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: Commercial Payer %, Bed Count. Risks: Occupancy Rate, Revenue per Bed. Risk-adjusted uplift: $0.5M (vs $0.8M 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 | $312K | $312K | $0 | 12mo |
| Denial Rate Reduction | 12.0% DEFAULT | 6.5% BENCHMARK | $300K | $9K | $309K | $0 | 12mo |
| A/R Days Reduction | 52.00 DEFAULT | 38.00 BENCHMARK | $48K | $142K | $190K | $598K | 9mo |
| Clean Claim Rate | 88.0% DEFAULT | 96.0% BENCHMARK | $0 | $10K | $10K | $0 | 6mo |
| Net Collection Rate | 93.5% DEFAULT | 41.1% 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 | $78K | $156K | $234K | $312K | $312K | $312K | $312K |
| Denial Rate Reduction | $0 | $77K | $154K | $231K | $309K | $309K | $309K | $309K |
| A/R Days Reduction | $0 | $63K | $126K | $190K | $190K | $190K | $190K | $190K |
| Clean Claim Rate | $0 | $5K | $10K | $10K | $10K | $10K | $10K | $10K |
| Cumulative | $0 | $223K | $447K | $665K | $820K | $820K | $820K | $820K |
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 $820K is added at exit.
| Entry \ Exit | 9.0x | 10.0x | 11.0x | 11.5x | 12.0x |
|---|---|---|---|---|---|
| 8.0x | 134% / 69.8x | 139% / 77.9x | 144% / 86.0x | 146% / 90.0x | 148% / 94.1x |
| 9.0x | 128% / 61.6x | 133% / 68.8x | 138% / 76.1x | 140% / 79.7x | 142% / 83.3x |
| 10.0x | 123% / 55.1x | 128% / 61.6x | 133% / 68.1x | 135% / 71.4x | 137% / 74.6x |
| 11.0x | 119% / 49.8x | 123% / 55.7x | 128% / 61.6x | 130% / 64.6x | 132% / 67.5x |
| 12.0x | 115% / 45.4x | 119% / 50.8x | 124% / 56.2x | 126% / 58.9x | 128% / 61.6x |
Covenant Headroom (at 10x Entry, 6.5x Max Leverage)
Pro forma EBITDA can decline 87% before the 6.5x covenant trips. RCM uplift reduces leverage from 8.5x to 0.9x, adding 7.6 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 | $93K | — | $93K | 0.6% |
| Year 1 | $96K | +$547K | $642K | 4.1% |
| Year 2 | $99K | +$820K | $919K | 5.9% |
| Year 3 | $102K | +$820K | $922K | 5.9% |
| Year 4 | $105K | +$820K | $925K | 5.9% |
| Year 5 | $108K | +$820K | $928K | 6.0% |
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 | $156K | $234K | $312K | $374K |
| Denial Rate Reductio | $154K | $231K | $309K | $370K |
| A/R Days Reduction | $95K | $142K | $190K | $228K |
| Clean Claim Rate | $5K | $7K | $10K | $12K |
| Total | $410K | $615K | $820K | $984K |
Peer Context — Where This Hospital Sits
Key metrics vs 39 size-matched peers. Low percentile on margin/efficiency metrics = more room for improvement = larger bridge opportunity.
| Metric | Hospital | P25 | P50 | P75 | Percentile |
|---|---|---|---|---|---|
| Op Margin | 0.6% | -21.7% | -7.9% | 0.7% | P72 |
| Net-to-Gross | 44.4% | 27.9% | 33.0% | 41.1% | P79 |
| Occupancy | 28.0% | 27.1% | 35.5% | 53.2% | P26 |
| Rev/Bed | $278K | $404K | $829K | $1.4M | P8 |
| Exp/Bed | $277K | $506K | $1.1M | $1.5M | P3 |
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.