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. Risks: Occupancy Rate, Commercial Payer %. Risk-adjusted uplift: $1.0M (vs $1.7M 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 | $651K | $651K | $0 | 12mo |
| Denial Rate Reduction | 12.0% DEFAULT | 6.5% BENCHMARK | $627K | $18K | $645K | $0 | 12mo |
| A/R Days Reduction | 52.00 DEFAULT | 38.00 BENCHMARK | $100K | $296K | $396K | $1.2M | 9mo |
| Clean Claim Rate | 88.0% DEFAULT | 96.0% BENCHMARK | $0 | $21K | $21K | $0 | 6mo |
| Net Collection Rate | 93.5% DEFAULT | 56.4% 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 | $163K | $326K | $488K | $651K | $651K | $651K | $651K |
| Denial Rate Reduction | $0 | $161K | $322K | $484K | $645K | $645K | $645K | $645K |
| A/R Days Reduction | $0 | $132K | $264K | $396K | $396K | $396K | $396K | $396K |
| Clean Claim Rate | $0 | $10K | $21K | $21K | $21K | $21K | $21K | $21K |
| Cumulative | $0 | $467K | $933K | $1.4M | $1.7M | $1.7M | $1.7M | $1.7M |
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 $1.7M is added at exit.
| Entry \ Exit | 9.0x | 10.0x | 11.0x | 11.5x | 12.0x |
|---|---|---|---|---|---|
| 8.0x | 88% / 23.2x | 92% / 26.1x | 96% / 29.1x | 98% / 30.5x | 100% / 32.0x |
| 9.0x | 83% / 20.2x | 87% / 22.9x | 91% / 25.5x | 93% / 26.8x | 95% / 28.1x |
| 10.0x | 78% / 17.9x | 83% / 20.2x | 87% / 22.6x | 88% / 23.8x | 90% / 24.9x |
| 11.0x | 74% / 16.0x | 78% / 18.1x | 83% / 20.2x | 84% / 21.3x | 86% / 22.4x |
| 12.0x | 70% / 14.4x | 75% / 16.3x | 79% / 18.3x | 81% / 19.3x | 83% / 20.2x |
Covenant Headroom (at 10x Entry, 6.5x Max Leverage)
Pro forma EBITDA can decline 62% before the 6.5x covenant trips. RCM uplift reduces leverage from 8.5x to 2.4x, adding 6.0 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 | $697K | — | $697K | 2.1% |
| Year 1 | $718K | +$1.1M | $1.9M | 5.7% |
| Year 2 | $740K | +$1.7M | $2.5M | 7.5% |
| Year 3 | $762K | +$1.7M | $2.5M | 7.6% |
| Year 4 | $785K | +$1.7M | $2.5M | 7.7% |
| Year 5 | $809K | +$1.7M | $2.5M | 7.7% |
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 | $326K | $488K | $651K | $782K |
| Denial Rate Reductio | $322K | $484K | $645K | $774K |
| A/R Days Reduction | $198K | $297K | $396K | $475K |
| Clean Claim Rate | $10K | $16K | $21K | $25K |
| Total | $857K | $1.3M | $1.7M | $2.1M |
Peer Context — Where This Hospital Sits
Key metrics vs 127 size-matched peers. Low percentile on margin/efficiency metrics = more room for improvement = larger bridge opportunity.
| Metric | Hospital | P25 | P50 | P75 | Percentile |
|---|---|---|---|---|---|
| Op Margin | 2.1% | -21.2% | -4.1% | 4.8% | P61 |
| Net-to-Gross | 20.2% | 31.6% | 42.9% | 56.4% | P9 |
| Occupancy | 18.0% | 21.5% | 46.4% | 64.9% | P18 |
| Rev/Bed | $880K | $277K | $445K | $856K | P75 |
| Exp/Bed | $861K | $269K | $447K | $965K | P68 |
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.