Bridge Realization Estimate
ML model predicts what fraction of the bridge is achievable (accuracy: 60%, n=5,839)
Expected realization: 67% of modeled bridge. Risks: Revenue per Bed. Risk-adjusted uplift: $0.8M (vs $1.2M 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 | $465K | $465K | $0 | 12mo |
| Denial Rate Reduction | 12.0% DEFAULT | 6.5% BENCHMARK | $448K | $13K | $460K | $0 | 12mo |
| A/R Days Reduction | 52.00 DEFAULT | 38.00 BENCHMARK | $71K | $212K | $283K | $892K | 9mo |
| Clean Claim Rate | 88.0% DEFAULT | 96.0% BENCHMARK | $0 | $15K | $15K | $0 | 6mo |
| Net Collection Rate | 93.5% DEFAULT | 42.5% 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 | $116K | $233K | $349K | $465K | $465K | $465K | $465K |
| Denial Rate Reduction | $0 | $115K | $230K | $345K | $460K | $460K | $460K | $460K |
| A/R Days Reduction | $0 | $94K | $189K | $283K | $283K | $283K | $283K | $283K |
| Clean Claim Rate | $0 | $7K | $15K | $15K | $15K | $15K | $15K | $15K |
| Cumulative | $0 | $333K | $666K | $992K | $1.2M | $1.2M | $1.2M | $1.2M |
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 $1.2M is added at exit.
| Entry \ Exit | 9.0x | 10.0x | 11.0x | 11.5x | 12.0x |
|---|---|---|---|---|---|
| 8.0x | 60% / 10.7x | 65% / 12.2x | 69% / 13.7x | 71% / 14.5x | 73% / 15.3x |
| 9.0x | 56% / 9.1x | 60% / 10.5x | 64% / 11.8x | 66% / 12.5x | 68% / 13.2x |
| 10.0x | 51% / 7.9x | 56% / 9.1x | 60% / 10.3x | 61% / 11.0x | 63% / 11.6x |
| 11.0x | 47% / 6.9x | 52% / 8.0x | 56% / 9.1x | 57% / 9.7x | 59% / 10.2x |
| 12.0x | 43% / 6.0x | 48% / 7.0x | 52% / 8.1x | 54% / 8.6x | 56% / 9.1x |
Covenant Headroom (at 10x Entry, 6.5x Max Leverage)
Pro forma EBITDA can decline 25% before the 6.5x covenant trips. RCM uplift reduces leverage from 8.5x to 4.9x, adding 3.6 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 | $1.7M | — | $1.7M | 7.1% |
| Year 1 | $1.7M | +$816K | $2.5M | 10.8% |
| Year 2 | $1.8M | +$1.2M | $3.0M | 12.8% |
| Year 3 | $1.8M | +$1.2M | $3.0M | 13.0% |
| Year 4 | $1.9M | +$1.2M | $3.1M | 13.3% |
| Year 5 | $1.9M | +$1.2M | $3.1M | 13.5% |
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 | $233K | $349K | $465K | $558K |
| Denial Rate Reductio | $230K | $345K | $460K | $553K |
| A/R Days Reduction | $142K | $212K | $283K | $340K |
| Clean Claim Rate | $7K | $11K | $15K | $18K |
| Total | $612K | $918K | $1.2M | $1.5M |
Peer Context — Where This Hospital Sits
Key metrics vs 95 size-matched peers. Low percentile on margin/efficiency metrics = more room for improvement = larger bridge opportunity.
| Metric | Hospital | P25 | P50 | P75 | Percentile |
|---|---|---|---|---|---|
| Op Margin | 7.1% | -14.4% | 1.4% | 9.5% | P68 |
| Net-to-Gross | 33.1% | 23.4% | 31.5% | 42.5% | P53 |
| Occupancy | 52.3% | 32.7% | 52.8% | 67.1% | P48 |
| Rev/Bed | $358K | $304K | $580K | $1.4M | P30 |
| Exp/Bed | $332K | $311K | $547K | $1.5M | P28 |
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.