Bridge Realization Estimate
ML model predicts what fraction of the bridge is achievable (accuracy: 60%, n=5,839)
Expected realization: 61% of modeled bridge. Strengths: Bed Count. Risks: Occupancy Rate, Net-to-Gross Ratio. Risk-adjusted uplift: $0.7M (vs $1.1M 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 | $408K | $408K | $0 | 12mo |
| Denial Rate Reduction | 12.0% DEFAULT | 6.5% BENCHMARK | $393K | $11K | $404K | $0 | 12mo |
| A/R Days Reduction | 52.00 DEFAULT | 38.00 BENCHMARK | $63K | $186K | $248K | $783K | 9mo |
| Clean Claim Rate | 88.0% DEFAULT | 96.0% BENCHMARK | $0 | $13K | $13K | $0 | 6mo |
| Net Collection Rate | 93.5% DEFAULT | 59.6% 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 | $102K | $204K | $306K | $408K | $408K | $408K | $408K |
| Denial Rate Reduction | $0 | $101K | $202K | $303K | $404K | $404K | $404K | $404K |
| A/R Days Reduction | $0 | $83K | $166K | $248K | $248K | $248K | $248K | $248K |
| Clean Claim Rate | $0 | $7K | $13K | $13K | $13K | $13K | $13K | $13K |
| Cumulative | $0 | $292K | $585K | $871K | $1.1M | $1.1M | $1.1M | $1.1M |
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 $1.1M is added at exit.
| Entry \ Exit | 9.0x | 10.0x | 11.0x | 11.5x | 12.0x |
|---|---|---|---|---|---|
| 8.0x | 86% / 22.4x | 91% / 25.2x | 95% / 28.0x | 97% / 29.5x | 99% / 30.9x |
| 9.0x | 81% / 19.5x | 86% / 22.0x | 90% / 24.6x | 92% / 25.8x | 93% / 27.1x |
| 10.0x | 77% / 17.2x | 81% / 19.5x | 85% / 21.8x | 87% / 22.9x | 89% / 24.1x |
| 11.0x | 73% / 15.4x | 77% / 17.4x | 81% / 19.5x | 83% / 20.5x | 85% / 21.6x |
| 12.0x | 69% / 13.8x | 73% / 15.7x | 77% / 17.6x | 79% / 18.6x | 81% / 19.5x |
Covenant Headroom (at 10x Entry, 6.5x Max Leverage)
Pro forma EBITDA can decline 61% before the 6.5x covenant trips. RCM uplift reduces leverage from 8.5x to 2.5x, adding 5.9 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 | $459K | — | $459K | 2.2% |
| Year 1 | $473K | +$716K | $1.2M | 5.8% |
| Year 2 | $487K | +$1.1M | $1.6M | 7.6% |
| Year 3 | $501K | +$1.1M | $1.6M | 7.7% |
| Year 4 | $516K | +$1.1M | $1.6M | 7.8% |
| Year 5 | $532K | +$1.1M | $1.6M | 7.9% |
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 | $204K | $306K | $408K | $490K |
| Denial Rate Reductio | $202K | $303K | $404K | $485K |
| A/R Days Reduction | $124K | $186K | $248K | $298K |
| Clean Claim Rate | $7K | $10K | $13K | $16K |
| Total | $537K | $806K | $1.1M | $1.3M |
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 | 2.2% | -15.4% | -2.3% | 7.2% | P58 |
| Net-to-Gross | 67.4% | 32.3% | 45.9% | 59.6% | P86 |
| Occupancy | 20.4% | 20.5% | 46.1% | 69.5% | P25 |
| Rev/Bed | $1.0M | $290K | $537K | $964K | P78 |
| Exp/Bed | $998K | $277K | $514K | $985K | P75 |
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.