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, Net-to-Gross Ratio. Risk-adjusted uplift: $0.3M (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 | $150K | $8K | $158K | $0 | 12mo |
| Cost to Collect | 4.5% DEFAULT | 2.5% BENCHMARK | $0 | $156K | $156K | $0 | 12mo |
| A/R Days Reduction | 52.00 DEFAULT | 38.00 BENCHMARK | $24K | $71K | $95K | $299K | 9mo |
| Clean Claim Rate | 88.0% DEFAULT | 96.0% BENCHMARK | $0 | $10K | $10K | $0 | 6mo |
| Net Collection Rate | 93.5% DEFAULT | 59.8% 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 | $40K | $79K | $119K | $158K | $158K | $158K | $158K |
| Cost to Collect | $0 | $39K | $78K | $117K | $156K | $156K | $156K | $156K |
| A/R Days Reduction | $0 | $32K | $63K | $95K | $95K | $95K | $95K | $95K |
| Clean Claim Rate | $0 | $5K | $10K | $10K | $10K | $10K | $10K | $10K |
| Cumulative | $0 | $115K | $230K | $340K | $418K | $418K | $418K | $418K |
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 $418K is added at exit.
| Entry \ Exit | 9.0x | 10.0x | 11.0x | 11.5x | 12.0x |
|---|---|---|---|---|---|
| 8.0x | 72% / 14.9x | 76% / 16.9x | 80% / 18.9x | 82% / 19.9x | 84% / 20.9x |
| 9.0x | 67% / 12.8x | 71% / 14.6x | 75% / 16.4x | 77% / 17.3x | 79% / 18.2x |
| 10.0x | 62% / 11.2x | 67% / 12.8x | 71% / 14.4x | 72% / 15.3x | 74% / 16.1x |
| 11.0x | 58% / 9.9x | 63% / 11.4x | 67% / 12.8x | 68% / 13.6x | 70% / 14.3x |
| 12.0x | 55% / 8.8x | 59% / 10.2x | 63% / 11.5x | 65% / 12.2x | 67% / 12.8x |
Covenant Headroom (at 10x Entry, 6.5x Max Leverage)
Pro forma EBITDA can decline 44% before the 6.5x covenant trips. RCM uplift reduces leverage from 8.5x to 3.7x, adding 4.8 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 | $318K | — | $318K | 4.1% |
| Year 1 | $327K | +$279K | $606K | 7.8% |
| Year 2 | $337K | +$418K | $755K | 9.7% |
| Year 3 | $347K | +$418K | $766K | 9.8% |
| Year 4 | $358K | +$418K | $776K | 10.0% |
| Year 5 | $368K | +$418K | $787K | 10.1% |
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 | $79K | $119K | $158K | $190K |
| Cost to Collect | $78K | $117K | $156K | $187K |
| A/R Days Reduction | $47K | $71K | $95K | $114K |
| Clean Claim Rate | $5K | $7K | $10K | $12K |
| Total | $209K | $314K | $418K | $502K |
Peer Context — Where This Hospital Sits
Key metrics vs 130 size-matched peers. Low percentile on margin/efficiency metrics = more room for improvement = larger bridge opportunity.
| Metric | Hospital | P25 | P50 | P75 | Percentile |
|---|---|---|---|---|---|
| Op Margin | 4.1% | -14.8% | -2.1% | 6.3% | P68 |
| Net-to-Gross | 62.6% | 33.1% | 46.2% | 59.8% | P78 |
| Occupancy | 60.6% | 20.5% | 46.4% | 69.8% | P64 |
| Rev/Bed | $324K | $288K | $460K | $881K | P33 |
| Exp/Bed | $311K | $276K | $445K | $961K | P33 |
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.