Bridge Realization Estimate
ML model predicts what fraction of the bridge is achievable (accuracy: 60%, n=5,839)
Expected realization: 73% of modeled bridge. Strengths: Occupancy Rate, Bed Count. Risks: Revenue per Bed. Risk-adjusted uplift: $0.2M (vs $0.3M 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 |
|---|---|---|---|---|---|---|---|
| Denial Rate Reduction | 12.0% DEFAULT | 6.5% BENCHMARK | $91K | $8K | $100K | $0 | 12mo |
| Cost to Collect | 4.5% DEFAULT | 2.5% BENCHMARK | $0 | $95K | $95K | $0 | 12mo |
| A/R Days Reduction | 52.00 DEFAULT | 38.00 BENCHMARK | $15K | $43K | $58K | $182K | 9mo |
| Clean Claim Rate | 88.0% DEFAULT | 96.0% BENCHMARK | $0 | $10K | $10K | $0 | 6mo |
| Net Collection Rate | 93.5% DEFAULT | 52.3% 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 |
|---|---|---|---|---|---|---|---|---|
| Denial Rate Reduction | $0 | $25K | $50K | $75K | $100K | $100K | $100K | $100K |
| Cost to Collect | $0 | $24K | $47K | $71K | $95K | $95K | $95K | $95K |
| A/R Days Reduction | $0 | $19K | $38K | $58K | $58K | $58K | $58K | $58K |
| Clean Claim Rate | $0 | $5K | $10K | $10K | $10K | $10K | $10K | $10K |
| Cumulative | $0 | $73K | $145K | $213K | $262K | $262K | $262K | $262K |
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 $262K is added at exit.
| Entry \ Exit | 9.0x | 10.0x | 11.0x | 11.5x | 12.0x |
|---|---|---|---|---|---|
| 8.0x | 54% / 8.8x | 59% / 10.1x | 63% / 11.4x | 65% / 12.1x | 66% / 12.8x |
| 9.0x | 49% / 7.4x | 54% / 8.6x | 58% / 9.8x | 60% / 10.4x | 62% / 11.0x |
| 10.0x | 45% / 6.4x | 49% / 7.4x | 53% / 8.5x | 55% / 9.0x | 57% / 9.6x |
| 11.0x | 41% / 5.5x | 45% / 6.5x | 49% / 7.4x | 51% / 7.9x | 53% / 8.4x |
| 12.0x | 37% / 4.8x | 41% / 5.7x | 46% / 6.5x | 48% / 7.0x | 49% / 7.4x |
Covenant Headroom (at 10x Entry, 6.5x Max Leverage)
Pro forma EBITDA can decline 12% before the 6.5x covenant trips. RCM uplift reduces leverage from 8.5x to 5.7x, adding 2.8 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 | $539K | — | $539K | 11.4% |
| Year 1 | $556K | +$174K | $730K | 15.4% |
| Year 2 | $572K | +$262K | $834K | 17.6% |
| Year 3 | $589K | +$262K | $851K | 18.0% |
| Year 4 | $607K | +$262K | $869K | 18.3% |
| Year 5 | $625K | +$262K | $887K | 18.7% |
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% |
|---|---|---|---|---|
| Denial Rate Reductio | $50K | $75K | $100K | $119K |
| Cost to Collect | $47K | $71K | $95K | $114K |
| A/R Days Reduction | $29K | $43K | $58K | $69K |
| Clean Claim Rate | $5K | $7K | $10K | $12K |
| Total | $131K | $196K | $262K | $314K |
Peer Context — Where This Hospital Sits
Key metrics vs 42 size-matched peers. Low percentile on margin/efficiency metrics = more room for improvement = larger bridge opportunity.
| Metric | Hospital | P25 | P50 | P75 | Percentile |
|---|---|---|---|---|---|
| Op Margin | 11.4% | -17.7% | -9.4% | -0.7% | P93 |
| Net-to-Gross | 42.9% | 35.4% | 42.2% | 52.3% | P50 |
| Occupancy | 83.7% | 19.8% | 31.4% | 43.5% | P95 |
| Rev/Bed | $296K | $639K | $987K | $1.8M | P5 |
| Exp/Bed | $263K | $748K | $1.1M | $1.8M | P5 |
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.