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: $0.6M (vs $0.9M 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 | $342K | $342K | $0 | 12mo |
| Denial Rate Reduction | 12.0% DEFAULT | 6.5% BENCHMARK | $329K | $9K | $338K | $0 | 12mo |
| A/R Days Reduction | 52.00 DEFAULT | 38.00 BENCHMARK | $52K | $155K | $208K | $655K | 9mo |
| Clean Claim Rate | 88.0% DEFAULT | 96.0% BENCHMARK | $0 | $11K | $11K | $0 | 6mo |
| Net Collection Rate | 93.5% DEFAULT | 47.4% 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 | $85K | $171K | $256K | $342K | $342K | $342K | $342K |
| Denial Rate Reduction | $0 | $85K | $169K | $254K | $338K | $338K | $338K | $338K |
| A/R Days Reduction | $0 | $69K | $139K | $208K | $208K | $208K | $208K | $208K |
| Clean Claim Rate | $0 | $5K | $11K | $11K | $11K | $11K | $11K | $11K |
| Cumulative | $0 | $245K | $489K | $728K | $898K | $898K | $898K | $898K |
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 $898K is added at exit.
| Entry \ Exit | 9.0x | 10.0x | 11.0x | 11.5x | 12.0x |
|---|---|---|---|---|---|
| 8.0x | 56% / 9.4x | 61% / 10.8x | 65% / 12.2x | 67% / 12.9x | 69% / 13.6x |
| 9.0x | 51% / 8.0x | 56% / 9.2x | 60% / 10.5x | 62% / 11.1x | 64% / 11.7x |
| 10.0x | 47% / 6.9x | 51% / 8.0x | 56% / 9.1x | 57% / 9.7x | 59% / 10.2x |
| 11.0x | 43% / 5.9x | 47% / 7.0x | 51% / 8.0x | 53% / 8.5x | 55% / 9.0x |
| 12.0x | 39% / 5.2x | 44% / 6.1x | 48% / 7.0x | 50% / 7.5x | 51% / 8.0x |
Covenant Headroom (at 10x Entry, 6.5x Max Leverage)
Pro forma EBITDA can decline 17% before the 6.5x covenant trips. RCM uplift reduces leverage from 8.5x to 5.4x, adding 3.1 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 | 9.3% |
| Year 1 | $1.6M | +$599K | $2.2M | 13.1% |
| Year 2 | $1.7M | +$898K | $2.6M | 15.1% |
| Year 3 | $1.7M | +$898K | $2.6M | 15.4% |
| Year 4 | $1.8M | +$898K | $2.7M | 15.7% |
| Year 5 | $1.8M | +$898K | $2.7M | 16.0% |
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 | $171K | $256K | $342K | $410K |
| Denial Rate Reductio | $169K | $254K | $338K | $406K |
| A/R Days Reduction | $104K | $156K | $208K | $249K |
| Clean Claim Rate | $5K | $8K | $11K | $13K |
| Total | $449K | $674K | $898K | $1.1M |
Peer Context — Where This Hospital Sits
Key metrics vs 101 size-matched peers. Low percentile on margin/efficiency metrics = more room for improvement = larger bridge opportunity.
| Metric | Hospital | P25 | P50 | P75 | Percentile |
|---|---|---|---|---|---|
| Op Margin | 9.3% | -11.1% | -1.6% | 12.0% | P67 |
| Net-to-Gross | 15.7% | 29.1% | 37.8% | 47.4% | P5 |
| Occupancy | 68.8% | 26.1% | 37.4% | 59.0% | P84 |
| Rev/Bed | $488K | $387K | $1.1M | $2.1M | P33 |
| Exp/Bed | $443K | $376K | $979K | $2.1M | 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.