Bridge Realization Estimate
ML model predicts what fraction of the bridge is achievable (accuracy: 60%, n=5,839)
Expected realization: 66% of modeled bridge. Strengths: Occupancy Rate, Payer Diversity. Risks: Commercial Payer %, Revenue per Bed. Risk-adjusted uplift: $1.1M (vs $1.6M 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 | $610K | $610K | $0 | 12mo |
| Denial Rate Reduction | 12.0% DEFAULT | 6.5% BENCHMARK | $587K | $17K | $604K | $0 | 12mo |
| A/R Days Reduction | 52.00 DEFAULT | 38.00 BENCHMARK | $94K | $278K | $371K | $1.2M | 9mo |
| Clean Claim Rate | 88.0% DEFAULT | 96.0% BENCHMARK | $0 | $20K | $20K | $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 | $152K | $305K | $457K | $610K | $610K | $610K | $610K |
| Denial Rate Reduction | $0 | $151K | $302K | $453K | $604K | $604K | $604K | $604K |
| A/R Days Reduction | $0 | $124K | $247K | $371K | $371K | $371K | $371K | $371K |
| Clean Claim Rate | $0 | $10K | $20K | $20K | $20K | $20K | $20K | $20K |
| Cumulative | $0 | $437K | $874K | $1.3M | $1.6M | $1.6M | $1.6M | $1.6M |
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 $1.6M is added at exit.
| Entry \ Exit | 9.0x | 10.0x | 11.0x | 11.5x | 12.0x |
|---|---|---|---|---|---|
| 8.0x | 44% / 6.3x | 49% / 7.3x | 53% / 8.4x | 55% / 8.9x | 57% / 9.4x |
| 9.0x | 39% / 5.2x | 44% / 6.2x | 48% / 7.1x | 50% / 7.6x | 52% / 8.0x |
| 10.0x | 34% / 4.4x | 39% / 5.2x | 43% / 6.0x | 45% / 6.5x | 47% / 6.9x |
| 11.0x | 30% / 3.7x | 35% / 4.4x | 39% / 5.2x | 41% / 5.6x | 43% / 6.0x |
| 12.0x | 25% / 3.1x | 31% / 3.8x | 35% / 4.5x | 37% / 4.9x | 39% / 5.2x |
Covenant Headroom (at 10x Entry, 6.5x Max Leverage)
Pro forma EBITDA can decline -14% before the 6.5x covenant trips. RCM uplift reduces leverage from 8.5x to 7.4x, adding 1.0 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 | $11.3M | — | $11.3M | 37.2% |
| Year 1 | $11.7M | +$1.1M | $12.7M | 41.8% |
| Year 2 | $12.0M | +$1.6M | $13.6M | 44.7% |
| Year 3 | $12.4M | +$1.6M | $14.0M | 45.9% |
| Year 4 | $12.8M | +$1.6M | $14.4M | 47.1% |
| Year 5 | $13.1M | +$1.6M | $14.7M | 48.3% |
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 | $305K | $457K | $610K | $732K |
| Denial Rate Reductio | $302K | $453K | $604K | $725K |
| A/R Days Reduction | $186K | $278K | $371K | $445K |
| Clean Claim Rate | $10K | $15K | $20K | $23K |
| Total | $802K | $1.2M | $1.6M | $1.9M |
Peer Context — Where This Hospital Sits
Key metrics vs 48 size-matched peers. Low percentile on margin/efficiency metrics = more room for improvement = larger bridge opportunity.
| Metric | Hospital | P25 | P50 | P75 | Percentile |
|---|---|---|---|---|---|
| Op Margin | 37.2% | -11.7% | -3.5% | 10.3% | P92 |
| Net-to-Gross | 74.9% | 18.6% | 29.0% | 34.7% | P96 |
| Occupancy | 60.1% | 26.3% | 49.0% | 63.0% | P69 |
| Rev/Bed | $347K | $401K | $880K | $1.4M | P19 |
| Exp/Bed | $218K | $411K | $870K | $1.5M | P8 |
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.