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: Occupancy Rate. Risks: Revenue per Bed, Commercial Payer %. Risk-adjusted uplift: $1.2M (vs $1.8M 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 | $671K | $671K | $0 | 12mo |
| Denial Rate Reduction | 12.0% DEFAULT | 6.5% BENCHMARK | $646K | $18K | $665K | $0 | 12mo |
| A/R Days Reduction | 52.00 DEFAULT | 38.00 BENCHMARK | $103K | $305K | $408K | $1.3M | 9mo |
| Clean Claim Rate | 88.0% DEFAULT | 96.0% BENCHMARK | $0 | $21K | $21K | $0 | 6mo |
| Net Collection Rate | 93.5% DEFAULT | 53.8% 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 | $168K | $336K | $503K | $671K | $671K | $671K | $671K |
| Denial Rate Reduction | $0 | $166K | $332K | $498K | $665K | $665K | $665K | $665K |
| A/R Days Reduction | $0 | $136K | $272K | $408K | $408K | $408K | $408K | $408K |
| Clean Claim Rate | $0 | $11K | $21K | $21K | $21K | $21K | $21K | $21K |
| Cumulative | $0 | $481K | $962K | $1.4M | $1.8M | $1.8M | $1.8M | $1.8M |
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 $1.8M is added at exit.
| Entry \ Exit | 9.0x | 10.0x | 11.0x | 11.5x | 12.0x |
|---|---|---|---|---|---|
| 8.0x | 51% / 7.8x | 55% / 9.0x | 59% / 10.3x | 61% / 10.9x | 63% / 11.5x |
| 9.0x | 46% / 6.6x | 50% / 7.7x | 54% / 8.8x | 56% / 9.3x | 58% / 9.9x |
| 10.0x | 41% / 5.6x | 46% / 6.6x | 50% / 7.6x | 52% / 8.1x | 54% / 8.6x |
| 11.0x | 37% / 4.8x | 42% / 5.7x | 46% / 6.6x | 48% / 7.0x | 50% / 7.5x |
| 12.0x | 33% / 4.1x | 38% / 4.9x | 42% / 5.8x | 44% / 6.2x | 46% / 6.6x |
Covenant Headroom (at 10x Entry, 6.5x Max Leverage)
Pro forma EBITDA can decline 4% before the 6.5x covenant trips. RCM uplift reduces leverage from 8.5x to 6.3x, adding 2.2 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 | $5.0M | — | $5.0M | 14.9% |
| Year 1 | $5.2M | +$1.2M | $6.3M | 18.9% |
| Year 2 | $5.3M | +$1.8M | $7.1M | 21.1% |
| Year 3 | $5.5M | +$1.8M | $7.2M | 21.6% |
| Year 4 | $5.6M | +$1.8M | $7.4M | 22.0% |
| Year 5 | $5.8M | +$1.8M | $7.6M | 22.6% |
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 | $336K | $503K | $671K | $805K |
| Denial Rate Reductio | $332K | $498K | $665K | $797K |
| A/R Days Reduction | $204K | $306K | $408K | $490K |
| Clean Claim Rate | $11K | $16K | $21K | $26K |
| Total | $883K | $1.3M | $1.8M | $2.1M |
Peer Context — Where This Hospital Sits
Key metrics vs 59 size-matched peers. Low percentile on margin/efficiency metrics = more room for improvement = larger bridge opportunity.
| Metric | Hospital | P25 | P50 | P75 | Percentile |
|---|---|---|---|---|---|
| Op Margin | 14.9% | -18.4% | -11.3% | 0.2% | P88 |
| Net-to-Gross | 66.8% | 35.3% | 43.3% | 53.8% | P86 |
| Occupancy | 67.8% | 59.3% | 66.6% | 81.2% | P53 |
| Rev/Bed | $280K | $380K | $1.1M | $1.7M | P9 |
| Exp/Bed | $238K | $333K | $1.3M | $1.9M | P2 |
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.