Bridge Realization Estimate
ML model predicts what fraction of the bridge is achievable (accuracy: 60%, n=5,839)
Expected realization: 69% of modeled bridge. Strengths: Commercial Payer %, Bed Count. Risks: Occupancy Rate. Risk-adjusted uplift: $0.9M (vs $1.4M 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 | $524K | $524K | $0 | 12mo |
| Denial Rate Reduction | 12.0% DEFAULT | 6.5% BENCHMARK | $504K | $14K | $518K | $0 | 12mo |
| A/R Days Reduction | 52.00 DEFAULT | 38.00 BENCHMARK | $80K | $238K | $319K | $1.0M | 9mo |
| Clean Claim Rate | 88.0% DEFAULT | 96.0% BENCHMARK | $0 | $17K | $17K | $0 | 6mo |
| Net Collection Rate | 93.5% DEFAULT | 58.0% 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 | $131K | $262K | $393K | $524K | $524K | $524K | $524K |
| Denial Rate Reduction | $0 | $130K | $259K | $389K | $518K | $518K | $518K | $518K |
| A/R Days Reduction | $0 | $106K | $212K | $319K | $319K | $319K | $319K | $319K |
| Clean Claim Rate | $0 | $8K | $17K | $17K | $17K | $17K | $17K | $17K |
| Cumulative | $0 | $375K | $750K | $1.1M | $1.4M | $1.4M | $1.4M | $1.4M |
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 $1.4M is added at exit.
| Entry \ Exit | 9.0x | 10.0x | 11.0x | 11.5x | 12.0x |
|---|---|---|---|---|---|
| 8.0x | 96% / 28.6x | 100% / 32.2x | 104% / 35.7x | 106% / 37.5x | 108% / 39.2x |
| 9.0x | 90% / 25.1x | 95% / 28.2x | 99% / 31.4x | 101% / 33.0x | 103% / 34.5x |
| 10.0x | 86% / 22.2x | 90% / 25.1x | 95% / 27.9x | 97% / 29.3x | 98% / 30.8x |
| 11.0x | 82% / 19.9x | 86% / 22.5x | 90% / 25.1x | 92% / 26.4x | 94% / 27.7x |
| 12.0x | 78% / 18.0x | 83% / 20.4x | 87% / 22.7x | 89% / 23.9x | 90% / 25.1x |
Covenant Headroom (at 10x Entry, 6.5x Max Leverage)
Pro forma EBITDA can decline 69% before the 6.5x covenant trips. RCM uplift reduces leverage from 8.5x to 2.0x, adding 6.4 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 | $431K | — | $431K | 1.6% |
| Year 1 | $443K | +$918K | $1.4M | 5.2% |
| Year 2 | $457K | +$1.4M | $1.8M | 7.0% |
| Year 3 | $470K | +$1.4M | $1.8M | 7.1% |
| Year 4 | $485K | +$1.4M | $1.9M | 7.1% |
| Year 5 | $499K | +$1.4M | $1.9M | 7.2% |
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 | $262K | $393K | $524K | $628K |
| Denial Rate Reductio | $259K | $389K | $518K | $622K |
| A/R Days Reduction | $159K | $239K | $319K | $382K |
| Clean Claim Rate | $8K | $13K | $17K | $20K |
| Total | $689K | $1.0M | $1.4M | $1.7M |
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 | 1.6% | -25.6% | -14.9% | -5.9% | P87 |
| Net-to-Gross | 33.1% | 30.7% | 46.5% | 58.0% | P32 |
| Occupancy | 46.4% | 21.9% | 35.6% | 50.6% | P71 |
| Rev/Bed | $1.0M | $384K | $658K | $922K | P76 |
| Exp/Bed | $1.0M | $464K | $752K | $1.1M | P71 |
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.