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: Commercial Payer %, Bed Count. Risks: Occupancy Rate, Revenue per Bed. Risk-adjusted uplift: $0.4M (vs $0.7M 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 | $279K | $279K | $0 | 12mo |
| Denial Rate Reduction | 12.0% DEFAULT | 6.5% BENCHMARK | $268K | $8K | $277K | $0 | 12mo |
| A/R Days Reduction | 52.00 DEFAULT | 38.00 BENCHMARK | $43K | $127K | $170K | $535K | 9mo |
| Clean Claim Rate | 88.0% DEFAULT | 96.0% BENCHMARK | $0 | $10K | $10K | $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 | $70K | $139K | $209K | $279K | $279K | $279K | $279K |
| Denial Rate Reduction | $0 | $69K | $138K | $207K | $277K | $277K | $277K | $277K |
| A/R Days Reduction | $0 | $57K | $113K | $170K | $170K | $170K | $170K | $170K |
| Clean Claim Rate | $0 | $5K | $10K | $10K | $10K | $10K | $10K | $10K |
| Cumulative | $0 | $200K | $400K | $596K | $734K | $734K | $734K | $734K |
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 $734K is added at exit.
| Entry \ Exit | 9.0x | 10.0x | 11.0x | 11.5x | 12.0x |
|---|---|---|---|---|---|
| 8.0x | 131% / 65.6x | 136% / 73.3x | 141% / 80.9x | 143% / 84.7x | 145% / 88.6x |
| 9.0x | 125% / 58.0x | 130% / 64.8x | 135% / 71.6x | 137% / 75.0x | 139% / 78.4x |
| 10.0x | 120% / 51.8x | 125% / 58.0x | 130% / 64.1x | 132% / 67.2x | 134% / 70.2x |
| 11.0x | 116% / 46.8x | 121% / 52.4x | 125% / 58.0x | 127% / 60.8x | 129% / 63.5x |
| 12.0x | 112% / 42.7x | 117% / 47.8x | 121% / 52.9x | 123% / 55.4x | 125% / 58.0x |
Covenant Headroom (at 10x Entry, 6.5x Max Leverage)
Pro forma EBITDA can decline 86% before the 6.5x covenant trips. RCM uplift reduces leverage from 8.5x to 0.9x, adding 7.5 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 | $89K | — | $89K | 0.6% |
| Year 1 | $92K | +$490K | $581K | 4.2% |
| Year 2 | $94K | +$734K | $829K | 5.9% |
| Year 3 | $97K | +$734K | $832K | 6.0% |
| Year 4 | $100K | +$734K | $835K | 6.0% |
| Year 5 | $103K | +$734K | $838K | 6.0% |
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 | $139K | $209K | $279K | $334K |
| Denial Rate Reductio | $138K | $207K | $277K | $332K |
| A/R Days Reduction | $85K | $127K | $170K | $204K |
| Clean Claim Rate | $5K | $7K | $10K | $12K |
| Total | $367K | $551K | $734K | $881K |
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 | 0.6% | -25.6% | -14.9% | -5.9% | P82 |
| Net-to-Gross | 76.6% | 30.7% | 46.5% | 58.0% | P96 |
| Occupancy | 12.0% | 21.9% | 35.6% | 50.6% | P10 |
| Rev/Bed | $557K | $384K | $658K | $922K | P38 |
| Exp/Bed | $554K | $464K | $752K | $1.1M | P31 |
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.