Bridge Realization Estimate
ML model predicts what fraction of the bridge is achievable (accuracy: 60%, n=5,839)
Expected realization: 72% of modeled bridge. Strengths: Occupancy Rate, Payer Diversity. Risks: Revenue per Bed, Commercial Payer %. Risk-adjusted uplift: $1.1M (vs $1.5M 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 | $576K | $576K | $0 | 12mo |
| Denial Rate Reduction | 12.0% DEFAULT | 6.5% BENCHMARK | $554K | $16K | $570K | $0 | 12mo |
| A/R Days Reduction | 52.00 DEFAULT | 38.00 BENCHMARK | $88K | $262K | $350K | $1.1M | 9mo |
| Clean Claim Rate | 88.0% DEFAULT | 96.0% BENCHMARK | $0 | $18K | $18K | $0 | 6mo |
| Net Collection Rate | 93.5% DEFAULT | 34.7% 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 | $144K | $288K | $432K | $576K | $576K | $576K | $576K |
| Denial Rate Reduction | $0 | $143K | $285K | $428K | $570K | $570K | $570K | $570K |
| A/R Days Reduction | $0 | $117K | $234K | $350K | $350K | $350K | $350K | $350K |
| Clean Claim Rate | $0 | $9K | $18K | $18K | $18K | $18K | $18K | $18K |
| Cumulative | $0 | $413K | $825K | $1.2M | $1.5M | $1.5M | $1.5M | $1.5M |
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 $1.5M is added at exit.
| Entry \ Exit | 9.0x | 10.0x | 11.0x | 11.5x | 12.0x |
|---|---|---|---|---|---|
| 8.0x | 59% / 10.0x | 63% / 11.5x | 67% / 13.0x | 69% / 13.7x | 71% / 14.5x |
| 9.0x | 54% / 8.6x | 58% / 9.9x | 62% / 11.2x | 64% / 11.8x | 66% / 12.5x |
| 10.0x | 49% / 7.4x | 54% / 8.6x | 58% / 9.7x | 60% / 10.3x | 61% / 10.9x |
| 11.0x | 45% / 6.4x | 50% / 7.5x | 54% / 8.6x | 56% / 9.1x | 57% / 9.6x |
| 12.0x | 41% / 5.6x | 46% / 6.6x | 50% / 7.6x | 52% / 8.1x | 54% / 8.6x |
Covenant Headroom (at 10x Entry, 6.5x Max Leverage)
Pro forma EBITDA can decline 21% before the 6.5x covenant trips. RCM uplift reduces leverage from 8.5x to 5.1x, adding 3.4 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 | $2.3M | — | $2.3M | 8.0% |
| Year 1 | $2.4M | +$1.0M | $3.4M | 11.7% |
| Year 2 | $2.4M | +$1.5M | $4.0M | 13.7% |
| Year 3 | $2.5M | +$1.5M | $4.0M | 14.0% |
| Year 4 | $2.6M | +$1.5M | $4.1M | 14.3% |
| Year 5 | $2.7M | +$1.5M | $4.2M | 14.5% |
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 | $288K | $432K | $576K | $691K |
| Denial Rate Reductio | $285K | $428K | $570K | $684K |
| A/R Days Reduction | $175K | $263K | $350K | $420K |
| Clean Claim Rate | $9K | $14K | $18K | $22K |
| Total | $757K | $1.1M | $1.5M | $1.8M |
Peer Context — Where This Hospital Sits
Key metrics vs 36 size-matched peers. Low percentile on margin/efficiency metrics = more room for improvement = larger bridge opportunity.
| Metric | Hospital | P25 | P50 | P75 | Percentile |
|---|---|---|---|---|---|
| Op Margin | -50.0% | -9.8% | -0.2% | 8.0% | P0 |
| Net-to-Gross | 43.9% | 18.3% | 30.2% | 34.7% | P78 |
| Occupancy | 87.7% | 46.0% | 53.8% | 62.6% | P94 |
| Rev/Bed | $177K | $521K | $1.3M | $1.6M | P0 |
| Exp/Bed | $417K | $641K | $1.3M | $1.5M | P17 |
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.