Bridge Realization Estimate
ML model predicts what fraction of the bridge is achievable (accuracy: 60%, n=5,839)
Expected realization: 73% of modeled bridge. Strengths: Occupancy Rate, Commercial Payer %. Risks: Net-to-Gross Ratio, Revenue per Bed. Risk-adjusted uplift: $0.9M (vs $1.2M 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 | $465K | $465K | $0 | 12mo |
| Denial Rate Reduction | 12.0% DEFAULT | 6.5% BENCHMARK | $448K | $13K | $460K | $0 | 12mo |
| A/R Days Reduction | 52.00 DEFAULT | 38.00 BENCHMARK | $71K | $212K | $283K | $892K | 9mo |
| Clean Claim Rate | 88.0% DEFAULT | 96.0% BENCHMARK | $0 | $15K | $15K | $0 | 6mo |
| Net Collection Rate | 93.5% DEFAULT | 41.9% 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 | $116K | $232K | $349K | $465K | $465K | $465K | $465K |
| Denial Rate Reduction | $0 | $115K | $230K | $345K | $460K | $460K | $460K | $460K |
| A/R Days Reduction | $0 | $94K | $189K | $283K | $283K | $283K | $283K | $283K |
| Clean Claim Rate | $0 | $7K | $15K | $15K | $15K | $15K | $15K | $15K |
| Cumulative | $0 | $333K | $666K | $992K | $1.2M | $1.2M | $1.2M | $1.2M |
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 $1.2M is added at exit.
| Entry \ Exit | 9.0x | 10.0x | 11.0x | 11.5x | 12.0x |
|---|---|---|---|---|---|
| 8.0x | 127% / 59.7x | 132% / 66.7x | 136% / 73.7x | 138% / 77.2x | 141% / 80.7x |
| 9.0x | 121% / 52.7x | 126% / 58.9x | 131% / 65.1x | 133% / 68.2x | 135% / 71.3x |
| 10.0x | 116% / 47.1x | 121% / 52.7x | 125% / 58.3x | 128% / 61.1x | 130% / 63.9x |
| 11.0x | 112% / 42.5x | 117% / 47.6x | 121% / 52.7x | 123% / 55.2x | 125% / 57.8x |
| 12.0x | 108% / 38.7x | 113% / 43.4x | 117% / 48.0x | 119% / 50.4x | 121% / 52.7x |
Covenant Headroom (at 10x Entry, 6.5x Max Leverage)
Pro forma EBITDA can decline 85% before the 6.5x covenant trips. RCM uplift reduces leverage from 8.5x to 1.0x, adding 7.5 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 | $164K | — | $164K | 0.7% |
| Year 1 | $169K | +$815K | $985K | 4.2% |
| Year 2 | $174K | +$1.2M | $1.4M | 6.0% |
| Year 3 | $179K | +$1.2M | $1.4M | 6.0% |
| Year 4 | $185K | +$1.2M | $1.4M | 6.1% |
| Year 5 | $190K | +$1.2M | $1.4M | 6.1% |
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 | $232K | $349K | $465K | $558K |
| Denial Rate Reductio | $230K | $345K | $460K | $552K |
| A/R Days Reduction | $141K | $212K | $283K | $339K |
| Clean Claim Rate | $7K | $11K | $15K | $18K |
| Total | $612K | $917K | $1.2M | $1.5M |
Peer Context — Where This Hospital Sits
Key metrics vs 38 size-matched peers. Low percentile on margin/efficiency metrics = more room for improvement = larger bridge opportunity.
| Metric | Hospital | P25 | P50 | P75 | Percentile |
|---|---|---|---|---|---|
| Op Margin | 0.7% | -22.1% | -8.0% | 0.7% | P74 |
| Net-to-Gross | 100.0% | 29.1% | 33.3% | 42.0% | P97 |
| Occupancy | 77.0% | 26.6% | 35.5% | 52.2% | P87 |
| Rev/Bed | $431K | $391K | $813K | $1.4M | P26 |
| Exp/Bed | $428K | $505K | $1.0M | $1.4M | P21 |
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.