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: Bed Count. Risks: Occupancy Rate, Revenue per Bed. Risk-adjusted uplift: $0.4M (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 | $250K | $250K | $0 | 12mo |
| Denial Rate Reduction | 12.0% DEFAULT | 6.5% BENCHMARK | $241K | $8K | $249K | $0 | 12mo |
| A/R Days Reduction | 52.00 DEFAULT | 38.00 BENCHMARK | $38K | $114K | $152K | $480K | 9mo |
| Clean Claim Rate | 88.0% DEFAULT | 96.0% BENCHMARK | $0 | $10K | $10K | $0 | 6mo |
| Net Collection Rate | 93.5% DEFAULT | 45.9% 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 | $63K | $125K | $188K | $250K | $250K | $250K | $250K |
| Denial Rate Reduction | $0 | $62K | $125K | $187K | $249K | $249K | $249K | $249K |
| A/R Days Reduction | $0 | $51K | $102K | $152K | $152K | $152K | $152K | $152K |
| Clean Claim Rate | $0 | $5K | $10K | $10K | $10K | $10K | $10K | $10K |
| Cumulative | $0 | $180K | $361K | $537K | $662K | $662K | $662K | $662K |
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 $662K is added at exit.
| Entry \ Exit | 9.0x | 10.0x | 11.0x | 11.5x | 12.0x |
|---|---|---|---|---|---|
| 8.0x | 44% / 6.2x | 48% / 7.2x | 52% / 8.2x | 54% / 8.8x | 56% / 9.3x |
| 9.0x | 39% / 5.1x | 43% / 6.0x | 47% / 7.0x | 49% / 7.4x | 51% / 7.9x |
| 10.0x | 34% / 4.3x | 39% / 5.1x | 43% / 6.0x | 45% / 6.4x | 47% / 6.8x |
| 11.0x | 29% / 3.6x | 34% / 4.3x | 39% / 5.1x | 41% / 5.5x | 42% / 5.9x |
| 12.0x | 25% / 3.0x | 30% / 3.7x | 35% / 4.4x | 37% / 4.8x | 39% / 5.1x |
Covenant Headroom (at 10x Entry, 6.5x Max Leverage)
Pro forma EBITDA can decline -16% before the 6.5x covenant trips. RCM uplift reduces leverage from 8.5x to 7.5x, adding 1.0 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 | $5.2M | — | $5.2M | 41.6% |
| Year 1 | $5.4M | +$441K | $5.8M | 46.4% |
| Year 2 | $5.5M | +$662K | $6.2M | 49.5% |
| Year 3 | $5.7M | +$662K | $6.4M | 50.8% |
| Year 4 | $5.9M | +$662K | $6.5M | 52.1% |
| Year 5 | $6.0M | +$662K | $6.7M | 53.5% |
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 | $125K | $188K | $250K | $300K |
| Denial Rate Reductio | $125K | $187K | $249K | $299K |
| A/R Days Reduction | $76K | $114K | $152K | $183K |
| Clean Claim Rate | $5K | $7K | $10K | $12K |
| Total | $331K | $496K | $662K | $794K |
Peer Context — Where This Hospital Sits
Key metrics vs 85 size-matched peers. Low percentile on margin/efficiency metrics = more room for improvement = larger bridge opportunity.
| Metric | Hospital | P25 | P50 | P75 | Percentile |
|---|---|---|---|---|---|
| Op Margin | 41.6% | -25.1% | -4.9% | 4.1% | P98 |
| Net-to-Gross | 41.5% | 27.3% | 35.8% | 45.9% | P62 |
| Occupancy | 37.6% | 28.2% | 54.8% | 68.5% | P38 |
| Rev/Bed | $209K | $255K | $416K | $702K | P14 |
| Exp/Bed | $122K | $236K | $430K | $885K | 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.