.3% |
| Year 1 | $914K | +$1.3M | $2.2M | 5.9% |
| Year 2 | $942K | +$2.0M | $2.9M | 7.7% |
| Year 3 | $970K | +$2.0M | $3.0M | 7.8% |
| Year 4 | $999K | +$2.0M | $3.0M | 7.9% |
| Year 5 | $1.0M | +$2.0M | $3.0M | 8.0% |
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 | $379K | $568K | $758K | $910K |
| Denial Rate Reductio | $375K | $563K | $750K | $900K |
| A/R Days Reduction | $231K | $346K | $461K | $553K |
| Clean Claim Rate | $12K | $18K | $24K | $29K |
| Total | $997K | $1.5M | $2.0M | $2.4M |
Peer Context — Where This Hospital Sits
Key metrics vs 94 size-matched peers. Low percentile on margin/efficiency metrics = more room for improvement = larger bridge opportunity.
| Metric | Hospital | P25 | P50 | P75 | Percentile |
|---|---|---|---|---|---|
| Op Margin | 2.3% | -14.5% | -8.3% | -3.1% | P91 |
| Net-to-Gross | 51.9% | 47.2% | 53.5% | 61.5% | P41 |
| Occupancy | 18.7% | 14.6% | 20.6% | 32.9% | P44 |
| Rev/Bed | $1.5M | $906K | $1.3M | $1.8M | P59 |
| Exp/Bed | $1.5M | $971K | $1.4M | $2.1M | P54 |
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.