Bridge Realization Estimate
ML model predicts what fraction of the bridge is achievable (accuracy: 60%, n=5,839)
Expected realization: 67% of modeled bridge. Strengths: Occupancy Rate. Risks: Revenue per Bed, Commercial Payer %. Risk-adjusted uplift: $0.6M (vs $0.9M 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 | $337K | $337K | $0 | 12mo |
| Denial Rate Reduction | 12.0% DEFAULT | 6.5% BENCHMARK | $324K | $9K | $333K | $0 | 12mo |
| A/R Days Reduction | 52.00 DEFAULT | 38.00 BENCHMARK | $52K | $153K | $205K | $646K | 9mo |
| Clean Claim Rate | 88.0% DEFAULT | 96.0% BENCHMARK | $0 | $11K | $11K | $0 | 6mo |
| Net Collection Rate | 93.5% DEFAULT | 39.6% 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 | $84K | $168K | $252K | $337K | $337K | $337K | $337K |
| Denial Rate Reduction | $0 | $83K | $167K | $250K | $333K | $333K | $333K | $333K |
| A/R Days Reduction | $0 | $68K | $137K | $205K | $205K | $205K | $205K | $205K |
| Clean Claim Rate | $0 | $5K | $11K | $11K | $11K | $11K | $11K | $11K |
| Cumulative | $0 | $241K | $482K | $718K | $885K | $885K | $885K | $885K |
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 $885K is added at exit.
| Entry \ Exit | 9.0x | 10.0x | 11.0x | 11.5x | 12.0x |
|---|---|---|---|---|---|
| 8.0x | 124% / 56.5x | 129% / 63.1x | 134% / 69.8x | 136% / 73.1x | 138% / 76.4x |
| 9.0x | 119% / 49.9x | 123% / 55.8x | 128% / 61.7x | 130% / 64.6x | 132% / 67.6x |
| 10.0x | 114% / 44.5x | 119% / 49.9x | 123% / 55.2x | 125% / 57.8x | 127% / 60.5x |
| 11.0x | 109% / 40.2x | 114% / 45.0x | 119% / 49.9x | 121% / 52.3x | 123% / 54.7x |
| 12.0x | 105% / 36.6x | 110% / 41.0x | 115% / 45.4x | 117% / 47.6x | 119% / 49.9x |
Covenant Headroom (at 10x Entry, 6.5x Max Leverage)
Pro forma EBITDA can decline 84% before the 6.5x covenant trips. RCM uplift reduces leverage from 8.5x to 1.1x, adding 7.4 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 | $126K | — | $126K | 0.8% |
| Year 1 | $130K | +$590K | $720K | 4.3% |
| Year 2 | $134K | +$885K | $1.0M | 6.1% |
| Year 3 | $138K | +$885K | $1.0M | 6.1% |
| Year 4 | $142K | +$885K | $1.0M | 6.1% |
| Year 5 | $146K | +$885K | $1.0M | 6.1% |
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 | $168K | $252K | $337K | $404K |
| Denial Rate Reductio | $167K | $250K | $333K | $400K |
| A/R Days Reduction | $102K | $154K | $205K | $246K |
| Clean Claim Rate | $5K | $8K | $11K | $13K |
| Total | $443K | $664K | $885K | $1.1M |
Peer Context — Where This Hospital Sits
Key metrics vs 22 size-matched peers. Low percentile on margin/efficiency metrics = more room for improvement = larger bridge opportunity.
| Metric | Hospital | P25 | P50 | P75 | Percentile |
|---|---|---|---|---|---|
| Op Margin | 0.8% | -16.7% | 0.4% | 9.9% | P50 |
| Net-to-Gross | 35.7% | 15.9% | 33.3% | 39.6% | P59 |
| Occupancy | 58.8% | 54.8% | 62.8% | 73.2% | P32 |
| Rev/Bed | $153K | $206K | $442K | $1.1M | P18 |
| Exp/Bed | $152K | $239K | $489K | $1.2M | 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.