Bridge Realization Estimate
ML model predicts what fraction of the bridge is achievable (accuracy: 60%, n=5,839)
Expected realization: 74% of modeled bridge. Strengths: Occupancy Rate. Risks: Revenue per Bed, Commercial Payer %. Risk-adjusted uplift: $1.1M (vs $1.4M 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 |
|---|---|---|---|---|---|---|---|
| Cost to Collect | 4.5% DEFAULT | 2.5% BENCHMARK | $0 | $545K | $545K | $0 | 12mo |
| Denial Rate Reduction | 12.0% DEFAULT | 6.5% BENCHMARK | $524K | $15K | $539K | $0 | 12mo |
| A/R Days Reduction | 52.00 DEFAULT | 38.00 BENCHMARK | $84K | $248K | $331K | $1.0M | 9mo |
| Clean Claim Rate | 88.0% DEFAULT | 96.0% BENCHMARK | $0 | $17K | $17K | $0 | 6mo |
| Net Collection Rate | 93.5% DEFAULT | 39.1% 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 | $136K | $272K | $409K | $545K | $545K | $545K | $545K |
| Denial Rate Reduction | $0 | $135K | $270K | $404K | $539K | $539K | $539K | $539K |
| A/R Days Reduction | $0 | $110K | $221K | $331K | $331K | $331K | $331K | $331K |
| Clean Claim Rate | $0 | $9K | $17K | $17K | $17K | $17K | $17K | $17K |
| Cumulative | $0 | $390K | $780K | $1.2M | $1.4M | $1.4M | $1.4M | $1.4M |
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 $1.4M is added at exit.
| Entry \ Exit | 9.0x | 10.0x | 11.0x | 11.5x | 12.0x |
|---|---|---|---|---|---|
| 8.0x | 92% / 25.9x | 96% / 29.1x | 100% / 32.4x | 102% / 34.0x | 104% / 35.6x |
| 9.0x | 87% / 22.6x | 91% / 25.5x | 95% / 28.4x | 97% / 29.8x | 99% / 31.3x |
| 10.0x | 82% / 20.1x | 87% / 22.6x | 91% / 25.2x | 93% / 26.5x | 94% / 27.8x |
| 11.0x | 78% / 17.9x | 83% / 20.3x | 87% / 22.6x | 89% / 23.8x | 90% / 25.0x |
| 12.0x | 74% / 16.2x | 79% / 18.3x | 83% / 20.5x | 85% / 21.6x | 87% / 22.6x |
Covenant Headroom (at 10x Entry, 6.5x Max Leverage)
Pro forma EBITDA can decline 66% before the 6.5x covenant trips. RCM uplift reduces leverage from 8.5x to 2.2x, adding 6.2 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 | $507K | — | $507K | 1.9% |
| Year 1 | $522K | +$955K | $1.5M | 5.4% |
| Year 2 | $538K | +$1.4M | $2.0M | 7.2% |
| Year 3 | $554K | +$1.4M | $2.0M | 7.3% |
| Year 4 | $571K | +$1.4M | $2.0M | 7.4% |
| Year 5 | $588K | +$1.4M | $2.0M | 7.4% |
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 | $272K | $409K | $545K | $654K |
| Denial Rate Reductio | $270K | $404K | $539K | $647K |
| A/R Days Reduction | $166K | $249K | $331K | $398K |
| Clean Claim Rate | $9K | $13K | $17K | $21K |
| Total | $716K | $1.1M | $1.4M | $1.7M |
Peer Context — Where This Hospital Sits
Key metrics vs 34 size-matched peers. Low percentile on margin/efficiency metrics = more room for improvement = larger bridge opportunity.
| Metric | Hospital | P25 | P50 | P75 | Percentile |
|---|---|---|---|---|---|
| Op Margin | 1.9% | -18.8% | -7.0% | 0.7% | P79 |
| Net-to-Gross | 30.9% | 24.3% | 31.9% | 39.1% | P44 |
| Occupancy | 88.1% | 29.8% | 42.9% | 56.0% | P97 |
| Rev/Bed | $378K | $369K | $819K | $1.4M | P26 |
| Exp/Bed | $371K | $447K | $1.0M | $1.3M | P18 |
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.