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, Bed Count. Risks: Revenue per Bed. Risk-adjusted uplift: $0.7M (vs $1.0M 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 | $392K | $392K | $0 | 12mo |
| Denial Rate Reduction | 12.0% DEFAULT | 6.5% BENCHMARK | $378K | $11K | $388K | $0 | 12mo |
| A/R Days Reduction | 52.00 DEFAULT | 38.00 BENCHMARK | $60K | $179K | $239K | $753K | 9mo |
| Clean Claim Rate | 88.0% DEFAULT | 96.0% BENCHMARK | $0 | $13K | $13K | $0 | 6mo |
| Net Collection Rate | 93.5% DEFAULT | 45.5% 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 | $98K | $196K | $294K | $392K | $392K | $392K | $392K |
| Denial Rate Reduction | $0 | $97K | $194K | $291K | $388K | $388K | $388K | $388K |
| A/R Days Reduction | $0 | $80K | $159K | $239K | $239K | $239K | $239K | $239K |
| Clean Claim Rate | $0 | $6K | $13K | $13K | $13K | $13K | $13K | $13K |
| Cumulative | $0 | $281K | $562K | $837K | $1.0M | $1.0M | $1.0M | $1.0M |
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 $1.0M is added at exit.
| Entry \ Exit | 9.0x | 10.0x | 11.0x | 11.5x | 12.0x |
|---|---|---|---|---|---|
| 8.0x | 64% / 11.8x | 68% / 13.5x | 72% / 15.2x | 74% / 16.0x | 76% / 16.8x |
| 9.0x | 59% / 10.1x | 63% / 11.6x | 67% / 13.1x | 69% / 13.8x | 71% / 14.6x |
| 10.0x | 54% / 8.8x | 59% / 10.1x | 63% / 11.5x | 65% / 12.1x | 67% / 12.8x |
| 11.0x | 50% / 7.7x | 55% / 8.9x | 59% / 10.1x | 61% / 10.8x | 63% / 11.3x |
| 12.0x | 47% / 6.8x | 51% / 7.9x | 55% / 9.0x | 57% / 9.6x | 59% / 10.1x |
Covenant Headroom (at 10x Entry, 6.5x Max Leverage)
Pro forma EBITDA can decline 31% before the 6.5x covenant trips. RCM uplift reduces leverage from 8.5x to 4.5x, adding 4.0 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 | 5.8% |
| Year 1 | $1.2M | +$688K | $1.9M | 9.5% |
| Year 2 | $1.2M | +$1.0M | $2.2M | 11.5% |
| Year 3 | $1.3M | +$1.0M | $2.3M | 11.6% |
| Year 4 | $1.3M | +$1.0M | $2.3M | 11.8% |
| Year 5 | $1.3M | +$1.0M | $2.4M | 12.0% |
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 | $196K | $294K | $392K | $471K |
| Denial Rate Reductio | $194K | $291K | $388K | $466K |
| A/R Days Reduction | $119K | $179K | $239K | $286K |
| Clean Claim Rate | $6K | $9K | $13K | $15K |
| Total | $516K | $774K | $1.0M | $1.2M |
Peer Context — Where This Hospital Sits
Key metrics vs 114 size-matched peers. Low percentile on margin/efficiency metrics = more room for improvement = larger bridge opportunity.
| Metric | Hospital | P25 | P50 | P75 | Percentile |
|---|---|---|---|---|---|
| Op Margin | 5.8% | -12.2% | -1.7% | 10.6% | P65 |
| Net-to-Gross | 15.5% | 26.1% | 36.4% | 45.5% | P6 |
| Occupancy | 68.6% | 27.0% | 39.4% | 61.8% | P82 |
| Rev/Bed | $467K | $359K | $968K | $2.0M | P32 |
| Exp/Bed | $440K | $360K | $902K | $1.9M | P32 |
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.