Bridge Realization Estimate
ML model predicts what fraction of the bridge is achievable (accuracy: 60%, n=5,839)
Expected realization: 74% of modeled bridge. Strengths: Occupancy Rate. Risks: Revenue per Bed. Risk-adjusted uplift: $1.8M (vs $2.4M 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 | $909K | $909K | $0 | 12mo |
| Denial Rate Reduction | 12.0% DEFAULT | 6.5% BENCHMARK | $875K | $25K | $900K | $0 | 12mo |
| A/R Days Reduction | 52.00 DEFAULT | 38.00 BENCHMARK | $140K | $414K | $553K | $1.7M | 9mo |
| Clean Claim Rate | 88.0% DEFAULT | 96.0% BENCHMARK | $0 | $29K | $29K | $0 | 6mo |
| Net Collection Rate | 93.5% DEFAULT | 40.5% 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 | $227K | $455K | $682K | $909K | $909K | $909K | $909K |
| Denial Rate Reduction | $0 | $225K | $450K | $675K | $900K | $900K | $900K | $900K |
| A/R Days Reduction | $0 | $184K | $369K | $553K | $553K | $553K | $553K | $553K |
| Clean Claim Rate | $0 | $15K | $29K | $29K | $29K | $29K | $29K | $29K |
| Cumulative | $0 | $651K | $1.3M | $1.9M | $2.4M | $2.4M | $2.4M | $2.4M |
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 $2.4M is added at exit.
| Entry \ Exit | 9.0x | 10.0x | 11.0x | 11.5x | 12.0x |
|---|---|---|---|---|---|
| 8.0x | 151% / 100.3x | 157% / 111.8x | 162% / 123.3x | 164% / 129.0x | 167% / 134.8x |
| 9.0x | 145% / 88.8x | 151% / 99.0x | 156% / 109.2x | 158% / 114.3x | 160% / 119.4x |
| 10.0x | 140% / 79.6x | 145% / 88.8x | 150% / 98.0x | 152% / 102.6x | 155% / 107.2x |
| 11.0x | 135% / 72.0x | 140% / 80.4x | 145% / 88.8x | 148% / 93.0x | 150% / 97.1x |
| 12.0x | 131% / 65.8x | 136% / 73.4x | 141% / 81.1x | 143% / 84.9x | 145% / 88.8x |
Covenant Headroom (at 10x Entry, 6.5x Max Leverage)
Pro forma EBITDA can decline 91% before the 6.5x covenant trips. RCM uplift reduces leverage from 8.5x to 0.6x, adding 7.9 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 | $184K | — | $184K | 0.4% |
| Year 1 | $190K | +$1.6M | $1.8M | 3.9% |
| Year 2 | $195K | +$2.4M | $2.6M | 5.7% |
| Year 3 | $201K | +$2.4M | $2.6M | 5.7% |
| Year 4 | $207K | +$2.4M | $2.6M | 5.7% |
| Year 5 | $213K | +$2.4M | $2.6M | 5.7% |
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 | $455K | $682K | $909K | $1.1M |
| Denial Rate Reductio | $450K | $675K | $900K | $1.1M |
| A/R Days Reduction | $277K | $415K | $553K | $664K |
| Clean Claim Rate | $15K | $22K | $29K | $35K |
| Total | $1.2M | $1.8M | $2.4M | $2.9M |
Peer Context — Where This Hospital Sits
Key metrics vs 51 size-matched peers. Low percentile on margin/efficiency metrics = more room for improvement = larger bridge opportunity.
| Metric | Hospital | P25 | P50 | P75 | Percentile |
|---|---|---|---|---|---|
| Op Margin | 0.4% | -16.3% | -6.4% | 10.3% | P61 |
| Net-to-Gross | 18.7% | 25.0% | 32.9% | 40.5% | P6 |
| Occupancy | 82.6% | 42.4% | 53.7% | 74.8% | P84 |
| Rev/Bed | $640K | $383K | $1.1M | $1.6M | P35 |
| Exp/Bed | $638K | $422K | $1.1M | $1.7M | P33 |
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.