Bridge Realization Estimate
ML model predicts what fraction of the bridge is achievable (accuracy: 60%, n=5,839)
Expected realization: 68% of modeled bridge. Strengths: Occupancy Rate, Commercial Payer %. Risks: Revenue per Bed. Risk-adjusted uplift: $1.0M (vs $1.5M 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 | $570K | $570K | $0 | 12mo |
| Denial Rate Reduction | 12.0% DEFAULT | 6.5% BENCHMARK | $548K | $16K | $564K | $0 | 12mo |
| A/R Days Reduction | 52.00 DEFAULT | 38.00 BENCHMARK | $87K | $259K | $347K | $1.1M | 9mo |
| Clean Claim Rate | 88.0% DEFAULT | 96.0% BENCHMARK | $0 | $18K | $18K | $0 | 6mo |
| Net Collection Rate | 93.5% DEFAULT | 50.6% 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 | $142K | $285K | $427K | $570K | $570K | $570K | $570K |
| Denial Rate Reduction | $0 | $141K | $282K | $423K | $564K | $564K | $564K | $564K |
| A/R Days Reduction | $0 | $116K | $231K | $347K | $347K | $347K | $347K | $347K |
| Clean Claim Rate | $0 | $9K | $18K | $18K | $18K | $18K | $18K | $18K |
| Cumulative | $0 | $408K | $816K | $1.2M | $1.5M | $1.5M | $1.5M | $1.5M |
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 $1.5M is added at exit.
| Entry \ Exit | 9.0x | 10.0x | 11.0x | 11.5x | 12.0x |
|---|---|---|---|---|---|
| 8.0x | 105% / 35.9x | 109% / 40.2x | 114% / 44.6x | 116% / 46.8x | 118% / 48.9x |
| 9.0x | 99% / 31.5x | 104% / 35.4x | 108% / 39.3x | 110% / 41.2x | 112% / 43.1x |
| 10.0x | 95% / 28.1x | 99% / 31.5x | 104% / 35.0x | 106% / 36.8x | 108% / 38.5x |
| 11.0x | 91% / 25.2x | 95% / 28.4x | 99% / 31.5x | 101% / 33.1x | 103% / 34.7x |
| 12.0x | 87% / 22.8x | 91% / 25.7x | 96% / 28.6x | 98% / 30.1x | 99% / 31.5x |
Covenant Headroom (at 10x Entry, 6.5x Max Leverage)
Pro forma EBITDA can decline 75% before the 6.5x covenant trips. RCM uplift reduces leverage from 8.5x to 1.6x, adding 6.8 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 | $357K | — | $357K | 1.3% |
| Year 1 | $368K | +$999K | $1.4M | 4.8% |
| Year 2 | $379K | +$1.5M | $1.9M | 6.6% |
| Year 3 | $391K | +$1.5M | $1.9M | 6.6% |
| Year 4 | $402K | +$1.5M | $1.9M | 6.7% |
| Year 5 | $414K | +$1.5M | $1.9M | 6.7% |
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 | $285K | $427K | $570K | $683K |
| Denial Rate Reductio | $282K | $423K | $564K | $677K |
| A/R Days Reduction | $173K | $260K | $347K | $416K |
| Clean Claim Rate | $9K | $14K | $18K | $22K |
| Total | $749K | $1.1M | $1.5M | $1.8M |
Peer Context — Where This Hospital Sits
Key metrics vs 40 size-matched peers. Low percentile on margin/efficiency metrics = more room for improvement = larger bridge opportunity.
| Metric | Hospital | P25 | P50 | P75 | Percentile |
|---|---|---|---|---|---|
| Op Margin | 1.3% | -25.7% | -5.7% | 2.5% | P65 |
| Net-to-Gross | 17.0% | 14.3% | 22.0% | 50.6% | P38 |
| Occupancy | 55.2% | 50.0% | 56.1% | 74.0% | P42 |
| Rev/Bed | $375K | $413K | $628K | $1.4M | P18 |
| Exp/Bed | $370K | $458K | $855K | $1.5M | P8 |
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.