Bridge Realization Estimate
ML model predicts what fraction of the bridge is achievable (accuracy: 60%, n=5,839)
Expected realization: 65% of modeled bridge. Strengths: Revenue per Bed, Bed Count. Risks: Occupancy Rate, Commercial Payer %. Risk-adjusted uplift: $2.2M (vs $3.4M 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 | $1.3M | $1.3M | $0 | 12mo |
| Denial Rate Reduction | 12.0% DEFAULT | 6.5% BENCHMARK | $1.2M | $35K | $1.3M | $0 | 12mo |
| A/R Days Reduction | 52.00 DEFAULT | 38.00 BENCHMARK | $196K | $582K | $778K | $2.5M | 9mo |
| Clean Claim Rate | 88.0% DEFAULT | 96.0% BENCHMARK | $0 | $41K | $41K | $0 | 6mo |
| Net Collection Rate | 93.5% DEFAULT | 60.5% 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 | $320K | $640K | $960K | $1.3M | $1.3M | $1.3M | $1.3M |
| Denial Rate Reduction | $0 | $317K | $633K | $950K | $1.3M | $1.3M | $1.3M | $1.3M |
| A/R Days Reduction | $0 | $259K | $519K | $778K | $778K | $778K | $778K | $778K |
| Clean Claim Rate | $0 | $20K | $41K | $41K | $41K | $41K | $41K | $41K |
| Cumulative | $0 | $917K | $1.8M | $2.7M | $3.4M | $3.4M | $3.4M | $3.4M |
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 $3.4M is added at exit.
| Entry \ Exit | 9.0x | 10.0x | 11.0x | 11.5x | 12.0x |
|---|---|---|---|---|---|
| 8.0x | 60% / 10.4x | 64% / 11.9x | 68% / 13.4x | 70% / 14.2x | 72% / 15.0x |
| 9.0x | 55% / 8.9x | 59% / 10.2x | 63% / 11.6x | 65% / 12.3x | 67% / 12.9x |
| 10.0x | 50% / 7.7x | 55% / 8.9x | 59% / 10.1x | 61% / 10.7x | 62% / 11.3x |
| 11.0x | 46% / 6.7x | 51% / 7.8x | 55% / 8.9x | 57% / 9.4x | 58% / 10.0x |
| 12.0x | 42% / 5.9x | 47% / 6.9x | 51% / 7.9x | 53% / 8.4x | 55% / 8.9x |
Covenant Headroom (at 10x Entry, 6.5x Max Leverage)
Pro forma EBITDA can decline 24% before the 6.5x covenant trips. RCM uplift reduces leverage from 8.5x to 5.0x, adding 3.5 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 | $4.7M | — | $4.7M | 7.4% |
| Year 1 | $4.9M | +$2.2M | $7.1M | 11.1% |
| Year 2 | $5.0M | +$3.4M | $8.4M | 13.1% |
| Year 3 | $5.2M | +$3.4M | $8.6M | 13.4% |
| Year 4 | $5.3M | +$3.4M | $8.7M | 13.6% |
| Year 5 | $5.5M | +$3.4M | $8.9M | 13.9% |
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 | $640K | $960K | $1.3M | $1.5M |
| Denial Rate Reductio | $633K | $950K | $1.3M | $1.5M |
| A/R Days Reduction | $389K | $584K | $778K | $934K |
| Clean Claim Rate | $20K | $31K | $41K | $49K |
| Total | $1.7M | $2.5M | $3.4M | $4.0M |
Peer Context — Where This Hospital Sits
Key metrics vs 122 size-matched peers. Low percentile on margin/efficiency metrics = more room for improvement = larger bridge opportunity.
| Metric | Hospital | P25 | P50 | P75 | Percentile |
|---|---|---|---|---|---|
| Op Margin | 7.4% | -14.8% | -2.1% | 6.6% | P77 |
| Net-to-Gross | 16.9% | 33.7% | 46.2% | 60.5% | P3 |
| Occupancy | 23.3% | 21.1% | 46.4% | 69.9% | P29 |
| Rev/Bed | $3.0M | $288K | $466K | $885K | P97 |
| Exp/Bed | $2.8M | $272K | $468K | $963K | P98 |
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.