Bridge Realization Estimate
ML model predicts what fraction of the bridge is achievable (accuracy: 60%, n=5,839)
Expected realization: 67% of modeled bridge. Strengths: Revenue per Bed, Commercial Payer %. Risks: Occupancy Rate, Net-to-Gross Ratio. Risk-adjusted uplift: $1.6M (vs $2.5M 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 | $932K | $932K | $0 | 12mo |
| Denial Rate Reduction | 12.0% DEFAULT | 6.5% BENCHMARK | $897K | $26K | $923K | $0 | 12mo |
| A/R Days Reduction | 52.00 DEFAULT | 38.00 BENCHMARK | $143K | $424K | $567K | $1.8M | 9mo |
| Clean Claim Rate | 88.0% DEFAULT | 96.0% BENCHMARK | $0 | $30K | $30K | $0 | 6mo |
| Net Collection Rate | 93.5% DEFAULT | 68.2% 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 | $233K | $466K | $699K | $932K | $932K | $932K | $932K |
| Denial Rate Reduction | $0 | $231K | $461K | $692K | $923K | $923K | $923K | $923K |
| A/R Days Reduction | $0 | $189K | $378K | $567K | $567K | $567K | $567K | $567K |
| Clean Claim Rate | $0 | $15K | $30K | $30K | $30K | $30K | $30K | $30K |
| Cumulative | $0 | $668K | $1.3M | $2.0M | $2.5M | $2.5M | $2.5M | $2.5M |
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 $2.5M is added at exit.
| Entry \ Exit | 9.0x | 10.0x | 11.0x | 11.5x | 12.0x |
|---|---|---|---|---|---|
| 8.0x | 97% / 29.7x | 102% / 33.3x | 106% / 37.0x | 108% / 38.8x | 110% / 40.6x |
| 9.0x | 92% / 26.0x | 96% / 29.3x | 101% / 32.5x | 103% / 34.1x | 104% / 35.8x |
| 10.0x | 87% / 23.1x | 92% / 26.0x | 96% / 28.9x | 98% / 30.4x | 100% / 31.9x |
| 11.0x | 83% / 20.7x | 88% / 23.4x | 92% / 26.0x | 94% / 27.3x | 96% / 28.7x |
| 12.0x | 80% / 18.7x | 84% / 21.1x | 88% / 23.6x | 90% / 24.8x | 92% / 26.0x |
Covenant Headroom (at 10x Entry, 6.5x Max Leverage)
Pro forma EBITDA can decline 70% before the 6.5x covenant trips. RCM uplift reduces leverage from 8.5x to 1.9x, adding 6.5 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 | $733K | — | $733K | 1.6% |
| Year 1 | $755K | +$1.6M | $2.4M | 5.1% |
| Year 2 | $778K | +$2.5M | $3.2M | 6.9% |
| Year 3 | $801K | +$2.5M | $3.3M | 7.0% |
| Year 4 | $825K | +$2.5M | $3.3M | 7.0% |
| Year 5 | $850K | +$2.5M | $3.3M | 7.1% |
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% |
|---|---|---|---|---|
| Cost to Collect | $466K | $699K | $932K | $1.1M |
| Denial Rate Reductio | $461K | $692K | $923K | $1.1M |
| A/R Days Reduction | $284K | $425K | $567K | $680K |
| Clean Claim Rate | $15K | $22K | $30K | $36K |
| Total | $1.2M | $1.8M | $2.5M | $2.9M |
Peer Context — Where This Hospital Sits
Key metrics vs 867 size-matched peers. Low percentile on margin/efficiency metrics = more room for improvement = larger bridge opportunity.
| Metric | Hospital | P25 | P50 | P75 | Percentile |
|---|---|---|---|---|---|
| Op Margin | 1.6% | -22.6% | -8.5% | 2.6% | P72 |
| Net-to-Gross | 80.9% | 37.6% | 54.3% | 68.1% | P89 |
| Occupancy | 27.6% | 15.7% | 26.8% | 45.6% | P52 |
| Rev/Bed | $3.9M | $600K | $1.1M | $2.0M | P92 |
| Exp/Bed | $3.8M | $719K | $1.3M | $2.1M | P93 |
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.