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: Revenue per Bed, Commercial Payer %. Risks: Occupancy Rate. Risk-adjusted uplift: $6.5M (vs $9.0M 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 |
|---|---|---|---|---|---|---|---|
| Net Collection Rate | 93.5% DEFAULT | 97.0% BENCHMARK | $2.6M | $0 | $2.6M | $0 | 18mo |
| Cost to Collect | 4.5% DEFAULT | 2.5% BENCHMARK | $0 | $2.4M | $2.4M | $0 | 12mo |
| Denial Rate Reduction | 12.0% DEFAULT | 6.5% BENCHMARK | $2.3M | $67K | $2.4M | $0 | 12mo |
| A/R Days Reduction | 52.00 DEFAULT | 38.00 BENCHMARK | $373K | $1.1M | $1.5M | $4.7M | 9mo |
| Clean Claim Rate | 88.0% DEFAULT | 96.0% BENCHMARK | $0 | $78K | $78K | $0 | 6mo |
| 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 |
|---|---|---|---|---|---|---|---|---|
| Net Collection Rate | $0 | $426K | $851K | $1.3M | $1.7M | $2.6M | $2.6M | $2.6M |
| Cost to Collect | $0 | $608K | $1.2M | $1.8M | $2.4M | $2.4M | $2.4M | $2.4M |
| Denial Rate Reduction | $0 | $602K | $1.2M | $1.8M | $2.4M | $2.4M | $2.4M | $2.4M |
| A/R Days Reduction | $0 | $493K | $986K | $1.5M | $1.5M | $1.5M | $1.5M | $1.5M |
| Clean Claim Rate | $0 | $39K | $78K | $78K | $78K | $78K | $78K | $78K |
| Cumulative | $0 | $2.2M | $4.3M | $6.5M | $8.1M | $9.0M | $9.0M | $9.0M |
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 $9.0M is added at exit.
| Entry \ Exit | 9.0x | 10.0x | 11.0x | 11.5x | 12.0x |
|---|---|---|---|---|---|
| 8.0x | 86% / 22.0x | 90% / 24.8x | 94% / 27.6x | 96% / 29.0x | 98% / 30.4x |
| 9.0x | 81% / 19.2x | 85% / 21.7x | 89% / 24.2x | 91% / 25.4x | 93% / 26.7x |
| 10.0x | 76% / 17.0x | 81% / 19.2x | 85% / 21.4x | 87% / 22.6x | 88% / 23.7x |
| 11.0x | 72% / 15.1x | 77% / 17.2x | 81% / 19.2x | 82% / 20.2x | 84% / 21.2x |
| 12.0x | 69% / 13.6x | 73% / 15.5x | 77% / 17.3x | 79% / 18.3x | 81% / 19.2x |
Covenant Headroom (at 10x Entry, 6.5x Max Leverage)
Pro forma EBITDA can decline 60% before the 6.5x covenant trips. RCM uplift reduces leverage from 8.5x to 2.6x, adding 5.9 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 | $3.9M | — | $3.9M | 3.2% |
| Year 1 | $4.0M | +$6.0M | $10.0M | 8.2% |
| Year 2 | $4.1M | +$9.0M | $13.1M | 10.8% |
| Year 3 | $4.3M | +$9.0M | $13.2M | 10.9% |
| Year 4 | $4.4M | +$9.0M | $13.3M | 11.0% |
| Year 5 | $4.5M | +$9.0M | $13.5M | 11.1% |
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% |
|---|---|---|---|---|
| Net Collection Rate | $1.3M | $1.9M | $2.6M | $3.1M |
| Cost to Collect | $1.2M | $1.8M | $2.4M | $2.9M |
| Denial Rate Reductio | $1.2M | $1.8M | $2.4M | $2.9M |
| A/R Days Reduction | $740K | $1.1M | $1.5M | $1.8M |
| Clean Claim Rate | $39K | $58K | $78K | $93K |
| Total | $4.5M | $6.7M | $9.0M | $10.7M |
Peer Context — Where This Hospital Sits
Key metrics vs 12 size-matched peers. Low percentile on margin/efficiency metrics = more room for improvement = larger bridge opportunity.
| Metric | Hospital | P25 | P50 | P75 | Percentile |
|---|---|---|---|---|---|
| Op Margin | 3.2% | -35.1% | -25.8% | -5.1% | P78 |
| Net-to-Gross | 53.3% | 36.0% | 53.3% | 60.1% | P44 |
| Occupancy | 46.4% | 43.0% | 55.7% | 85.2% | P33 |
| Rev/Bed | $4.9M | $1.4M | $3.9M | $4.9M | P67 |
| Exp/Bed | $4.7M | $649K | $2.2M | $5.0M | P67 |
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.