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, Bed Count. Risks: Revenue per Bed. Risk-adjusted uplift: $0.9M (vs $1.3M 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 | $482K | $482K | $0 | 12mo |
| Denial Rate Reduction | 12.0% DEFAULT | 6.5% BENCHMARK | $464K | $13K | $478K | $0 | 12mo |
| A/R Days Reduction | 52.00 DEFAULT | 38.00 BENCHMARK | $74K | $219K | $294K | $925K | 9mo |
| Clean Claim Rate | 88.0% DEFAULT | 96.0% BENCHMARK | $0 | $15K | $15K | $0 | 6mo |
| Net Collection Rate | 93.5% DEFAULT | 47.7% 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 | $121K | $241K | $362K | $482K | $482K | $482K | $482K |
| Denial Rate Reduction | $0 | $119K | $239K | $358K | $478K | $478K | $478K | $478K |
| A/R Days Reduction | $0 | $98K | $196K | $294K | $294K | $294K | $294K | $294K |
| Clean Claim Rate | $0 | $8K | $15K | $15K | $15K | $15K | $15K | $15K |
| Cumulative | $0 | $346K | $691K | $1.0M | $1.3M | $1.3M | $1.3M | $1.3M |
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 $1.3M is added at exit.
| Entry \ Exit | 9.0x | 10.0x | 11.0x | 11.5x | 12.0x |
|---|---|---|---|---|---|
| 8.0x | 139% / 78.5x | 145% / 87.5x | 149% / 96.6x | 152% / 101.2x | 154% / 105.7x |
| 9.0x | 133% / 69.4x | 139% / 77.5x | 143% / 85.5x | 146% / 89.6x | 148% / 93.6x |
| 10.0x | 128% / 62.1x | 133% / 69.4x | 138% / 76.7x | 140% / 80.3x | 143% / 83.9x |
| 11.0x | 124% / 56.2x | 129% / 62.8x | 133% / 69.4x | 136% / 72.7x | 138% / 76.0x |
| 12.0x | 120% / 51.2x | 125% / 57.3x | 129% / 63.3x | 131% / 66.4x | 133% / 69.4x |
Covenant Headroom (at 10x Entry, 6.5x Max Leverage)
Pro forma EBITDA can decline 88% before the 6.5x covenant trips. RCM uplift reduces leverage from 8.5x to 0.8x, adding 7.7 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 | $127K | — | $127K | 0.5% |
| Year 1 | $130K | +$846K | $976K | 4.0% |
| Year 2 | $134K | +$1.3M | $1.4M | 5.8% |
| Year 3 | $138K | +$1.3M | $1.4M | 5.8% |
| Year 4 | $143K | +$1.3M | $1.4M | 5.9% |
| Year 5 | $147K | +$1.3M | $1.4M | 5.9% |
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 | $241K | $362K | $482K | $579K |
| Denial Rate Reductio | $239K | $358K | $478K | $573K |
| A/R Days Reduction | $147K | $220K | $294K | $352K |
| Clean Claim Rate | $8K | $12K | $15K | $19K |
| Total | $634K | $952K | $1.3M | $1.5M |
Peer Context — Where This Hospital Sits
Key metrics vs 65 size-matched peers. Low percentile on margin/efficiency metrics = more room for improvement = larger bridge opportunity.
| Metric | Hospital | P25 | P50 | P75 | Percentile |
|---|---|---|---|---|---|
| Op Margin | 0.5% | -16.3% | -9.2% | 4.9% | P69 |
| Net-to-Gross | 18.8% | 29.4% | 35.6% | 47.7% | P6 |
| Occupancy | 83.9% | 27.7% | 42.3% | 63.5% | P91 |
| Rev/Bed | $548K | $603K | $1.0M | $1.8M | P18 |
| Exp/Bed | $545K | $646K | $1.1M | $1.7M | P18 |
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.