Bridge Realization Estimate
ML model predicts what fraction of the bridge is achievable (accuracy: 60%, n=5,839)
Expected realization: 65% of modeled bridge. Strengths: Bed Count. Risks: Occupancy Rate. Risk-adjusted uplift: $0.8M (vs $1.3M 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 | $477K | $477K | $0 | 12mo |
| Denial Rate Reduction | 12.0% DEFAULT | 6.5% BENCHMARK | $459K | $13K | $472K | $0 | 12mo |
| A/R Days Reduction | 52.00 DEFAULT | 38.00 BENCHMARK | $73K | $217K | $290K | $914K | 9mo |
| Clean Claim Rate | 88.0% DEFAULT | 96.0% BENCHMARK | $0 | $15K | $15K | $0 | 6mo |
| Net Collection Rate | 93.5% DEFAULT | 42.7% 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 | $119K | $238K | $358K | $477K | $477K | $477K | $477K |
| Denial Rate Reduction | $0 | $118K | $236K | $354K | $472K | $472K | $472K | $472K |
| A/R Days Reduction | $0 | $97K | $193K | $290K | $290K | $290K | $290K | $290K |
| Clean Claim Rate | $0 | $8K | $15K | $15K | $15K | $15K | $15K | $15K |
| Cumulative | $0 | $341K | $683K | $1.0M | $1.3M | $1.3M | $1.3M | $1.3M |
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 $1.3M is added at exit.
| Entry \ Exit | 9.0x | 10.0x | 11.0x | 11.5x | 12.0x |
|---|---|---|---|---|---|
| 8.0x | 69% / 13.8x | 73% / 15.7x | 77% / 17.6x | 79% / 18.5x | 81% / 19.5x |
| 9.0x | 64% / 11.9x | 68% / 13.6x | 72% / 15.3x | 74% / 16.1x | 76% / 16.9x |
| 10.0x | 60% / 10.4x | 64% / 11.9x | 68% / 13.4x | 70% / 14.2x | 72% / 14.9x |
| 11.0x | 56% / 9.1x | 60% / 10.5x | 64% / 11.9x | 66% / 12.6x | 68% / 13.3x |
| 12.0x | 52% / 8.1x | 56% / 9.4x | 60% / 10.6x | 62% / 11.3x | 64% / 11.9x |
Covenant Headroom (at 10x Entry, 6.5x Max Leverage)
Pro forma EBITDA can decline 40% before the 6.5x covenant trips. RCM uplift reduces leverage from 8.5x to 3.9x, 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 | $1.1M | — | $1.1M | 4.5% |
| Year 1 | $1.1M | +$836K | $1.9M | 8.1% |
| Year 2 | $1.1M | +$1.3M | $2.4M | 10.0% |
| Year 3 | $1.2M | +$1.3M | $2.4M | 10.2% |
| Year 4 | $1.2M | +$1.3M | $2.5M | 10.3% |
| Year 5 | $1.2M | +$1.3M | $2.5M | 10.5% |
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 | $238K | $358K | $477K | $572K |
| Denial Rate Reductio | $236K | $354K | $472K | $566K |
| A/R Days Reduction | $145K | $218K | $290K | $348K |
| Clean Claim Rate | $8K | $11K | $15K | $18K |
| Total | $627K | $940K | $1.3M | $1.5M |
Peer Context — Where This Hospital Sits
Key metrics vs 26 size-matched peers. Low percentile on margin/efficiency metrics = more room for improvement = larger bridge opportunity.
| Metric | Hospital | P25 | P50 | P75 | Percentile |
|---|---|---|---|---|---|
| Op Margin | 4.5% | -19.3% | -7.7% | 3.4% | P77 |
| Net-to-Gross | 21.0% | 25.7% | 35.7% | 42.7% | P8 |
| Occupancy | 35.8% | 33.1% | 45.5% | 65.7% | P27 |
| Rev/Bed | $1.6M | $636K | $1.6M | $2.1M | P46 |
| Exp/Bed | $1.5M | $700K | $1.7M | $2.2M | P46 |
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.