Bridge Realization Estimate
ML model predicts what fraction of the bridge is achievable (accuracy: 60%, n=5,839)
Expected realization: 69% of modeled bridge. Strengths: Occupancy Rate, Commercial Payer %. Risks: Revenue per Bed. Risk-adjusted uplift: $0.6M (vs $0.9M 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 | $360K | $360K | $0 | 12mo |
| Denial Rate Reduction | 12.0% DEFAULT | 6.5% BENCHMARK | $346K | $10K | $356K | $0 | 12mo |
| A/R Days Reduction | 52.00 DEFAULT | 38.00 BENCHMARK | $55K | $164K | $219K | $690K | 9mo |
| Clean Claim Rate | 88.0% DEFAULT | 96.0% BENCHMARK | $0 | $12K | $12K | $0 | 6mo |
| Net Collection Rate | 93.5% DEFAULT | 52.0% 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 | $90K | $180K | $270K | $360K | $360K | $360K | $360K |
| Denial Rate Reduction | $0 | $89K | $178K | $267K | $356K | $356K | $356K | $356K |
| A/R Days Reduction | $0 | $73K | $146K | $219K | $219K | $219K | $219K | $219K |
| Clean Claim Rate | $0 | $6K | $12K | $12K | $12K | $12K | $12K | $12K |
| Cumulative | $0 | $258K | $516K | $768K | $947K | $947K | $947K | $947K |
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 $947K is added at exit.
| Entry \ Exit | 9.0x | 10.0x | 11.0x | 11.5x | 12.0x |
|---|---|---|---|---|---|
| 8.0x | 66% / 12.6x | 70% / 14.3x | 74% / 16.1x | 76% / 17.0x | 78% / 17.9x |
| 9.0x | 61% / 10.8x | 65% / 12.4x | 69% / 13.9x | 71% / 14.7x | 73% / 15.5x |
| 10.0x | 57% / 9.4x | 61% / 10.8x | 65% / 12.2x | 67% / 12.9x | 69% / 13.6x |
| 11.0x | 53% / 8.3x | 57% / 9.5x | 61% / 10.8x | 63% / 11.5x | 65% / 12.1x |
| 12.0x | 49% / 7.3x | 53% / 8.5x | 57% / 9.7x | 59% / 10.2x | 61% / 10.8x |
Covenant Headroom (at 10x Entry, 6.5x Max Leverage)
Pro forma EBITDA can decline 35% before the 6.5x covenant trips. RCM uplift reduces leverage from 8.5x to 4.2x, adding 4.2 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 | $942K | — | $942K | 5.2% |
| Year 1 | $970K | +$631K | $1.6M | 8.9% |
| Year 2 | $999K | +$947K | $1.9M | 10.8% |
| Year 3 | $1.0M | +$947K | $2.0M | 11.0% |
| Year 4 | $1.1M | +$947K | $2.0M | 11.2% |
| Year 5 | $1.1M | +$947K | $2.0M | 11.3% |
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 | $180K | $270K | $360K | $432K |
| Denial Rate Reductio | $178K | $267K | $356K | $428K |
| A/R Days Reduction | $109K | $164K | $219K | $263K |
| Clean Claim Rate | $6K | $9K | $12K | $14K |
| Total | $473K | $710K | $947K | $1.1M |
Peer Context — Where This Hospital Sits
Key metrics vs 113 size-matched peers. Low percentile on margin/efficiency metrics = more room for improvement = larger bridge opportunity.
| Metric | Hospital | P25 | P50 | P75 | Percentile |
|---|---|---|---|---|---|
| Op Margin | 5.2% | -22.9% | -4.9% | 4.1% | P79 |
| Net-to-Gross | 51.0% | 29.0% | 39.3% | 52.0% | P72 |
| Occupancy | 59.7% | 22.0% | 46.4% | 67.8% | P65 |
| Rev/Bed | $375K | $272K | $445K | $882K | P42 |
| Exp/Bed | $355K | $267K | $447K | $965K | P39 |
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.