Bridge Realization Estimate
ML model predicts what fraction of the bridge is achievable (accuracy: 60%, n=5,839)
Expected realization: 59% of modeled bridge. Strengths: Bed Count, Payer Diversity. Risks: Occupancy Rate, Commercial Payer %. Risk-adjusted uplift: $0.9M (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 | $605K | $605K | $0 | 12mo |
| Denial Rate Reduction | 12.0% DEFAULT | 6.5% BENCHMARK | $583K | $17K | $599K | $0 | 12mo |
| A/R Days Reduction | 52.00 DEFAULT | 38.00 BENCHMARK | $93K | $275K | $368K | $1.2M | 9mo |
| Clean Claim Rate | 88.0% DEFAULT | 96.0% BENCHMARK | $0 | $19K | $19K | $0 | 6mo |
| Net Collection Rate | 93.5% DEFAULT | 56.1% 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 | $151K | $303K | $454K | $605K | $605K | $605K | $605K |
| Denial Rate Reduction | $0 | $150K | $300K | $449K | $599K | $599K | $599K | $599K |
| A/R Days Reduction | $0 | $123K | $246K | $368K | $368K | $368K | $368K | $368K |
| Clean Claim Rate | $0 | $10K | $19K | $19K | $19K | $19K | $19K | $19K |
| Cumulative | $0 | $434K | $867K | $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 | 171% / 147.3x | 177% / 164.1x | 183% / 180.8x | 185% / 189.2x | 188% / 197.6x |
| 9.0x | 165% / 130.6x | 171% / 145.5x | 176% / 160.4x | 179% / 167.8x | 181% / 175.2x |
| 10.0x | 159% / 117.2x | 165% / 130.6x | 170% / 144.0x | 173% / 150.7x | 175% / 157.4x |
| 11.0x | 154% / 106.3x | 160% / 118.5x | 165% / 130.6x | 167% / 136.7x | 170% / 142.8x |
| 12.0x | 150% / 97.2x | 155% / 108.3x | 160% / 119.5x | 163% / 125.0x | 165% / 130.6x |
Covenant Headroom (at 10x Entry, 6.5x Max Leverage)
Pro forma EBITDA can decline 94% before the 6.5x covenant trips. RCM uplift reduces leverage from 8.5x to 0.4x, adding 8.0 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 | $82K | — | $82K | 0.3% |
| Year 1 | $84K | +$1.1M | $1.1M | 3.8% |
| Year 2 | $87K | +$1.6M | $1.7M | 5.5% |
| Year 3 | $90K | +$1.6M | $1.7M | 5.6% |
| Year 4 | $92K | +$1.6M | $1.7M | 5.6% |
| Year 5 | $95K | +$1.6M | $1.7M | 5.6% |
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 | $303K | $454K | $605K | $726K |
| Denial Rate Reductio | $300K | $449K | $599K | $719K |
| A/R Days Reduction | $184K | $276K | $368K | $442K |
| Clean Claim Rate | $10K | $15K | $19K | $23K |
| Total | $796K | $1.2M | $1.6M | $1.9M |
Peer Context — Where This Hospital Sits
Key metrics vs 126 size-matched peers. Low percentile on margin/efficiency metrics = more room for improvement = larger bridge opportunity.
| Metric | Hospital | P25 | P50 | P75 | Percentile |
|---|---|---|---|---|---|
| Op Margin | 0.3% | -21.2% | -3.8% | 4.9% | P59 |
| Net-to-Gross | 17.3% | 31.5% | 42.0% | 56.1% | P5 |
| Occupancy | 12.8% | 21.3% | 46.5% | 65.1% | P10 |
| Rev/Bed | $776K | $273K | $435K | $868K | P72 |
| Exp/Bed | $774K | $261K | $442K | $965K | P63 |
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.