Bridge Realization Estimate
ML model predicts what fraction of the bridge is achievable (accuracy: 60%, n=5,839)
Expected realization: 73% of modeled bridge. Strengths: Occupancy Rate, Bed Count. Risks: Revenue per Bed, Commercial Payer %. Risk-adjusted uplift: $0.2M (vs $0.3M 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 | $113K | $8K | $122K | $0 | 12mo |
| Cost to Collect | 4.5% DEFAULT | 2.5% BENCHMARK | $0 | $118K | $118K | $0 | 12mo |
| A/R Days Reduction | 52.00 DEFAULT | 38.00 BENCHMARK | $18K | $54K | $72K | $226K | 9mo |
| Clean Claim Rate | 88.0% DEFAULT | 96.0% BENCHMARK | $0 | $10K | $10K | $0 | 6mo |
| Net Collection Rate | 93.5% DEFAULT | 59.6% 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 | $30K | $61K | $91K | $122K | $122K | $122K | $122K |
| Cost to Collect | $0 | $29K | $59K | $88K | $118K | $118K | $118K | $118K |
| A/R Days Reduction | $0 | $24K | $48K | $72K | $72K | $72K | $72K | $72K |
| Clean Claim Rate | $0 | $5K | $10K | $10K | $10K | $10K | $10K | $10K |
| Cumulative | $0 | $89K | $177K | $261K | $321K | $321K | $321K | $321K |
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 $321K is added at exit.
| Entry \ Exit | 9.0x | 10.0x | 11.0x | 11.5x | 12.0x |
|---|---|---|---|---|---|
| 8.0x | 99% / 31.6x | 104% / 35.5x | 108% / 39.3x | 110% / 41.3x | 112% / 43.2x |
| 9.0x | 94% / 27.7x | 99% / 31.2x | 103% / 34.6x | 105% / 36.3x | 107% / 38.0x |
| 10.0x | 90% / 24.6x | 94% / 27.7x | 98% / 30.8x | 100% / 32.4x | 102% / 33.9x |
| 11.0x | 86% / 22.1x | 90% / 24.9x | 94% / 27.7x | 96% / 29.1x | 98% / 30.5x |
| 12.0x | 82% / 20.0x | 86% / 22.6x | 91% / 25.1x | 92% / 26.4x | 94% / 27.7x |
Covenant Headroom (at 10x Entry, 6.5x Max Leverage)
Pro forma EBITDA can decline 72% before the 6.5x covenant trips. RCM uplift reduces leverage from 8.5x to 1.8x, adding 6.6 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 | $89K | — | $89K | 1.5% |
| Year 1 | $92K | +$214K | $306K | 5.2% |
| Year 2 | $94K | +$321K | $415K | 7.0% |
| Year 3 | $97K | +$321K | $418K | 7.1% |
| Year 4 | $100K | +$321K | $421K | 7.1% |
| Year 5 | $103K | +$321K | $424K | 7.2% |
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 | $61K | $91K | $122K | $146K |
| Cost to Collect | $59K | $88K | $118K | $141K |
| A/R Days Reduction | $36K | $54K | $72K | $86K |
| Clean Claim Rate | $5K | $7K | $10K | $12K |
| Total | $160K | $241K | $321K | $385K |
Peer Context — Where This Hospital Sits
Key metrics vs 127 size-matched peers. Low percentile on margin/efficiency metrics = more room for improvement = larger bridge opportunity.
| Metric | Hospital | P25 | P50 | P75 | Percentile |
|---|---|---|---|---|---|
| Op Margin | 1.5% | -15.4% | -2.3% | 7.2% | P56 |
| Net-to-Gross | 47.5% | 32.3% | 45.9% | 59.6% | P54 |
| Occupancy | 87.3% | 20.5% | 46.1% | 69.5% | P98 |
| Rev/Bed | $295K | $290K | $537K | $964K | P26 |
| Exp/Bed | $290K | $277K | $514K | $985K | P28 |
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.