Bridge Realization Estimate
ML model predicts what fraction of the bridge is achievable (accuracy: 60%, n=5,839)
Expected realization: 68% of modeled bridge. Strengths: Revenue per Bed, Bed Count. Risks: Occupancy Rate. Risk-adjusted uplift: $2.2M (vs $3.2M 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 | $1.2M | $1.2M | $0 | 12mo |
| Denial Rate Reduction | 12.0% DEFAULT | 6.5% BENCHMARK | $1.2M | $33K | $1.2M | $0 | 12mo |
| A/R Days Reduction | 52.00 DEFAULT | 38.00 BENCHMARK | $186K | $553K | $739K | $2.3M | 9mo |
| Clean Claim Rate | 88.0% DEFAULT | 96.0% BENCHMARK | $0 | $39K | $39K | $0 | 6mo |
| Net Collection Rate | 93.5% DEFAULT | 57.0% 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 | $304K | $607K | $911K | $1.2M | $1.2M | $1.2M | $1.2M |
| Denial Rate Reduction | $0 | $301K | $601K | $902K | $1.2M | $1.2M | $1.2M | $1.2M |
| A/R Days Reduction | $0 | $246K | $493K | $739K | $739K | $739K | $739K | $739K |
| Clean Claim Rate | $0 | $19K | $39K | $39K | $39K | $39K | $39K | $39K |
| Cumulative | $0 | $870K | $1.7M | $2.6M | $3.2M | $3.2M | $3.2M | $3.2M |
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 $3.2M is added at exit.
| Entry \ Exit | 9.0x | 10.0x | 11.0x | 11.5x | 12.0x |
|---|---|---|---|---|---|
| 8.0x | 107% / 38.0x | 112% / 42.6x | 116% / 47.2x | 118% / 49.5x | 120% / 51.8x |
| 9.0x | 102% / 33.4x | 106% / 37.5x | 111% / 41.6x | 113% / 43.6x | 115% / 45.7x |
| 10.0x | 97% / 29.8x | 102% / 33.4x | 106% / 37.1x | 108% / 38.9x | 110% / 40.8x |
| 11.0x | 93% / 26.8x | 98% / 30.1x | 102% / 33.4x | 104% / 35.1x | 106% / 36.8x |
| 12.0x | 89% / 24.3x | 94% / 27.3x | 98% / 30.4x | 100% / 31.9x | 102% / 33.4x |
Covenant Headroom (at 10x Entry, 6.5x Max Leverage)
Pro forma EBITDA can decline 76% before the 6.5x covenant trips. RCM uplift reduces leverage from 8.5x to 1.5x, adding 6.9 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 | $712K | — | $712K | 1.2% |
| Year 1 | $734K | +$2.1M | $2.9M | 4.7% |
| Year 2 | $756K | +$3.2M | $4.0M | 6.5% |
| Year 3 | $779K | +$3.2M | $4.0M | 6.5% |
| Year 4 | $802K | +$3.2M | $4.0M | 6.6% |
| Year 5 | $826K | +$3.2M | $4.0M | 6.6% |
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 | $607K | $911K | $1.2M | $1.5M |
| Denial Rate Reductio | $601K | $902K | $1.2M | $1.4M |
| A/R Days Reduction | $369K | $554K | $739K | $887K |
| Clean Claim Rate | $19K | $29K | $39K | $47K |
| Total | $1.6M | $2.4M | $3.2M | $3.8M |
Peer Context — Where This Hospital Sits
Key metrics vs 22 size-matched peers. Low percentile on margin/efficiency metrics = more room for improvement = larger bridge opportunity.
| Metric | Hospital | P25 | P50 | P75 | Percentile |
|---|---|---|---|---|---|
| Op Margin | 1.2% | -10.6% | -6.0% | 0.6% | P73 |
| Net-to-Gross | 56.0% | 45.2% | 54.9% | 57.1% | P68 |
| Occupancy | 44.2% | 44.2% | 52.3% | 62.7% | P23 |
| Rev/Bed | $2.4M | $1.5M | $2.2M | $2.9M | P68 |
| Exp/Bed | $2.4M | $1.7M | $2.2M | $3.1M | P59 |
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.