Bridge Realization Estimate
ML model predicts what fraction of the bridge is achievable (accuracy: 60%, n=5,839)
Expected realization: 61% of modeled bridge. Strengths: Bed Count, Commercial Payer %. Risks: Occupancy Rate, Revenue per Bed. Risk-adjusted uplift: $0.2M (vs $0.4M 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 |
|---|---|---|---|---|---|---|---|
| Denial Rate Reduction | 12.0% DEFAULT | 6.5% BENCHMARK | $127K | $8K | $136K | $0 | 12mo |
| Cost to Collect | 4.5% DEFAULT | 2.5% BENCHMARK | $0 | $132K | $132K | $0 | 12mo |
| A/R Days Reduction | 52.00 DEFAULT | 38.00 BENCHMARK | $20K | $60K | $80K | $254K | 9mo |
| Clean Claim Rate | 88.0% DEFAULT | 96.0% BENCHMARK | $0 | $10K | $10K | $0 | 6mo |
| Net Collection Rate | 93.5% DEFAULT | 88.6% 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 |
|---|---|---|---|---|---|---|---|---|
| Denial Rate Reduction | $0 | $34K | $68K | $102K | $136K | $136K | $136K | $136K |
| Cost to Collect | $0 | $33K | $66K | $99K | $132K | $132K | $132K | $132K |
| A/R Days Reduction | $0 | $27K | $54K | $80K | $80K | $80K | $80K | $80K |
| Clean Claim Rate | $0 | $5K | $10K | $10K | $10K | $10K | $10K | $10K |
| Cumulative | $0 | $99K | $197K | $291K | $358K | $358K | $358K | $358K |
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 $358K is added at exit.
| Entry \ Exit | 9.0x | 10.0x | 11.0x | 11.5x | 12.0x |
|---|---|---|---|---|---|
| 8.0x | 59% / 10.2x | 63% / 11.7x | 67% / 13.2x | 69% / 13.9x | 71% / 14.7x |
| 9.0x | 54% / 8.7x | 59% / 10.0x | 63% / 11.3x | 64% / 12.0x | 66% / 12.7x |
| 10.0x | 50% / 7.5x | 54% / 8.7x | 58% / 9.9x | 60% / 10.5x | 62% / 11.1x |
| 11.0x | 45% / 6.5x | 50% / 7.6x | 54% / 8.7x | 56% / 9.2x | 58% / 9.8x |
| 12.0x | 42% / 5.7x | 46% / 6.7x | 50% / 7.7x | 52% / 8.2x | 54% / 8.7x |
Covenant Headroom (at 10x Entry, 6.5x Max Leverage)
Pro forma EBITDA can decline 22% before the 6.5x covenant trips. RCM uplift reduces leverage from 8.5x to 5.0x, adding 3.4 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 | $529K | — | $529K | 8.0% |
| Year 1 | $545K | +$239K | $783K | 11.8% |
| Year 2 | $561K | +$358K | $919K | 13.9% |
| Year 3 | $578K | +$358K | $936K | 14.2% |
| Year 4 | $595K | +$358K | $953K | 14.4% |
| Year 5 | $613K | +$358K | $971K | 14.7% |
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% |
|---|---|---|---|---|
| Denial Rate Reductio | $68K | $102K | $136K | $163K |
| Cost to Collect | $66K | $99K | $132K | $159K |
| A/R Days Reduction | $40K | $60K | $80K | $97K |
| Clean Claim Rate | $5K | $7K | $10K | $12K |
| Total | $179K | $268K | $358K | $429K |
Peer Context — Where This Hospital Sits
Key metrics vs 26 size-matched peers. Low percentile on margin/efficiency metrics = more room for improvement = larger bridge opportunity.
| Metric | Hospital | P25 | P50 | P75 | Percentile |
|---|---|---|---|---|---|
| Op Margin | -50.0% | -30.0% | -20.3% | -10.1% | P0 |
| Net-to-Gross | 16.6% | 58.4% | 69.3% | 88.6% | P0 |
| Occupancy | 13.4% | 19.7% | 23.2% | 28.8% | P8 |
| Rev/Bed | $826K | $546K | $838K | $1.3M | P50 |
| Exp/Bed | $1.8M | $707K | $1.0M | $1.4M | P88 |
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.