Bridge Realization Estimate
ML model predicts what fraction of the bridge is achievable (accuracy: 60%, n=5,839)
Expected realization: 61% of modeled bridge. Strengths: Bed Count. Risks: Occupancy Rate, Revenue per Bed. Risk-adjusted uplift: $0.3M (vs $0.5M 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 |
|---|---|---|---|---|---|---|---|
| Denial Rate Reduction | 12.0% DEFAULT | 6.5% BENCHMARK | $177K | $8K | $185K | $0 | 12mo |
| Cost to Collect | 4.5% DEFAULT | 2.5% BENCHMARK | $0 | $184K | $184K | $0 | 12mo |
| A/R Days Reduction | 52.00 DEFAULT | 38.00 BENCHMARK | $28K | $84K | $112K | $353K | 9mo |
| Clean Claim Rate | 88.0% DEFAULT | 96.0% BENCHMARK | $0 | $10K | $10K | $0 | 6mo |
| Net Collection Rate | 93.5% DEFAULT | 46.5% 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 |
|---|---|---|---|---|---|---|---|---|
| Denial Rate Reduction | $0 | $46K | $93K | $139K | $185K | $185K | $185K | $185K |
| Cost to Collect | $0 | $46K | $92K | $138K | $184K | $184K | $184K | $184K |
| A/R Days Reduction | $0 | $37K | $75K | $112K | $112K | $112K | $112K | $112K |
| Clean Claim Rate | $0 | $5K | $10K | $10K | $10K | $10K | $10K | $10K |
| Cumulative | $0 | $134K | $269K | $398K | $491K | $491K | $491K | $491K |
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 $491K is added at exit.
| Entry \ Exit | 9.0x | 10.0x | 11.0x | 11.5x | 12.0x |
|---|---|---|---|---|---|
| 8.0x | 66% / 12.5x | 70% / 14.2x | 74% / 16.0x | 76% / 16.9x | 78% / 17.7x |
| 9.0x | 61% / 10.7x | 65% / 12.3x | 69% / 13.8x | 71% / 14.6x | 73% / 15.4x |
| 10.0x | 56% / 9.3x | 61% / 10.7x | 65% / 12.1x | 67% / 12.8x | 68% / 13.5x |
| 11.0x | 52% / 8.2x | 57% / 9.5x | 61% / 10.7x | 63% / 11.4x | 64% / 12.0x |
| 12.0x | 49% / 7.2x | 53% / 8.4x | 57% / 9.6x | 59% / 10.2x | 61% / 10.7x |
Covenant Headroom (at 10x Entry, 6.5x Max Leverage)
Pro forma EBITDA can decline 35% before the 6.5x covenant trips. RCM uplift reduces leverage from 8.5x to 4.2x, adding 4.2 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 | $494K | — | $494K | 5.4% |
| Year 1 | $509K | +$327K | $836K | 9.1% |
| Year 2 | $524K | +$491K | $1.0M | 11.0% |
| Year 3 | $540K | +$491K | $1.0M | 11.2% |
| Year 4 | $556K | +$491K | $1.0M | 11.4% |
| Year 5 | $573K | +$491K | $1.1M | 11.6% |
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% |
|---|---|---|---|---|
| Denial Rate Reductio | $93K | $139K | $185K | $222K |
| Cost to Collect | $92K | $138K | $184K | $221K |
| A/R Days Reduction | $56K | $84K | $112K | $134K |
| Clean Claim Rate | $5K | $7K | $10K | $12K |
| Total | $245K | $368K | $491K | $589K |
Peer Context — Where This Hospital Sits
Key metrics vs 75 size-matched peers. Low percentile on margin/efficiency metrics = more room for improvement = larger bridge opportunity.
| Metric | Hospital | P25 | P50 | P75 | Percentile |
|---|---|---|---|---|---|
| Op Margin | 5.4% | -12.4% | -3.3% | 8.3% | P68 |
| Net-to-Gross | 59.5% | 31.4% | 37.3% | 46.5% | P89 |
| Occupancy | 29.6% | 17.4% | 36.4% | 55.1% | P43 |
| Rev/Bed | $219K | $646K | $1.4M | $2.3M | P1 |
| Exp/Bed | $207K | $617K | $1.5M | $2.3M | P1 |
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.