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: $0.6M (vs $0.8M 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 | $292K | $292K | $0 | 12mo |
| Denial Rate Reduction | 12.0% DEFAULT | 6.5% BENCHMARK | $281K | $8K | $289K | $0 | 12mo |
| A/R Days Reduction | 52.00 DEFAULT | 38.00 BENCHMARK | $45K | $133K | $178K | $560K | 9mo |
| Clean Claim Rate | 88.0% DEFAULT | 96.0% BENCHMARK | $0 | $10K | $10K | $0 | 6mo |
| Net Collection Rate | 93.5% DEFAULT | 46.0% 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 | $73K | $146K | $219K | $292K | $292K | $292K | $292K |
| Denial Rate Reduction | $0 | $72K | $145K | $217K | $289K | $289K | $289K | $289K |
| A/R Days Reduction | $0 | $59K | $118K | $178K | $178K | $178K | $178K | $178K |
| Clean Claim Rate | $0 | $5K | $10K | $10K | $10K | $10K | $10K | $10K |
| Cumulative | $0 | $209K | $419K | $623K | $768K | $768K | $768K | $768K |
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 $768K is added at exit.
| Entry \ Exit | 9.0x | 10.0x | 11.0x | 11.5x | 12.0x |
|---|---|---|---|---|---|
| 8.0x | 46% / 6.7x | 51% / 7.8x | 55% / 8.9x | 57% / 9.4x | 58% / 10.0x |
| 9.0x | 41% / 5.6x | 46% / 6.5x | 50% / 7.5x | 52% / 8.0x | 53% / 8.5x |
| 10.0x | 36% / 4.7x | 41% / 5.6x | 45% / 6.5x | 47% / 6.9x | 49% / 7.3x |
| 11.0x | 32% / 4.0x | 37% / 4.8x | 41% / 5.6x | 43% / 6.0x | 45% / 6.4x |
| 12.0x | 27% / 3.4x | 33% / 4.1x | 37% / 4.8x | 39% / 5.2x | 41% / 5.6x |
Covenant Headroom (at 10x Entry, 6.5x Max Leverage)
Pro forma EBITDA can decline -9% before the 6.5x covenant trips. RCM uplift reduces leverage from 8.5x to 7.1x, adding 1.4 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 | $3.9M | — | $3.9M | 26.8% |
| Year 1 | $4.0M | +$512K | $4.5M | 31.1% |
| Year 2 | $4.1M | +$768K | $4.9M | 33.6% |
| Year 3 | $4.3M | +$768K | $5.0M | 34.5% |
| Year 4 | $4.4M | +$768K | $5.2M | 35.4% |
| Year 5 | $4.5M | +$768K | $5.3M | 36.3% |
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 | $146K | $219K | $292K | $350K |
| Denial Rate Reductio | $145K | $217K | $289K | $347K |
| A/R Days Reduction | $89K | $133K | $178K | $213K |
| Clean Claim Rate | $5K | $7K | $10K | $12K |
| Total | $384K | $576K | $768K | $922K |
Peer Context — Where This Hospital Sits
Key metrics vs 87 size-matched peers. Low percentile on margin/efficiency metrics = more room for improvement = larger bridge opportunity.
| Metric | Hospital | P25 | P50 | P75 | Percentile |
|---|---|---|---|---|---|
| Op Margin | 26.8% | -22.7% | -3.1% | 4.8% | P95 |
| Net-to-Gross | 46.2% | 26.8% | 35.8% | 46.0% | P75 |
| Occupancy | 86.7% | 27.4% | 54.8% | 69.8% | P99 |
| Rev/Bed | $281K | $252K | $394K | $708K | P31 |
| Exp/Bed | $206K | $230K | $422K | $873K | P18 |
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.