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 %, Payer Diversity. Risks: Net-to-Gross Ratio, Occupancy Rate. Risk-adjusted uplift: $0.7M (vs $1.0M 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 | $378K | $378K | $0 | 12mo |
| Denial Rate Reduction | 12.0% DEFAULT | 6.5% BENCHMARK | $364K | $10K | $375K | $0 | 12mo |
| A/R Days Reduction | 52.00 DEFAULT | 38.00 BENCHMARK | $58K | $172K | $230K | $726K | 9mo |
| Clean Claim Rate | 88.0% DEFAULT | 96.0% BENCHMARK | $0 | $12K | $12K | $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 | $95K | $189K | $284K | $378K | $378K | $378K | $378K |
| Denial Rate Reduction | $0 | $94K | $187K | $281K | $375K | $375K | $375K | $375K |
| A/R Days Reduction | $0 | $77K | $153K | $230K | $230K | $230K | $230K | $230K |
| Clean Claim Rate | $0 | $6K | $12K | $12K | $12K | $12K | $12K | $12K |
| Cumulative | $0 | $271K | $542K | $807K | $995K | $995K | $995K | $995K |
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 $995K is added at exit.
| Entry \ Exit | 9.0x | 10.0x | 11.0x | 11.5x | 12.0x |
|---|---|---|---|---|---|
| 8.0x | 108% / 39.4x | 113% / 44.1x | 118% / 48.9x | 120% / 51.2x | 122% / 53.6x |
| 9.0x | 103% / 34.7x | 108% / 38.9x | 112% / 43.1x | 114% / 45.2x | 116% / 47.3x |
| 10.0x | 99% / 30.9x | 103% / 34.7x | 107% / 38.5x | 110% / 40.4x | 111% / 42.2x |
| 11.0x | 94% / 27.8x | 99% / 31.2x | 103% / 34.7x | 105% / 36.4x | 107% / 38.1x |
| 12.0x | 91% / 25.2x | 95% / 28.4x | 99% / 31.5x | 101% / 33.1x | 103% / 34.7x |
Covenant Headroom (at 10x Entry, 6.5x Max Leverage)
Pro forma EBITDA can decline 77% before the 6.5x covenant trips. RCM uplift reduces leverage from 8.5x to 1.5x, adding 7.0 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 | $213K | — | $213K | 1.1% |
| Year 1 | $219K | +$663K | $883K | 4.7% |
| Year 2 | $226K | +$995K | $1.2M | 6.5% |
| Year 3 | $233K | +$995K | $1.2M | 6.5% |
| Year 4 | $240K | +$995K | $1.2M | 6.5% |
| Year 5 | $247K | +$995K | $1.2M | 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 | $189K | $284K | $378K | $454K |
| Denial Rate Reductio | $187K | $281K | $375K | $449K |
| A/R Days Reduction | $115K | $173K | $230K | $276K |
| Clean Claim Rate | $6K | $9K | $12K | $15K |
| Total | $498K | $746K | $995K | $1.2M |
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 | 1.1% | -25.6% | -14.9% | -5.9% | P85 |
| Net-to-Gross | 73.0% | 30.7% | 46.5% | 58.0% | P91 |
| Occupancy | 46.7% | 21.9% | 35.6% | 50.6% | P72 |
| Rev/Bed | $757K | $384K | $658K | $922K | P57 |
| Exp/Bed | $748K | $464K | $752K | $1.1M | P49 |
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.