Bridge Realization Estimate
ML model predicts what fraction of the bridge is achievable (accuracy: 60%, n=5,839)
Expected realization: 72% of modeled bridge. Strengths: Occupancy Rate, Bed Count. Risks: Revenue per Bed. Risk-adjusted uplift: $0.5M (vs $0.7M 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 | $259K | $259K | $0 | 12mo |
| Denial Rate Reduction | 12.0% DEFAULT | 6.5% BENCHMARK | $250K | $8K | $258K | $0 | 12mo |
| A/R Days Reduction | 52.00 DEFAULT | 38.00 BENCHMARK | $40K | $118K | $158K | $498K | 9mo |
| Clean Claim Rate | 88.0% DEFAULT | 96.0% BENCHMARK | $0 | $10K | $10K | $0 | 6mo |
| Net Collection Rate | 93.5% DEFAULT | 58.1% 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 | $65K | $130K | $195K | $259K | $259K | $259K | $259K |
| Denial Rate Reduction | $0 | $64K | $129K | $193K | $258K | $258K | $258K | $258K |
| A/R Days Reduction | $0 | $53K | $105K | $158K | $158K | $158K | $158K | $158K |
| Clean Claim Rate | $0 | $5K | $10K | $10K | $10K | $10K | $10K | $10K |
| Cumulative | $0 | $187K | $374K | $556K | $685K | $685K | $685K | $685K |
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 $685K is added at exit.
| Entry \ Exit | 9.0x | 10.0x | 11.0x | 11.5x | 12.0x |
|---|---|---|---|---|---|
| 8.0x | 74% / 16.2x | 79% / 18.3x | 83% / 20.5x | 85% / 21.6x | 87% / 22.6x |
| 9.0x | 70% / 14.0x | 74% / 15.9x | 78% / 17.9x | 80% / 18.8x | 82% / 19.8x |
| 10.0x | 65% / 12.3x | 70% / 14.0x | 74% / 15.7x | 75% / 16.6x | 77% / 17.5x |
| 11.0x | 61% / 10.9x | 66% / 12.4x | 70% / 14.0x | 71% / 14.8x | 73% / 15.6x |
| 12.0x | 58% / 9.7x | 62% / 11.1x | 66% / 12.6x | 68% / 13.3x | 70% / 14.0x |
Covenant Headroom (at 10x Entry, 6.5x Max Leverage)
Pro forma EBITDA can decline 48% before the 6.5x covenant trips. RCM uplift reduces leverage from 8.5x to 3.4x, adding 5.1 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 | $458K | — | $458K | 3.5% |
| Year 1 | $472K | +$457K | $928K | 7.2% |
| Year 2 | $486K | +$685K | $1.2M | 9.0% |
| Year 3 | $500K | +$685K | $1.2M | 9.1% |
| Year 4 | $515K | +$685K | $1.2M | 9.3% |
| Year 5 | $531K | +$685K | $1.2M | 9.4% |
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 | $130K | $195K | $259K | $311K |
| Denial Rate Reductio | $129K | $193K | $258K | $310K |
| A/R Days Reduction | $79K | $118K | $158K | $189K |
| Clean Claim Rate | $5K | $7K | $10K | $12K |
| Total | $342K | $514K | $685K | $822K |
Peer Context — Where This Hospital Sits
Key metrics vs 136 size-matched peers. Low percentile on margin/efficiency metrics = more room for improvement = larger bridge opportunity.
| Metric | Hospital | P25 | P50 | P75 | Percentile |
|---|---|---|---|---|---|
| Op Margin | 3.5% | -16.7% | -3.3% | 5.7% | P68 |
| Net-to-Gross | 18.3% | 31.8% | 44.1% | 58.1% | P6 |
| Occupancy | 72.4% | 21.1% | 46.4% | 69.1% | P79 |
| Rev/Bed | $463K | $288K | $466K | $882K | P49 |
| Exp/Bed | $447K | $276K | $468K | $963K | P49 |
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.