Bridge Realization Estimate
ML model predicts what fraction of the bridge is achievable (accuracy: 60%, n=5,839)
Expected realization: 67% of modeled bridge. Strengths: Bed Count. Risks: Revenue per Bed. Risk-adjusted uplift: $0.8M (vs $1.1M 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 | $426K | $426K | $0 | 12mo |
| Denial Rate Reduction | 12.0% DEFAULT | 6.5% BENCHMARK | $410K | $12K | $422K | $0 | 12mo |
| A/R Days Reduction | 52.00 DEFAULT | 38.00 BENCHMARK | $65K | $194K | $259K | $817K | 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 | $106K | $213K | $319K | $426K | $426K | $426K | $426K |
| Denial Rate Reduction | $0 | $105K | $211K | $316K | $422K | $422K | $422K | $422K |
| A/R Days Reduction | $0 | $86K | $173K | $259K | $259K | $259K | $259K | $259K |
| Clean Claim Rate | $0 | $7K | $14K | $14K | $14K | $14K | $14K | $14K |
| Cumulative | $0 | $305K | $610K | $908K | $1.1M | $1.1M | $1.1M | $1.1M |
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 $1.1M is added at exit.
| Entry \ Exit | 9.0x | 10.0x | 11.0x | 11.5x | 12.0x |
|---|---|---|---|---|---|
| 8.0x | 53% / 8.4x | 57% / 9.7x | 61% / 10.9x | 63% / 11.6x | 65% / 12.2x |
| 9.0x | 48% / 7.1x | 52% / 8.2x | 56% / 9.4x | 58% / 9.9x | 60% / 10.5x |
| 10.0x | 43% / 6.0x | 48% / 7.1x | 52% / 8.1x | 54% / 8.6x | 56% / 9.1x |
| 11.0x | 39% / 5.2x | 44% / 6.1x | 48% / 7.1x | 50% / 7.5x | 52% / 8.0x |
| 12.0x | 35% / 4.5x | 40% / 5.4x | 44% / 6.2x | 46% / 6.7x | 48% / 7.1x |
Covenant Headroom (at 10x Entry, 6.5x Max Leverage)
Pro forma EBITDA can decline 9% before the 6.5x covenant trips. RCM uplift reduces leverage from 8.5x to 5.9x, adding 2.5 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 | $2.6M | — | $2.6M | 12.3% |
| Year 1 | $2.7M | +$747K | $3.4M | 16.1% |
| Year 2 | $2.8M | +$1.1M | $3.9M | 18.3% |
| Year 3 | $2.9M | +$1.1M | $4.0M | 18.7% |
| Year 4 | $2.9M | +$1.1M | $4.1M | 19.1% |
| Year 5 | $3.0M | +$1.1M | $4.1M | 19.5% |
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 | $213K | $319K | $426K | $511K |
| Denial Rate Reductio | $211K | $316K | $422K | $506K |
| A/R Days Reduction | $130K | $194K | $259K | $311K |
| Clean Claim Rate | $7K | $10K | $14K | $16K |
| Total | $560K | $840K | $1.1M | $1.3M |
Peer Context — Where This Hospital Sits
Key metrics vs 55 size-matched peers. Low percentile on margin/efficiency metrics = more room for improvement = larger bridge opportunity.
| Metric | Hospital | P25 | P50 | P75 | Percentile |
|---|---|---|---|---|---|
| Op Margin | 12.3% | -11.0% | -2.3% | 6.7% | P84 |
| Net-to-Gross | 27.8% | 27.7% | 32.3% | 40.6% | P25 |
| Occupancy | 51.0% | 25.7% | 35.6% | 51.3% | P73 |
| Rev/Bed | $852K | $610K | $868K | $1.4M | P47 |
| Exp/Bed | $747K | $662K | $1.0M | $1.2M | P29 |
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.