Bridge Realization Estimate
ML model predicts what fraction of the bridge is achievable (accuracy: 60%, n=5,839)
Expected realization: 72% of modeled bridge. Strengths: Occupancy Rate. Risks: Revenue per Bed. Risk-adjusted uplift: $1.4M (vs $1.9M 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 | $740K | $740K | $0 | 12mo |
| Denial Rate Reduction | 12.0% DEFAULT | 6.5% BENCHMARK | $712K | $20K | $733K | $0 | 12mo |
| A/R Days Reduction | 52.00 DEFAULT | 38.00 BENCHMARK | $114K | $337K | $450K | $1.4M | 9mo |
| Clean Claim Rate | 88.0% DEFAULT | 96.0% BENCHMARK | $0 | $24K | $24K | $0 | 6mo |
| Net Collection Rate | 93.5% DEFAULT | 58.1% 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 | $185K | $370K | $555K | $740K | $740K | $740K | $740K |
| Denial Rate Reduction | $0 | $183K | $366K | $550K | $733K | $733K | $733K | $733K |
| A/R Days Reduction | $0 | $150K | $300K | $450K | $450K | $450K | $450K | $450K |
| Clean Claim Rate | $0 | $12K | $24K | $24K | $24K | $24K | $24K | $24K |
| Cumulative | $0 | $530K | $1.1M | $1.6M | $1.9M | $1.9M | $1.9M | $1.9M |
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 $1.9M is added at exit.
| Entry \ Exit | 9.0x | 10.0x | 11.0x | 11.5x | 12.0x |
|---|---|---|---|---|---|
| 8.0x | 77% / 17.2x | 81% / 19.5x | 85% / 21.8x | 87% / 22.9x | 89% / 24.1x |
| 9.0x | 72% / 15.0x | 76% / 17.0x | 80% / 19.0x | 82% / 20.0x | 84% / 21.0x |
| 10.0x | 67% / 13.2x | 72% / 15.0x | 76% / 16.8x | 78% / 17.7x | 79% / 18.6x |
| 11.0x | 63% / 11.7x | 68% / 13.3x | 72% / 15.0x | 74% / 15.8x | 75% / 16.6x |
| 12.0x | 60% / 10.4x | 64% / 11.9x | 68% / 13.4x | 70% / 14.2x | 72% / 15.0x |
Covenant Headroom (at 10x Entry, 6.5x Max Leverage)
Pro forma EBITDA can decline 51% before the 6.5x covenant trips. RCM uplift reduces leverage from 8.5x to 3.2x, adding 5.3 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 | $1.2M | — | $1.2M | 3.2% |
| Year 1 | $1.2M | +$1.3M | $2.5M | 6.8% |
| Year 2 | $1.3M | +$1.9M | $3.2M | 8.7% |
| Year 3 | $1.3M | +$1.9M | $3.2M | 8.8% |
| Year 4 | $1.3M | +$1.9M | $3.3M | 8.9% |
| Year 5 | $1.4M | +$1.9M | $3.3M | 9.0% |
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 | $370K | $555K | $740K | $888K |
| Denial Rate Reductio | $366K | $550K | $733K | $879K |
| A/R Days Reduction | $225K | $338K | $450K | $540K |
| Clean Claim Rate | $12K | $18K | $24K | $28K |
| Total | $973K | $1.5M | $1.9M | $2.3M |
Peer Context — Where This Hospital Sits
Key metrics vs 57 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% | -18.1% | -10.1% | 2.2% | P78 |
| Net-to-Gross | 59.8% | 36.4% | 43.7% | 58.2% | P75 |
| Occupancy | 83.2% | 59.3% | 66.6% | 81.7% | P77 |
| Rev/Bed | $363K | $371K | $1.0M | $1.6M | P22 |
| Exp/Bed | $351K | $328K | $1.2M | $1.8M | 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.