Bridge Realization Estimate
ML model predicts what fraction of the bridge is achievable (accuracy: 60%, n=5,839)
Expected realization: 68% of modeled bridge. Strengths: Occupancy Rate. Risks: Revenue per Bed. Risk-adjusted uplift: $1.6M (vs $2.4M 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 | $907K | $907K | $0 | 12mo |
| Denial Rate Reduction | 12.0% DEFAULT | 6.5% BENCHMARK | $873K | $25K | $898K | $0 | 12mo |
| A/R Days Reduction | 52.00 DEFAULT | 38.00 BENCHMARK | $139K | $413K | $552K | $1.7M | 9mo |
| Clean Claim Rate | 88.0% DEFAULT | 96.0% BENCHMARK | $0 | $29K | $29K | $0 | 6mo |
| Net Collection Rate | 93.5% DEFAULT | 40.1% 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 | $227K | $453K | $680K | $907K | $907K | $907K | $907K |
| Denial Rate Reduction | $0 | $224K | $449K | $673K | $898K | $898K | $898K | $898K |
| A/R Days Reduction | $0 | $184K | $368K | $552K | $552K | $552K | $552K | $552K |
| Clean Claim Rate | $0 | $15K | $29K | $29K | $29K | $29K | $29K | $29K |
| Cumulative | $0 | $650K | $1.3M | $1.9M | $2.4M | $2.4M | $2.4M | $2.4M |
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 $2.4M is added at exit.
| Entry \ Exit | 9.0x | 10.0x | 11.0x | 11.5x | 12.0x |
|---|---|---|---|---|---|
| 8.0x | 74% / 16.0x | 79% / 18.2x | 83% / 20.3x | 84% / 21.4x | 86% / 22.4x |
| 9.0x | 69% / 13.9x | 74% / 15.8x | 78% / 17.7x | 80% / 18.6x | 81% / 19.6x |
| 10.0x | 65% / 12.2x | 69% / 13.9x | 73% / 15.6x | 75% / 16.4x | 77% / 17.3x |
| 11.0x | 61% / 10.8x | 65% / 12.3x | 69% / 13.9x | 71% / 14.7x | 73% / 15.4x |
| 12.0x | 57% / 9.6x | 62% / 11.0x | 66% / 12.4x | 67% / 13.2x | 69% / 13.9x |
Covenant Headroom (at 10x Entry, 6.5x Max Leverage)
Pro forma EBITDA can decline 47% before the 6.5x covenant trips. RCM uplift reduces leverage from 8.5x to 3.4x, adding 5.0 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 | $1.6M | — | $1.6M | 3.6% |
| Year 1 | $1.7M | +$1.6M | $3.3M | 7.2% |
| Year 2 | $1.7M | +$2.4M | $4.1M | 9.0% |
| Year 3 | $1.8M | +$2.4M | $4.2M | 9.2% |
| Year 4 | $1.8M | +$2.4M | $4.2M | 9.3% |
| Year 5 | $1.9M | +$2.4M | $4.3M | 9.4% |
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 | $453K | $680K | $907K | $1.1M |
| Denial Rate Reductio | $449K | $673K | $898K | $1.1M |
| A/R Days Reduction | $276K | $414K | $552K | $662K |
| Clean Claim Rate | $15K | $22K | $29K | $35K |
| Total | $1.2M | $1.8M | $2.4M | $2.9M |
Peer Context — Where This Hospital Sits
Key metrics vs 99 size-matched peers. Low percentile on margin/efficiency metrics = more room for improvement = larger bridge opportunity.
| Metric | Hospital | P25 | P50 | P75 | Percentile |
|---|---|---|---|---|---|
| Op Margin | 3.6% | -11.4% | 2.8% | 10.0% | P53 |
| Net-to-Gross | 17.0% | 23.2% | 30.9% | 40.1% | P14 |
| Occupancy | 59.6% | 33.6% | 54.6% | 67.3% | P62 |
| Rev/Bed | $567K | $327K | $929K | $1.4M | P45 |
| Exp/Bed | $547K | $312K | $720K | $1.4M | 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.