Bridge Realization Estimate
ML model predicts what fraction of the bridge is achievable (accuracy: 60%, n=5,839)
Expected realization: 60% of modeled bridge. Strengths: Payer Diversity, Bed Count. Risks: Occupancy Rate, Commercial Payer %. Risk-adjusted uplift: $1.5M (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 | $939K | $939K | $0 | 12mo |
| Denial Rate Reduction | 12.0% DEFAULT | 6.5% BENCHMARK | $904K | $26K | $930K | $0 | 12mo |
| A/R Days Reduction | 52.00 DEFAULT | 38.00 BENCHMARK | $144K | $427K | $571K | $1.8M | 9mo |
| Clean Claim Rate | 88.0% DEFAULT | 96.0% BENCHMARK | $0 | $30K | $30K | $0 | 6mo |
| Net Collection Rate | 93.5% DEFAULT | 50.7% 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 | $235K | $469K | $704K | $939K | $939K | $939K | $939K |
| Denial Rate Reduction | $0 | $232K | $465K | $697K | $930K | $930K | $930K | $930K |
| A/R Days Reduction | $0 | $190K | $381K | $571K | $571K | $571K | $571K | $571K |
| Clean Claim Rate | $0 | $15K | $30K | $30K | $30K | $30K | $30K | $30K |
| Cumulative | $0 | $673K | $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 | 53% / 8.3x | 57% / 9.6x | 61% / 10.8x | 63% / 11.5x | 65% / 12.1x |
| 9.0x | 48% / 7.0x | 52% / 8.2x | 56% / 9.3x | 58% / 9.9x | 60% / 10.4x |
| 10.0x | 43% / 6.0x | 48% / 7.0x | 52% / 8.0x | 54% / 8.6x | 55% / 9.1x |
| 11.0x | 39% / 5.1x | 43% / 6.1x | 48% / 7.0x | 50% / 7.5x | 51% / 7.9x |
| 12.0x | 35% / 4.4x | 40% / 5.3x | 44% / 6.2x | 46% / 6.6x | 48% / 7.0x |
Covenant Headroom (at 10x Entry, 6.5x Max Leverage)
Pro forma EBITDA can decline 8% before the 6.5x covenant trips. RCM uplift reduces leverage from 8.5x to 6.0x, adding 2.5 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 | $5.9M | — | $5.9M | 12.6% |
| Year 1 | $6.1M | +$1.6M | $7.7M | 16.5% |
| Year 2 | $6.3M | +$2.5M | $8.7M | 18.6% |
| Year 3 | $6.5M | +$2.5M | $8.9M | 19.0% |
| Year 4 | $6.6M | +$2.5M | $9.1M | 19.4% |
| Year 5 | $6.8M | +$2.5M | $9.3M | 19.8% |
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 | $469K | $704K | $939K | $1.1M |
| Denial Rate Reductio | $465K | $697K | $930K | $1.1M |
| A/R Days Reduction | $286K | $428K | $571K | $686K |
| Clean Claim Rate | $15K | $23K | $30K | $36K |
| Total | $1.2M | $1.9M | $2.5M | $3.0M |
Peer Context — Where This Hospital Sits
Key metrics vs 68 size-matched peers. Low percentile on margin/efficiency metrics = more room for improvement = larger bridge opportunity.
| Metric | Hospital | P25 | P50 | P75 | Percentile |
|---|---|---|---|---|---|
| Op Margin | 12.6% | -11.2% | -3.3% | 8.8% | P88 |
| Net-to-Gross | 42.1% | 33.5% | 41.7% | 50.7% | P54 |
| Occupancy | 10.9% | 13.7% | 27.8% | 49.7% | P19 |
| Rev/Bed | $2.0M | $652K | $1.4M | $2.3M | P67 |
| Exp/Bed | $1.7M | $689K | $1.5M | $2.3M | P60 |
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.