Bridge Realization Estimate
ML model predicts what fraction of the bridge is achievable (accuracy: 60%, n=5,839)
Expected realization: 70% of modeled bridge. Strengths: Occupancy Rate, Commercial Payer %. Risks: Revenue per Bed, Net-to-Gross Ratio. Risk-adjusted uplift: $1.0M (vs $1.4M 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 | $531K | $531K | $0 | 12mo |
| Denial Rate Reduction | 12.0% DEFAULT | 6.5% BENCHMARK | $511K | $15K | $526K | $0 | 12mo |
| A/R Days Reduction | 52.00 DEFAULT | 38.00 BENCHMARK | $82K | $242K | $323K | $1.0M | 9mo |
| Clean Claim Rate | 88.0% DEFAULT | 96.0% BENCHMARK | $0 | $17K | $17K | $0 | 6mo |
| Net Collection Rate | 93.5% DEFAULT | 85.9% 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 | $133K | $266K | $399K | $531K | $531K | $531K | $531K |
| Denial Rate Reduction | $0 | $132K | $263K | $395K | $526K | $526K | $526K | $526K |
| A/R Days Reduction | $0 | $108K | $216K | $323K | $323K | $323K | $323K | $323K |
| Clean Claim Rate | $0 | $9K | $17K | $17K | $17K | $17K | $17K | $17K |
| Cumulative | $0 | $381K | $761K | $1.1M | $1.4M | $1.4M | $1.4M | $1.4M |
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 $1.4M is added at exit.
| Entry \ Exit | 9.0x | 10.0x | 11.0x | 11.5x | 12.0x |
|---|---|---|---|---|---|
| 8.0x | 156% / 110.3x | 162% / 122.9x | 167% / 135.5x | 169% / 141.8x | 172% / 148.1x |
| 9.0x | 150% / 97.7x | 155% / 108.9x | 161% / 120.1x | 163% / 125.7x | 165% / 131.3x |
| 10.0x | 145% / 87.6x | 150% / 97.7x | 155% / 107.7x | 157% / 112.8x | 160% / 117.8x |
| 11.0x | 140% / 79.3x | 145% / 88.5x | 150% / 97.7x | 152% / 102.2x | 155% / 106.8x |
| 12.0x | 135% / 72.4x | 141% / 80.8x | 146% / 89.2x | 148% / 93.4x | 150% / 97.7x |
Covenant Headroom (at 10x Entry, 6.5x Max Leverage)
Pro forma EBITDA can decline 92% before the 6.5x covenant trips. RCM uplift reduces leverage from 8.5x to 0.6x, adding 7.9 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 | $97K | — | $97K | 0.4% |
| Year 1 | $100K | +$932K | $1.0M | 3.9% |
| Year 2 | $103K | +$1.4M | $1.5M | 5.6% |
| Year 3 | $106K | +$1.4M | $1.5M | 5.7% |
| Year 4 | $110K | +$1.4M | $1.5M | 5.7% |
| Year 5 | $113K | +$1.4M | $1.5M | 5.7% |
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 | $266K | $399K | $531K | $638K |
| Denial Rate Reductio | $263K | $395K | $526K | $631K |
| A/R Days Reduction | $162K | $242K | $323K | $388K |
| Clean Claim Rate | $9K | $13K | $17K | $20K |
| Total | $699K | $1.0M | $1.4M | $1.7M |
Peer Context — Where This Hospital Sits
Key metrics vs 18 size-matched peers. Low percentile on margin/efficiency metrics = more room for improvement = larger bridge opportunity.
| Metric | Hospital | P25 | P50 | P75 | Percentile |
|---|---|---|---|---|---|
| Op Margin | 0.4% | -13.6% | -3.4% | 2.3% | P64 |
| Net-to-Gross | 83.2% | 71.5% | 83.0% | 85.9% | P50 |
| Occupancy | 74.6% | 68.1% | 73.5% | 85.8% | P53 |
| Rev/Bed | $409K | $701K | $1.5M | $1.9M | P7 |
| Exp/Bed | $407K | $404K | $941K | $2.0M | 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.