Bridge Realization Estimate
ML model predicts what fraction of the bridge is achievable (accuracy: 60%, n=5,839)
Expected realization: 60% of modeled bridge. Strengths: Bed Count, Net-to-Gross Ratio. Risks: Occupancy Rate, Revenue per Bed. Risk-adjusted uplift: $0.7M (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 | $442K | $442K | $0 | 12mo |
| Denial Rate Reduction | 12.0% DEFAULT | 6.5% BENCHMARK | $425K | $12K | $437K | $0 | 12mo |
| A/R Days Reduction | 52.00 DEFAULT | 38.00 BENCHMARK | $68K | $201K | $269K | $847K | 9mo |
| Clean Claim Rate | 88.0% DEFAULT | 96.0% BENCHMARK | $0 | $14K | $14K | $0 | 6mo |
| Net Collection Rate | 93.5% DEFAULT | 40.6% 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 |
|---|---|---|---|---|---|---|---|---|
| Cost to Collect | $0 | $110K | $221K | $331K | $442K | $442K | $442K | $442K |
| Denial Rate Reduction | $0 | $109K | $219K | $328K | $437K | $437K | $437K | $437K |
| A/R Days Reduction | $0 | $90K | $179K | $269K | $269K | $269K | $269K | $269K |
| Clean Claim Rate | $0 | $7K | $14K | $14K | $14K | $14K | $14K | $14K |
| Cumulative | $0 | $316K | $633K | $942K | $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 | 200% / 243.8x | 207% / 271.2x | 213% / 298.6x | 215% / 312.4x | 218% / 326.1x |
| 9.0x | 193% / 216.3x | 199% / 240.7x | 205% / 265.1x | 208% / 277.3x | 211% / 289.5x |
| 10.0x | 187% / 194.3x | 193% / 216.3x | 199% / 238.3x | 202% / 249.2x | 204% / 260.2x |
| 11.0x | 181% / 176.4x | 187% / 196.3x | 193% / 216.3x | 196% / 226.3x | 198% / 236.3x |
| 12.0x | 176% / 161.4x | 182% / 179.7x | 188% / 198.0x | 191% / 207.2x | 193% / 216.3x |
Covenant Headroom (at 10x Entry, 6.5x Max Leverage)
Pro forma EBITDA can decline 96% before the 6.5x covenant trips. RCM uplift reduces leverage from 8.5x to 0.3x, adding 8.2 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 | $36K | — | $36K | 0.2% |
| Year 1 | $37K | +$775K | $811K | 3.7% |
| Year 2 | $38K | +$1.2M | $1.2M | 5.4% |
| Year 3 | $39K | +$1.2M | $1.2M | 5.4% |
| Year 4 | $40K | +$1.2M | $1.2M | 5.4% |
| Year 5 | $41K | +$1.2M | $1.2M | 5.4% |
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 | $221K | $331K | $442K | $530K |
| Denial Rate Reductio | $219K | $328K | $437K | $525K |
| A/R Days Reduction | $134K | $202K | $269K | $323K |
| Clean Claim Rate | $7K | $11K | $14K | $17K |
| Total | $581K | $872K | $1.2M | $1.4M |
Peer Context — Where This Hospital Sits
Key metrics vs 63 size-matched peers. Low percentile on margin/efficiency metrics = more room for improvement = larger bridge opportunity.
| Metric | Hospital | P25 | P50 | P75 | Percentile |
|---|---|---|---|---|---|
| Op Margin | 0.2% | -11.0% | -1.0% | 8.7% | P54 |
| Net-to-Gross | 15.6% | 26.1% | 30.7% | 40.6% | P11 |
| Occupancy | 12.9% | 25.7% | 35.9% | 57.7% | P3 |
| Rev/Bed | $597K | $581K | $852K | $1.4M | P25 |
| Exp/Bed | $596K | $602K | $969K | $1.2M | P24 |
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.