Bridge Realization Estimate
ML model predicts what fraction of the bridge is achievable (accuracy: 60%, n=5,839)
Expected realization: 64% of modeled bridge. Strengths: Bed Count, Revenue per Bed. Risks: Occupancy Rate, Net-to-Gross Ratio. Risk-adjusted uplift: $1.5M (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 | $897K | $897K | $0 | 12mo |
| Denial Rate Reduction | 12.0% DEFAULT | 6.5% BENCHMARK | $863K | $25K | $888K | $0 | 12mo |
| A/R Days Reduction | 52.00 DEFAULT | 38.00 BENCHMARK | $138K | $408K | $546K | $1.7M | 9mo |
| Clean Claim Rate | 88.0% DEFAULT | 96.0% BENCHMARK | $0 | $29K | $29K | $0 | 6mo |
| Net Collection Rate | 93.5% DEFAULT | 78.8% 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 | $224K | $448K | $673K | $897K | $897K | $897K | $897K |
| Denial Rate Reduction | $0 | $222K | $444K | $666K | $888K | $888K | $888K | $888K |
| A/R Days Reduction | $0 | $182K | $364K | $546K | $546K | $546K | $546K | $546K |
| Clean Claim Rate | $0 | $14K | $29K | $29K | $29K | $29K | $29K | $29K |
| Cumulative | $0 | $642K | $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 | 106% / 37.5x | 111% / 42.1x | 116% / 46.6x | 118% / 48.9x | 120% / 51.1x |
| 9.0x | 101% / 33.0x | 106% / 37.0x | 110% / 41.1x | 112% / 43.1x | 114% / 45.1x |
| 10.0x | 97% / 29.4x | 101% / 33.0x | 105% / 36.6x | 107% / 38.4x | 109% / 40.2x |
| 11.0x | 92% / 26.4x | 97% / 29.7x | 101% / 33.0x | 103% / 34.6x | 105% / 36.3x |
| 12.0x | 89% / 23.9x | 93% / 27.0x | 97% / 30.0x | 99% / 31.5x | 101% / 33.0x |
Covenant Headroom (at 10x Entry, 6.5x Max Leverage)
Pro forma EBITDA can decline 76% before the 6.5x covenant trips. RCM uplift reduces leverage from 8.5x to 1.6x, adding 6.9 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 | $534K | — | $534K | 1.2% |
| Year 1 | $550K | +$1.6M | $2.1M | 4.7% |
| Year 2 | $567K | +$2.4M | $2.9M | 6.5% |
| Year 3 | $584K | +$2.4M | $2.9M | 6.6% |
| Year 4 | $601K | +$2.4M | $3.0M | 6.6% |
| Year 5 | $619K | +$2.4M | $3.0M | 6.6% |
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 | $448K | $673K | $897K | $1.1M |
| Denial Rate Reductio | $444K | $666K | $888K | $1.1M |
| A/R Days Reduction | $273K | $409K | $546K | $655K |
| Clean Claim Rate | $14K | $22K | $29K | $34K |
| Total | $1.2M | $1.8M | $2.4M | $2.8M |
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 | 1.2% | -13.0% | -5.0% | 0.8% | P76 |
| Net-to-Gross | 65.6% | 62.2% | 71.1% | 78.8% | P33 |
| Occupancy | 32.4% | 11.6% | 17.6% | 24.8% | P88 |
| Rev/Bed | $2.1M | $763K | $1.3M | $1.8M | P83 |
| Exp/Bed | $2.1M | $789K | $1.4M | $1.8M | P80 |
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.