Bridge Realization Estimate
ML model predicts what fraction of the bridge is achievable (accuracy: 60%, n=5,839)
Expected realization: 71% of modeled bridge. Strengths: Occupancy Rate, Bed Count. Risks: Revenue per Bed. Risk-adjusted uplift: $0.5M (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 | $273K | $273K | $0 | 12mo |
| Denial Rate Reduction | 12.0% DEFAULT | 6.5% BENCHMARK | $263K | $8K | $271K | $0 | 12mo |
| A/R Days Reduction | 52.00 DEFAULT | 38.00 BENCHMARK | $42K | $124K | $166K | $523K | 9mo |
| Clean Claim Rate | 88.0% DEFAULT | 96.0% BENCHMARK | $0 | $10K | $10K | $0 | 6mo |
| Net Collection Rate | 93.5% DEFAULT | 53.2% 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 | $68K | $136K | $205K | $273K | $273K | $273K | $273K |
| Denial Rate Reduction | $0 | $68K | $135K | $203K | $271K | $271K | $271K | $271K |
| A/R Days Reduction | $0 | $55K | $111K | $166K | $166K | $166K | $166K | $166K |
| Clean Claim Rate | $0 | $5K | $10K | $10K | $10K | $10K | $10K | $10K |
| Cumulative | $0 | $196K | $392K | $584K | $720K | $720K | $720K | $720K |
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 $720K is added at exit.
| Entry \ Exit | 9.0x | 10.0x | 11.0x | 11.5x | 12.0x |
|---|---|---|---|---|---|
| 8.0x | 49% / 7.3x | 53% / 8.4x | 57% / 9.6x | 59% / 10.2x | 61% / 10.8x |
| 9.0x | 44% / 6.1x | 48% / 7.2x | 52% / 8.2x | 54% / 8.7x | 56% / 9.2x |
| 10.0x | 39% / 5.2x | 44% / 6.1x | 48% / 7.0x | 50% / 7.5x | 52% / 8.0x |
| 11.0x | 35% / 4.4x | 39% / 5.3x | 44% / 6.1x | 46% / 6.5x | 47% / 7.0x |
| 12.0x | 30% / 3.8x | 35% / 4.5x | 40% / 5.3x | 42% / 5.7x | 44% / 6.1x |
Covenant Headroom (at 10x Entry, 6.5x Max Leverage)
Pro forma EBITDA can decline -2% before the 6.5x covenant trips. RCM uplift reduces leverage from 8.5x to 6.6x, adding 1.9 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 | $2.6M | — | $2.6M | 18.8% |
| Year 1 | $2.6M | +$480K | $3.1M | 22.8% |
| Year 2 | $2.7M | +$720K | $3.4M | 25.2% |
| Year 3 | $2.8M | +$720K | $3.5M | 25.8% |
| Year 4 | $2.9M | +$720K | $3.6M | 26.4% |
| Year 5 | $3.0M | +$720K | $3.7M | 27.0% |
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 | $136K | $205K | $273K | $328K |
| Denial Rate Reductio | $135K | $203K | $271K | $325K |
| A/R Days Reduction | $83K | $125K | $166K | $199K |
| Clean Claim Rate | $5K | $7K | $10K | $12K |
| Total | $360K | $540K | $720K | $863K |
Peer Context — Where This Hospital Sits
Key metrics vs 63 size-matched peers. Low percentile on margin/efficiency metrics = more room for improvement = larger bridge opportunity.
| Metric | Hospital | P25 | P50 | P75 | Percentile |
|---|---|---|---|---|---|
| Op Margin | 18.8% | -22.3% | -13.0% | 0.2% | P95 |
| Net-to-Gross | 55.7% | 25.8% | 41.2% | 53.2% | P77 |
| Occupancy | 74.3% | 24.5% | 36.9% | 50.9% | P89 |
| Rev/Bed | $303K | $485K | $648K | $868K | P15 |
| Exp/Bed | $246K | $457K | $728K | $974K | P10 |
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.