Bridge Realization Estimate
ML model predicts what fraction of the bridge is achievable (accuracy: 60%, n=5,839)
Expected realization: 69% of modeled bridge. Strengths: Occupancy Rate, Commercial Payer %. Risks: Revenue per Bed, Net-to-Gross Ratio. Risk-adjusted uplift: $0.7M (vs $1.0M 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 | $376K | $376K | $0 | 12mo |
| Denial Rate Reduction | 12.0% DEFAULT | 6.5% BENCHMARK | $361K | $10K | $372K | $0 | 12mo |
| A/R Days Reduction | 52.00 DEFAULT | 38.00 BENCHMARK | $58K | $171K | $228K | $720K | 9mo |
| Clean Claim Rate | 88.0% DEFAULT | 96.0% BENCHMARK | $0 | $12K | $12K | $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 | $94K | $188K | $282K | $376K | $376K | $376K | $376K |
| Denial Rate Reduction | $0 | $93K | $186K | $279K | $372K | $372K | $372K | $372K |
| A/R Days Reduction | $0 | $76K | $152K | $228K | $228K | $228K | $228K | $228K |
| Clean Claim Rate | $0 | $6K | $12K | $12K | $12K | $12K | $12K | $12K |
| Cumulative | $0 | $269K | $538K | $801K | $988K | $988K | $988K | $988K |
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 $988K is added at exit.
| Entry \ Exit | 9.0x | 10.0x | 11.0x | 11.5x | 12.0x |
|---|---|---|---|---|---|
| 8.0x | -100% / 0.0x | -100% / 0.0x | -100% / 0.0x | -100% / 0.0x | -100% / 0.0x |
| 9.0x | -100% / 0.0x | -100% / 0.0x | -100% / 0.0x | -100% / 0.0x | -100% / 0.0x |
| 10.0x | -100% / 0.0x | -100% / 0.0x | -100% / 0.0x | -100% / 0.0x | -100% / 0.0x |
| 11.0x | -100% / 0.0x | -100% / 0.0x | -100% / 0.0x | -100% / 0.0x | -100% / 0.0x |
| 12.0x | -100% / 0.0x | -100% / 0.0x | -100% / 0.0x | -100% / 0.0x | -100% / 0.0x |
Covenant Headroom (at 10x Entry, 6.5x Max Leverage)
Pro forma EBITDA can decline 181% before the 6.5x covenant trips. RCM uplift reduces leverage from 99.0x to -5.3x, adding 104.3 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 | $-380K | — | $-380K | -2.0% |
| Year 1 | $-392K | +$659K | $267K | 1.4% |
| Year 2 | $-403K | +$988K | $584K | 3.1% |
| Year 3 | $-416K | +$988K | $572K | 3.0% |
| Year 4 | $-428K | +$988K | $560K | 3.0% |
| Year 5 | $-441K | +$988K | $547K | 2.9% |
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 | $188K | $282K | $376K | $451K |
| Denial Rate Reductio | $186K | $279K | $372K | $446K |
| A/R Days Reduction | $114K | $171K | $228K | $274K |
| Clean Claim Rate | $6K | $9K | $12K | $14K |
| Total | $494K | $741K | $988K | $1.2M |
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 | -2.0% | -21.7% | -7.9% | 0.7% | P64 |
| Net-to-Gross | 60.0% | 27.9% | 33.0% | 41.1% | P87 |
| Occupancy | 64.2% | 27.1% | 35.5% | 53.2% | P85 |
| Rev/Bed | $329K | $404K | $829K | $1.4M | P15 |
| Exp/Bed | $336K | $506K | $1.1M | $1.5M | P8 |
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.