Bridge Realization Estimate
ML model predicts what fraction of the bridge is achievable (accuracy: 60%, n=5,839)
Expected realization: 63% of modeled bridge. Strengths: Commercial Payer %, Bed Count. Risks: Occupancy Rate, Revenue per Bed. Risk-adjusted uplift: $0.1M (vs $0.2M 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 |
|---|---|---|---|---|---|---|---|
| Denial Rate Reduction | 12.0% DEFAULT | 6.5% BENCHMARK | $51K | $8K | $59K | $0 | 12mo |
| Cost to Collect | 4.5% DEFAULT | 2.5% BENCHMARK | $0 | $53K | $53K | $0 | 12mo |
| A/R Days Reduction | 52.00 DEFAULT | 38.00 BENCHMARK | $8K | $24K | $32K | $101K | 9mo |
| Clean Claim Rate | 88.0% DEFAULT | 96.0% BENCHMARK | $0 | $10K | $10K | $0 | 6mo |
| Net Collection Rate | 93.5% DEFAULT | 60.5% 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 |
|---|---|---|---|---|---|---|---|---|
| Denial Rate Reduction | $0 | $15K | $30K | $44K | $59K | $59K | $59K | $59K |
| Cost to Collect | $0 | $13K | $26K | $40K | $53K | $53K | $53K | $53K |
| A/R Days Reduction | $0 | $11K | $21K | $32K | $32K | $32K | $32K | $32K |
| Clean Claim Rate | $0 | $5K | $10K | $10K | $10K | $10K | $10K | $10K |
| Cumulative | $0 | $43K | $87K | $126K | $153K | $153K | $153K | $153K |
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 $153K is added at exit.
| Entry \ Exit | 9.0x | 10.0x | 11.0x | 11.5x | 12.0x |
|---|---|---|---|---|---|
| 8.0x | 84% / 21.2x | 89% / 23.9x | 93% / 26.6x | 95% / 27.9x | 96% / 29.3x |
| 9.0x | 79% / 18.4x | 84% / 20.9x | 88% / 23.3x | 90% / 24.5x | 91% / 25.7x |
| 10.0x | 75% / 16.3x | 79% / 18.4x | 83% / 20.6x | 85% / 21.7x | 87% / 22.8x |
| 11.0x | 71% / 14.5x | 75% / 16.5x | 79% / 18.4x | 81% / 19.4x | 83% / 20.4x |
| 12.0x | 67% / 13.0x | 71% / 14.8x | 75% / 16.6x | 77% / 17.6x | 79% / 18.4x |
Covenant Headroom (at 10x Entry, 6.5x Max Leverage)
Pro forma EBITDA can decline 59% before the 6.5x covenant trips. RCM uplift reduces leverage from 8.5x to 2.7x, adding 5.8 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 | $70K | — | $70K | 2.7% |
| Year 1 | $73K | +$102K | $175K | 6.6% |
| Year 2 | $75K | +$153K | $228K | 8.7% |
| Year 3 | $77K | +$153K | $230K | 8.7% |
| Year 4 | $79K | +$153K | $233K | 8.8% |
| Year 5 | $82K | +$153K | $235K | 8.9% |
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% |
|---|---|---|---|---|
| Denial Rate Reductio | $30K | $44K | $59K | $71K |
| Cost to Collect | $26K | $40K | $53K | $63K |
| A/R Days Reduction | $16K | $24K | $32K | $39K |
| Clean Claim Rate | $5K | $7K | $10K | $12K |
| Total | $77K | $115K | $153K | $184K |
Peer Context — Where This Hospital Sits
Key metrics vs 122 size-matched peers. Low percentile on margin/efficiency metrics = more room for improvement = larger bridge opportunity.
| Metric | Hospital | P25 | P50 | P75 | Percentile |
|---|---|---|---|---|---|
| Op Margin | 2.7% | -14.8% | -2.1% | 6.6% | P65 |
| Net-to-Gross | 60.2% | 33.7% | 46.2% | 60.5% | P74 |
| Occupancy | 28.5% | 21.1% | 46.4% | 69.9% | P36 |
| Rev/Bed | $126K | $288K | $466K | $885K | P2 |
| Exp/Bed | $122K | $272K | $468K | $963K | P2 |
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.