Bridge Realization Estimate
ML model predicts what fraction of the bridge is achievable (accuracy: 60%, n=5,839)
Expected realization: 64% of modeled bridge. Strengths: Commercial Payer %, Bed Count. Risks: Occupancy Rate, Net-to-Gross Ratio. Risk-adjusted uplift: $0.5M (vs $0.8M 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 | $307K | $307K | $0 | 12mo |
| Denial Rate Reduction | 12.0% DEFAULT | 6.5% BENCHMARK | $296K | $8K | $304K | $0 | 12mo |
| A/R Days Reduction | 52.00 DEFAULT | 38.00 BENCHMARK | $47K | $140K | $187K | $589K | 9mo |
| Clean Claim Rate | 88.0% DEFAULT | 96.0% BENCHMARK | $0 | $10K | $10K | $0 | 6mo |
| Net Collection Rate | 93.5% DEFAULT | 89.0% 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 | $77K | $154K | $230K | $307K | $307K | $307K | $307K |
| Denial Rate Reduction | $0 | $76K | $152K | $228K | $304K | $304K | $304K | $304K |
| A/R Days Reduction | $0 | $62K | $125K | $187K | $187K | $187K | $187K | $187K |
| Clean Claim Rate | $0 | $5K | $10K | $10K | $10K | $10K | $10K | $10K |
| Cumulative | $0 | $220K | $440K | $655K | $808K | $808K | $808K | $808K |
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 $808K is added at exit.
| Entry \ Exit | 9.0x | 10.0x | 11.0x | 11.5x | 12.0x |
|---|---|---|---|---|---|
| 8.0x | 86% / 22.4x | 91% / 25.3x | 95% / 28.1x | 97% / 29.6x | 99% / 31.0x |
| 9.0x | 81% / 19.6x | 86% / 22.1x | 90% / 24.6x | 92% / 25.9x | 94% / 27.2x |
| 10.0x | 77% / 17.3x | 81% / 19.6x | 85% / 21.9x | 87% / 23.0x | 89% / 24.1x |
| 11.0x | 73% / 15.4x | 77% / 17.5x | 81% / 19.6x | 83% / 20.6x | 85% / 21.7x |
| 12.0x | 69% / 13.9x | 74% / 15.8x | 78% / 17.7x | 79% / 18.6x | 81% / 19.6x |
Covenant Headroom (at 10x Entry, 6.5x Max Leverage)
Pro forma EBITDA can decline 61% before the 6.5x covenant trips. RCM uplift reduces leverage from 8.5x to 2.5x, adding 5.9 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 | $343K | — | $343K | 2.2% |
| Year 1 | $354K | +$539K | $892K | 5.8% |
| Year 2 | $364K | +$808K | $1.2M | 7.6% |
| Year 3 | $375K | +$808K | $1.2M | 7.7% |
| Year 4 | $387K | +$808K | $1.2M | 7.8% |
| Year 5 | $398K | +$808K | $1.2M | 7.9% |
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 | $154K | $230K | $307K | $369K |
| Denial Rate Reductio | $152K | $228K | $304K | $365K |
| A/R Days Reduction | $93K | $140K | $187K | $224K |
| Clean Claim Rate | $5K | $7K | $10K | $12K |
| Total | $404K | $606K | $808K | $970K |
Peer Context — Where This Hospital Sits
Key metrics vs 38 size-matched peers. Low percentile on margin/efficiency metrics = more room for improvement = larger bridge opportunity.
| Metric | Hospital | P25 | P50 | P75 | Percentile |
|---|---|---|---|---|---|
| Op Margin | 2.2% | -20.3% | -9.3% | -3.4% | P91 |
| Net-to-Gross | 88.5% | 61.4% | 76.6% | 89.0% | P71 |
| Occupancy | 38.8% | 13.2% | 22.1% | 40.3% | P71 |
| Rev/Bed | $960K | $485K | $648K | $1.1M | P63 |
| Exp/Bed | $938K | $530K | $745K | $1.3M | P58 |
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.