Bridge Realization Estimate
ML model predicts what fraction of the bridge is achievable (accuracy: 60%, n=5,839)
Expected realization: 70% of modeled bridge. Strengths: Commercial Payer %, Bed Count. Risks: Revenue per Bed. Risk-adjusted uplift: $0.2M (vs $0.4M 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 | $127K | $8K | $135K | $0 | 12mo |
| Cost to Collect | 4.5% DEFAULT | 2.5% BENCHMARK | $0 | $132K | $132K | $0 | 12mo |
| A/R Days Reduction | 52.00 DEFAULT | 38.00 BENCHMARK | $20K | $60K | $80K | $253K | 9mo |
| Clean Claim Rate | 88.0% DEFAULT | 96.0% BENCHMARK | $0 | $10K | $10K | $0 | 6mo |
| Net Collection Rate | 93.5% DEFAULT | 66.4% 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 |
|---|---|---|---|---|---|---|---|---|
| Denial Rate Reduction | $0 | $34K | $68K | $101K | $135K | $135K | $135K | $135K |
| Cost to Collect | $0 | $33K | $66K | $99K | $132K | $132K | $132K | $132K |
| A/R Days Reduction | $0 | $27K | $53K | $80K | $80K | $80K | $80K | $80K |
| Clean Claim Rate | $0 | $5K | $10K | $10K | $10K | $10K | $10K | $10K |
| Cumulative | $0 | $98K | $196K | $290K | $356K | $356K | $356K | $356K |
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 $356K is added at exit.
| Entry \ Exit | 9.0x | 10.0x | 11.0x | 11.5x | 12.0x |
|---|---|---|---|---|---|
| 8.0x | 45% / 6.3x | 49% / 7.4x | 53% / 8.5x | 55% / 9.0x | 57% / 9.5x |
| 9.0x | 39% / 5.3x | 44% / 6.2x | 48% / 7.2x | 50% / 7.6x | 52% / 8.1x |
| 10.0x | 35% / 4.4x | 39% / 5.3x | 44% / 6.1x | 46% / 6.5x | 47% / 7.0x |
| 11.0x | 30% / 3.7x | 35% / 4.5x | 39% / 5.3x | 41% / 5.7x | 43% / 6.0x |
| 12.0x | 26% / 3.1x | 31% / 3.9x | 35% / 4.6x | 37% / 4.9x | 39% / 5.3x |
Covenant Headroom (at 10x Entry, 6.5x Max Leverage)
Pro forma EBITDA can decline -13% before the 6.5x covenant trips. RCM uplift reduces leverage from 8.5x to 7.4x, adding 1.1 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 | $2.4M | — | $2.4M | 35.9% |
| Year 1 | $2.4M | +$238K | $2.7M | 40.6% |
| Year 2 | $2.5M | +$356K | $2.9M | 43.5% |
| Year 3 | $2.6M | +$356K | $2.9M | 44.6% |
| Year 4 | $2.7M | +$356K | $3.0M | 45.8% |
| Year 5 | $2.7M | +$356K | $3.1M | 47.0% |
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 | $68K | $101K | $135K | $162K |
| Cost to Collect | $66K | $99K | $132K | $158K |
| A/R Days Reduction | $40K | $60K | $80K | $96K |
| Clean Claim Rate | $5K | $7K | $10K | $12K |
| Total | $178K | $267K | $356K | $428K |
Peer Context — Where This Hospital Sits
Key metrics vs 37 size-matched peers. Low percentile on margin/efficiency metrics = more room for improvement = larger bridge opportunity.
| Metric | Hospital | P25 | P50 | P75 | Percentile |
|---|---|---|---|---|---|
| Op Margin | 35.9% | -4.6% | 4.1% | 17.0% | P94 |
| Net-to-Gross | 52.1% | 37.9% | 49.3% | 66.4% | P54 |
| Occupancy | 51.5% | 20.6% | 51.5% | 79.1% | P49 |
| Rev/Bed | $658K | $337K | $658K | $1.0M | P49 |
| Exp/Bed | $422K | $290K | $422K | $956K | 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.