Bridge Realization Estimate
ML model predicts what fraction of the bridge is achievable (accuracy: 60%, n=5,839)
Expected realization: 58% of modeled bridge. Strengths: Bed Count. Risks: Occupancy Rate, Revenue per Bed. Risk-adjusted uplift: $0.4M (vs $0.8M 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 | $294K | $294K | $0 | 12mo |
| Denial Rate Reduction | 12.0% DEFAULT | 6.5% BENCHMARK | $283K | $8K | $291K | $0 | 12mo |
| A/R Days Reduction | 52.00 DEFAULT | 38.00 BENCHMARK | $45K | $134K | $179K | $564K | 9mo |
| Clean Claim Rate | 88.0% DEFAULT | 96.0% BENCHMARK | $0 | $10K | $10K | $0 | 6mo |
| Net Collection Rate | 93.5% DEFAULT | 77.8% 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 | $74K | $147K | $221K | $294K | $294K | $294K | $294K |
| Denial Rate Reduction | $0 | $73K | $146K | $219K | $291K | $291K | $291K | $291K |
| A/R Days Reduction | $0 | $60K | $119K | $179K | $179K | $179K | $179K | $179K |
| Clean Claim Rate | $0 | $5K | $10K | $10K | $10K | $10K | $10K | $10K |
| Cumulative | $0 | $211K | $422K | $628K | $774K | $774K | $774K | $774K |
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 $774K is added at exit.
| Entry \ Exit | 9.0x | 10.0x | 11.0x | 11.5x | 12.0x |
|---|---|---|---|---|---|
| 8.0x | 118% / 49.6x | 123% / 55.5x | 128% / 61.4x | 130% / 64.3x | 132% / 67.2x |
| 9.0x | 113% / 43.7x | 118% / 49.0x | 122% / 54.2x | 124% / 56.8x | 126% / 59.4x |
| 10.0x | 108% / 39.0x | 113% / 43.7x | 117% / 48.4x | 119% / 50.8x | 121% / 53.1x |
| 11.0x | 104% / 35.2x | 109% / 39.5x | 113% / 43.7x | 115% / 45.9x | 117% / 48.0x |
| 12.0x | 100% / 32.0x | 105% / 35.9x | 109% / 39.8x | 111% / 41.8x | 113% / 43.7x |
Covenant Headroom (at 10x Entry, 6.5x Max Leverage)
Pro forma EBITDA can decline 82% before the 6.5x covenant trips. RCM uplift reduces leverage from 8.5x to 1.2x, adding 7.3 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 | $128K | — | $128K | 0.9% |
| Year 1 | $131K | +$516K | $648K | 4.4% |
| Year 2 | $135K | +$774K | $910K | 6.2% |
| Year 3 | $139K | +$774K | $914K | 6.2% |
| Year 4 | $144K | +$774K | $918K | 6.2% |
| Year 5 | $148K | +$774K | $922K | 6.3% |
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 | $147K | $221K | $294K | $353K |
| Denial Rate Reductio | $146K | $219K | $291K | $350K |
| A/R Days Reduction | $90K | $134K | $179K | $215K |
| Clean Claim Rate | $5K | $7K | $10K | $12K |
| Total | $387K | $581K | $774K | $929K |
Peer Context — Where This Hospital Sits
Key metrics vs 66 size-matched peers. Low percentile on margin/efficiency metrics = more room for improvement = larger bridge opportunity.
| Metric | Hospital | P25 | P50 | P75 | Percentile |
|---|---|---|---|---|---|
| Op Margin | 0.9% | -12.9% | -4.8% | 0.8% | P74 |
| Net-to-Gross | 77.2% | 61.2% | 70.3% | 77.8% | P70 |
| Occupancy | 15.5% | 11.6% | 18.2% | 25.7% | P35 |
| Rev/Bed | $588K | $763K | $1.3M | $1.9M | P18 |
| Exp/Bed | $583K | $789K | $1.4M | $2.1M | P17 |
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.