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: Revenue per Bed, Bed Count. Risks: Occupancy Rate. Risk-adjusted uplift: $3.0M (vs $4.4M 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 | $1.7M | $1.7M | $0 | 12mo |
| Denial Rate Reduction | 12.0% DEFAULT | 6.5% BENCHMARK | $1.6M | $46K | $1.7M | $0 | 12mo |
| A/R Days Reduction | 52.00 DEFAULT | 38.00 BENCHMARK | $256K | $760K | $1.0M | $3.2M | 9mo |
| Clean Claim Rate | 88.0% DEFAULT | 96.0% BENCHMARK | $0 | $53K | $53K | $0 | 6mo |
| Net Collection Rate | 93.5% DEFAULT | 60.6% 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 | $417K | $835K | $1.3M | $1.7M | $1.7M | $1.7M | $1.7M |
| Denial Rate Reduction | $0 | $413K | $826K | $1.2M | $1.7M | $1.7M | $1.7M | $1.7M |
| A/R Days Reduction | $0 | $339K | $677K | $1.0M | $1.0M | $1.0M | $1.0M | $1.0M |
| Clean Claim Rate | $0 | $27K | $53K | $53K | $53K | $53K | $53K | $53K |
| Cumulative | $0 | $1.2M | $2.4M | $3.6M | $4.4M | $4.4M | $4.4M | $4.4M |
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 $4.4M is added at exit.
| Entry \ Exit | 9.0x | 10.0x | 11.0x | 11.5x | 12.0x |
|---|---|---|---|---|---|
| 8.0x | 107% / 38.3x | 112% / 42.9x | 116% / 47.5x | 119% / 49.8x | 121% / 52.1x |
| 9.0x | 102% / 33.7x | 107% / 37.8x | 111% / 41.9x | 113% / 43.9x | 115% / 46.0x |
| 10.0x | 97% / 30.0x | 102% / 33.7x | 106% / 37.4x | 108% / 39.2x | 110% / 41.1x |
| 11.0x | 93% / 27.0x | 98% / 30.3x | 102% / 33.7x | 104% / 35.4x | 106% / 37.0x |
| 12.0x | 90% / 24.4x | 94% / 27.5x | 98% / 30.6x | 100% / 32.1x | 102% / 33.7x |
Covenant Headroom (at 10x Entry, 6.5x Max Leverage)
Pro forma EBITDA can decline 76% before the 6.5x covenant trips. RCM uplift reduces leverage from 8.5x to 1.5x, adding 6.9 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 | $971K | — | $971K | 1.2% |
| Year 1 | $1.0M | +$2.9M | $3.9M | 4.7% |
| Year 2 | $1.0M | +$4.4M | $5.4M | 6.5% |
| Year 3 | $1.1M | +$4.4M | $5.5M | 6.5% |
| Year 4 | $1.1M | +$4.4M | $5.5M | 6.6% |
| Year 5 | $1.1M | +$4.4M | $5.5M | 6.6% |
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 | $835K | $1.3M | $1.7M | $2.0M |
| Denial Rate Reductio | $826K | $1.2M | $1.7M | $2.0M |
| A/R Days Reduction | $508K | $762K | $1.0M | $1.2M |
| Clean Claim Rate | $27K | $40K | $53K | $64K |
| Total | $2.2M | $3.3M | $4.4M | $5.3M |
Peer Context — Where This Hospital Sits
Key metrics vs 70 size-matched peers. Low percentile on margin/efficiency metrics = more room for improvement = larger bridge opportunity.
| Metric | Hospital | P25 | P50 | P75 | Percentile |
|---|---|---|---|---|---|
| Op Margin | 1.2% | -8.4% | -3.1% | 2.2% | P68 |
| Net-to-Gross | 30.4% | 44.6% | 52.8% | 60.6% | P1 |
| Occupancy | 46.5% | 21.5% | 32.9% | 43.8% | P78 |
| Rev/Bed | $2.5M | $1.3M | $2.2M | $3.0M | P64 |
| Exp/Bed | $2.4M | $1.3M | $2.1M | $3.1M | P61 |
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.