Bridge Realization Estimate
ML model predicts what fraction of the bridge is achievable (accuracy: 60%, n=5,839)
Expected realization: 59% of modeled bridge. Strengths: Commercial Payer %, Bed Count. Risks: Occupancy Rate, Net-to-Gross Ratio. Risk-adjusted uplift: $0.6M (vs $1.0M 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 | $372K | $372K | $0 | 12mo |
| Denial Rate Reduction | 12.0% DEFAULT | 6.5% BENCHMARK | $358K | $10K | $368K | $0 | 12mo |
| A/R Days Reduction | 52.00 DEFAULT | 38.00 BENCHMARK | $57K | $169K | $226K | $713K | 9mo |
| Clean Claim Rate | 88.0% DEFAULT | 96.0% BENCHMARK | $0 | $12K | $12K | $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 | $93K | $186K | $279K | $372K | $372K | $372K | $372K |
| Denial Rate Reduction | $0 | $92K | $184K | $276K | $368K | $368K | $368K | $368K |
| A/R Days Reduction | $0 | $75K | $151K | $226K | $226K | $226K | $226K | $226K |
| Clean Claim Rate | $0 | $6K | $12K | $12K | $12K | $12K | $12K | $12K |
| Cumulative | $0 | $266K | $533K | $793K | $978K | $978K | $978K | $978K |
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 $978K is added at exit.
| Entry \ Exit | 9.0x | 10.0x | 11.0x | 11.5x | 12.0x |
|---|---|---|---|---|---|
| 8.0x | 71% / 14.7x | 75% / 16.6x | 79% / 18.6x | 81% / 19.6x | 83% / 20.6x |
| 9.0x | 66% / 12.7x | 71% / 14.4x | 75% / 16.2x | 76% / 17.1x | 78% / 18.0x |
| 10.0x | 62% / 11.1x | 66% / 12.7x | 70% / 14.2x | 72% / 15.0x | 74% / 15.8x |
| 11.0x | 58% / 9.8x | 62% / 11.2x | 66% / 12.7x | 68% / 13.4x | 70% / 14.1x |
| 12.0x | 54% / 8.7x | 59% / 10.0x | 63% / 11.3x | 64% / 12.0x | 66% / 12.7x |
Covenant Headroom (at 10x Entry, 6.5x Max Leverage)
Pro forma EBITDA can decline 43% before the 6.5x covenant trips. RCM uplift reduces leverage from 8.5x to 3.7x, adding 4.8 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 | $760K | — | $760K | 4.1% |
| Year 1 | $782K | +$652K | $1.4M | 7.7% |
| Year 2 | $806K | +$978K | $1.8M | 9.6% |
| Year 3 | $830K | +$978K | $1.8M | 9.7% |
| Year 4 | $855K | +$978K | $1.8M | 9.9% |
| Year 5 | $881K | +$978K | $1.9M | 10.0% |
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 | $186K | $279K | $372K | $446K |
| Denial Rate Reductio | $184K | $276K | $368K | $442K |
| A/R Days Reduction | $113K | $170K | $226K | $272K |
| Clean Claim Rate | $6K | $9K | $12K | $14K |
| Total | $489K | $734K | $978K | $1.2M |
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 | 4.1% | -13.0% | -5.0% | 0.8% | P80 |
| Net-to-Gross | 77.7% | 62.2% | 71.1% | 78.8% | P71 |
| Occupancy | 12.5% | 11.6% | 17.6% | 24.8% | P27 |
| Rev/Bed | $809K | $763K | $1.3M | $1.8M | P26 |
| Exp/Bed | $775K | $789K | $1.4M | $1.8M | P24 |
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.