Bridge Realization Estimate
ML model predicts what fraction of the bridge is achievable (accuracy: 60%, n=5,839)
Expected realization: 55% of modeled bridge. Strengths: Payer Diversity, Bed Count. Risks: Occupancy Rate, Commercial Payer %. Risk-adjusted uplift: $0.3M (vs $0.6M 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 | $234K | $234K | $0 | 12mo |
| Denial Rate Reduction | 12.0% DEFAULT | 6.5% BENCHMARK | $225K | $8K | $234K | $0 | 12mo |
| A/R Days Reduction | 52.00 DEFAULT | 38.00 BENCHMARK | $36K | $107K | $142K | $449K | 9mo |
| Clean Claim Rate | 88.0% DEFAULT | 96.0% BENCHMARK | $0 | $10K | $10K | $0 | 6mo |
| Net Collection Rate | 93.5% DEFAULT | 61.4% 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 | $59K | $117K | $176K | $234K | $234K | $234K | $234K |
| Denial Rate Reduction | $0 | $58K | $117K | $175K | $234K | $234K | $234K | $234K |
| A/R Days Reduction | $0 | $47K | $95K | $142K | $142K | $142K | $142K | $142K |
| Clean Claim Rate | $0 | $5K | $10K | $10K | $10K | $10K | $10K | $10K |
| Cumulative | $0 | $169K | $339K | $503K | $620K | $620K | $620K | $620K |
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 $620K is added at exit.
| Entry \ Exit | 9.0x | 10.0x | 11.0x | 11.5x | 12.0x |
|---|---|---|---|---|---|
| 8.0x | 47% / 6.8x | 51% / 8.0x | 55% / 9.1x | 57% / 9.6x | 59% / 10.2x |
| 9.0x | 42% / 5.7x | 46% / 6.7x | 50% / 7.7x | 52% / 8.2x | 54% / 8.7x |
| 10.0x | 37% / 4.8x | 42% / 5.7x | 46% / 6.6x | 48% / 7.1x | 50% / 7.5x |
| 11.0x | 32% / 4.1x | 37% / 4.9x | 42% / 5.7x | 44% / 6.1x | 46% / 6.5x |
| 12.0x | 28% / 3.5x | 33% / 4.2x | 38% / 5.0x | 40% / 5.3x | 42% / 5.7x |
Covenant Headroom (at 10x Entry, 6.5x Max Leverage)
Pro forma EBITDA can decline -7% before the 6.5x covenant trips. RCM uplift reduces leverage from 8.5x to 6.9x, adding 1.5 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 | $2.8M | — | $2.8M | 24.2% |
| Year 1 | $2.9M | +$413K | $3.3M | 28.4% |
| Year 2 | $3.0M | +$620K | $3.6M | 30.9% |
| Year 3 | $3.1M | +$620K | $3.7M | 31.7% |
| Year 4 | $3.2M | +$620K | $3.8M | 32.5% |
| Year 5 | $3.3M | +$620K | $3.9M | 33.3% |
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 | $117K | $176K | $234K | $281K |
| Denial Rate Reductio | $117K | $175K | $234K | $280K |
| A/R Days Reduction | $71K | $107K | $142K | $171K |
| Clean Claim Rate | $5K | $7K | $10K | $12K |
| Total | $310K | $465K | $620K | $744K |
Peer Context — Where This Hospital Sits
Key metrics vs 89 size-matched peers. Low percentile on margin/efficiency metrics = more room for improvement = larger bridge opportunity.
| Metric | Hospital | P25 | P50 | P75 | Percentile |
|---|---|---|---|---|---|
| Op Margin | 24.2% | -13.9% | -1.7% | 8.4% | P93 |
| Net-to-Gross | 80.7% | 34.2% | 48.6% | 61.4% | P90 |
| Occupancy | 0.1% | 20.5% | 45.1% | 65.4% | P0 |
| Rev/Bed | $781K | $335K | $658K | $1.1M | P61 |
| Exp/Bed | $592K | $295K | $602K | $1.2M | P47 |
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.