Bridge Realization Estimate
ML model predicts what fraction of the bridge is achievable (accuracy: 60%, n=5,839)
Expected realization: 59% of modeled bridge. Strengths: Bed Count. Risks: Occupancy Rate. Risk-adjusted uplift: $0.7M (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 | $475K | $475K | $0 | 12mo |
| Denial Rate Reduction | 12.0% DEFAULT | 6.5% BENCHMARK | $457K | $13K | $470K | $0 | 12mo |
| A/R Days Reduction | 52.00 DEFAULT | 38.00 BENCHMARK | $73K | $216K | $289K | $911K | 9mo |
| Clean Claim Rate | 88.0% DEFAULT | 96.0% BENCHMARK | $0 | $15K | $15K | $0 | 6mo |
| Net Collection Rate | 93.5% DEFAULT | 47.2% 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 | $356K | $475K | $475K | $475K | $475K |
| Denial Rate Reduction | $0 | $118K | $235K | $353K | $470K | $470K | $470K | $470K |
| A/R Days Reduction | $0 | $96K | $193K | $289K | $289K | $289K | $289K | $289K |
| Clean Claim Rate | $0 | $8K | $15K | $15K | $15K | $15K | $15K | $15K |
| Cumulative | $0 | $340K | $681K | $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 | 48% / 7.1x | 53% / 8.3x | 57% / 9.4x | 58% / 10.0x | 60% / 10.6x |
| 9.0x | 43% / 6.0x | 48% / 7.0x | 52% / 8.0x | 54% / 8.5x | 55% / 9.0x |
| 10.0x | 38% / 5.0x | 43% / 6.0x | 47% / 6.9x | 49% / 7.3x | 51% / 7.8x |
| 11.0x | 34% / 4.3x | 39% / 5.1x | 43% / 6.0x | 45% / 6.4x | 47% / 6.8x |
| 12.0x | 30% / 3.7x | 35% / 4.4x | 39% / 5.2x | 41% / 5.6x | 43% / 6.0x |
Covenant Headroom (at 10x Entry, 6.5x Max Leverage)
Pro forma EBITDA can decline -3% before the 6.5x covenant trips. RCM uplift reduces leverage from 8.5x to 6.7x, adding 1.7 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 | $4.8M | — | $4.8M | 20.4% |
| Year 1 | $5.0M | +$833K | $5.8M | 24.5% |
| Year 2 | $5.1M | +$1.3M | $6.4M | 26.9% |
| Year 3 | $5.3M | +$1.3M | $6.5M | 27.5% |
| Year 4 | $5.5M | +$1.3M | $6.7M | 28.2% |
| Year 5 | $5.6M | +$1.3M | $6.9M | 28.9% |
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 | $238K | $356K | $475K | $570K |
| Denial Rate Reductio | $235K | $353K | $470K | $565K |
| A/R Days Reduction | $145K | $217K | $289K | $347K |
| Clean Claim Rate | $8K | $11K | $15K | $18K |
| Total | $625K | $938K | $1.3M | $1.5M |
Peer Context — Where This Hospital Sits
Key metrics vs 77 size-matched peers. Low percentile on margin/efficiency metrics = more room for improvement = larger bridge opportunity.
| Metric | Hospital | P25 | P50 | P75 | Percentile |
|---|---|---|---|---|---|
| Op Margin | 20.4% | -11.5% | -1.9% | 11.0% | P88 |
| Net-to-Gross | 47.4% | 28.4% | 38.2% | 47.2% | P75 |
| Occupancy | 9.1% | 24.8% | 37.1% | 58.5% | P6 |
| Rev/Bed | $1.0M | $487K | $1.1M | $2.3M | P42 |
| Exp/Bed | $822K | $503K | $1.2M | $2.2M | P36 |
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.