Bridge Realization Estimate
ML model predicts what fraction of the bridge is achievable (accuracy: 60%, n=5,839)
Expected realization: 71% of modeled bridge. Strengths: Occupancy Rate, Payer Diversity. Risks: Revenue per Bed, Commercial Payer %. Risk-adjusted uplift: $0.4M (vs $0.6M 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 | $239K | $239K | $0 | 12mo |
| Denial Rate Reduction | 12.0% DEFAULT | 6.5% BENCHMARK | $230K | $8K | $238K | $0 | 12mo |
| A/R Days Reduction | 52.00 DEFAULT | 38.00 BENCHMARK | $37K | $109K | $145K | $458K | 9mo |
| Clean Claim Rate | 88.0% DEFAULT | 96.0% BENCHMARK | $0 | $10K | $10K | $0 | 6mo |
| Net Collection Rate | 93.5% DEFAULT | 49.7% 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 | $60K | $119K | $179K | $239K | $239K | $239K | $239K |
| Denial Rate Reduction | $0 | $60K | $119K | $179K | $238K | $238K | $238K | $238K |
| A/R Days Reduction | $0 | $48K | $97K | $145K | $145K | $145K | $145K | $145K |
| Clean Claim Rate | $0 | $5K | $10K | $10K | $10K | $10K | $10K | $10K |
| Cumulative | $0 | $172K | $345K | $512K | $632K | $632K | $632K | $632K |
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 $632K is added at exit.
| Entry \ Exit | 9.0x | 10.0x | 11.0x | 11.5x | 12.0x |
|---|---|---|---|---|---|
| 8.0x | 70% / 14.0x | 74% / 15.9x | 78% / 17.8x | 80% / 18.8x | 82% / 19.8x |
| 9.0x | 65% / 12.1x | 69% / 13.8x | 73% / 15.5x | 75% / 16.4x | 77% / 17.2x |
| 10.0x | 60% / 10.6x | 65% / 12.1x | 69% / 13.6x | 70% / 14.4x | 72% / 15.2x |
| 11.0x | 56% / 9.3x | 61% / 10.7x | 65% / 12.1x | 66% / 12.8x | 68% / 13.5x |
| 12.0x | 53% / 8.3x | 57% / 9.5x | 61% / 10.8x | 63% / 11.4x | 65% / 12.1x |
Covenant Headroom (at 10x Entry, 6.5x Max Leverage)
Pro forma EBITDA can decline 41% before the 6.5x covenant trips. RCM uplift reduces leverage from 8.5x to 3.8x, adding 4.6 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 | $526K | — | $526K | 4.4% |
| Year 1 | $542K | +$421K | $963K | 8.1% |
| Year 2 | $558K | +$632K | $1.2M | 10.0% |
| Year 3 | $575K | +$632K | $1.2M | 10.1% |
| Year 4 | $592K | +$632K | $1.2M | 10.3% |
| Year 5 | $610K | +$632K | $1.2M | 10.4% |
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 | $119K | $179K | $239K | $286K |
| Denial Rate Reductio | $119K | $179K | $238K | $286K |
| A/R Days Reduction | $73K | $109K | $145K | $174K |
| Clean Claim Rate | $5K | $7K | $10K | $12K |
| Total | $316K | $474K | $632K | $758K |
Peer Context — Where This Hospital Sits
Key metrics vs 35 size-matched peers. Low percentile on margin/efficiency metrics = more room for improvement = larger bridge opportunity.
| Metric | Hospital | P25 | P50 | P75 | Percentile |
|---|---|---|---|---|---|
| Op Margin | 4.4% | -20.3% | -2.7% | 8.8% | P59 |
| Net-to-Gross | 47.5% | 24.1% | 38.6% | 49.7% | P69 |
| Occupancy | 77.6% | 21.4% | 42.2% | 64.3% | P86 |
| Rev/Bed | $249K | $603K | $971K | $2.3M | P0 |
| Exp/Bed | $238K | $637K | $1.5M | $2.5M | P0 |
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.