Bridge Realization Estimate
ML model predicts what fraction of the bridge is achievable (accuracy: 60%, n=5,839)
Expected realization: 63% of modeled bridge. Strengths: Commercial Payer %, Bed Count. Risks: Occupancy Rate, Net-to-Gross Ratio. Risk-adjusted uplift: $0.9M (vs $1.4M 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 | $519K | $519K | $0 | 12mo |
| Denial Rate Reduction | 12.0% DEFAULT | 6.5% BENCHMARK | $500K | $14K | $514K | $0 | 12mo |
| A/R Days Reduction | 52.00 DEFAULT | 38.00 BENCHMARK | $80K | $236K | $316K | $996K | 9mo |
| Clean Claim Rate | 88.0% DEFAULT | 96.0% BENCHMARK | $0 | $17K | $17K | $0 | 6mo |
| Net Collection Rate | 93.5% DEFAULT | 77.9% 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 | $130K | $260K | $389K | $519K | $519K | $519K | $519K |
| Denial Rate Reduction | $0 | $129K | $257K | $386K | $514K | $514K | $514K | $514K |
| A/R Days Reduction | $0 | $105K | $211K | $316K | $316K | $316K | $316K | $316K |
| Clean Claim Rate | $0 | $8K | $17K | $17K | $17K | $17K | $17K | $17K |
| Cumulative | $0 | $372K | $744K | $1.1M | $1.4M | $1.4M | $1.4M | $1.4M |
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 $1.4M is added at exit.
| Entry \ Exit | 9.0x | 10.0x | 11.0x | 11.5x | 12.0x |
|---|---|---|---|---|---|
| 8.0x | 94% / 27.7x | 99% / 31.1x | 103% / 34.5x | 105% / 36.2x | 107% / 38.0x |
| 9.0x | 89% / 24.2x | 94% / 27.3x | 98% / 30.3x | 100% / 31.9x | 102% / 33.4x |
| 10.0x | 85% / 21.5x | 89% / 24.2x | 93% / 27.0x | 95% / 28.4x | 97% / 29.7x |
| 11.0x | 81% / 19.2x | 85% / 21.7x | 89% / 24.2x | 91% / 25.5x | 93% / 26.7x |
| 12.0x | 77% / 17.4x | 81% / 19.6x | 85% / 21.9x | 87% / 23.1x | 89% / 24.2x |
Covenant Headroom (at 10x Entry, 6.5x Max Leverage)
Pro forma EBITDA can decline 68% before the 6.5x covenant trips. RCM uplift reduces leverage from 8.5x to 2.1x, adding 6.4 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 | $445K | — | $445K | 1.7% |
| Year 1 | $459K | +$911K | $1.4M | 5.3% |
| Year 2 | $472K | +$1.4M | $1.8M | 7.1% |
| Year 3 | $487K | +$1.4M | $1.9M | 7.1% |
| Year 4 | $501K | +$1.4M | $1.9M | 7.2% |
| Year 5 | $516K | +$1.4M | $1.9M | 7.2% |
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 | $260K | $389K | $519K | $623K |
| Denial Rate Reductio | $257K | $386K | $514K | $617K |
| A/R Days Reduction | $158K | $237K | $316K | $379K |
| Clean Claim Rate | $8K | $12K | $17K | $20K |
| Total | $683K | $1.0M | $1.4M | $1.6M |
Peer Context — Where This Hospital Sits
Key metrics vs 69 size-matched peers. Low percentile on margin/efficiency metrics = more room for improvement = larger bridge opportunity.
| Metric | Hospital | P25 | P50 | P75 | Percentile |
|---|---|---|---|---|---|
| Op Margin | 1.7% | -13.0% | -5.5% | 0.5% | P80 |
| Net-to-Gross | 69.6% | 63.1% | 71.3% | 77.9% | P38 |
| Occupancy | 14.4% | 12.2% | 17.6% | 24.9% | P32 |
| Rev/Bed | $1.6M | $809K | $1.3M | $1.8M | P65 |
| Exp/Bed | $1.6M | $845K | $1.4M | $2.0M | P61 |
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.