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: Commercial Payer %. Risk-adjusted uplift: $1.7M (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 | $894K | $894K | $0 | 12mo |
| Denial Rate Reduction | 12.0% DEFAULT | 6.5% BENCHMARK | $861K | $25K | $886K | $0 | 12mo |
| A/R Days Reduction | 52.00 DEFAULT | 38.00 BENCHMARK | $137K | $407K | $544K | $1.7M | 9mo |
| Clean Claim Rate | 88.0% DEFAULT | 96.0% BENCHMARK | $0 | $29K | $29K | $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 | $224K | $447K | $671K | $894K | $894K | $894K | $894K |
| Denial Rate Reduction | $0 | $221K | $443K | $664K | $886K | $886K | $886K | $886K |
| A/R Days Reduction | $0 | $181K | $363K | $544K | $544K | $544K | $544K | $544K |
| Clean Claim Rate | $0 | $14K | $29K | $29K | $29K | $29K | $29K | $29K |
| Cumulative | $0 | $641K | $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 | 46% / 6.6x | 50% / 7.7x | 54% / 8.8x | 56% / 9.3x | 58% / 9.9x |
| 9.0x | 41% / 5.5x | 45% / 6.5x | 49% / 7.5x | 51% / 7.9x | 53% / 8.4x |
| 10.0x | 36% / 4.6x | 41% / 5.5x | 45% / 6.4x | 47% / 6.8x | 49% / 7.3x |
| 11.0x | 31% / 3.9x | 36% / 4.7x | 41% / 5.5x | 43% / 5.9x | 45% / 6.3x |
| 12.0x | 27% / 3.3x | 32% / 4.0x | 37% / 4.8x | 39% / 5.1x | 41% / 5.5x |
Covenant Headroom (at 10x Entry, 6.5x Max Leverage)
Pro forma EBITDA can decline -10% before the 6.5x covenant trips. RCM uplift reduces leverage from 8.5x to 7.1x, adding 1.3 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 | $12.5M | — | $12.5M | 28.0% |
| Year 1 | $12.9M | +$1.6M | $14.5M | 32.4% |
| Year 2 | $13.3M | +$2.4M | $15.7M | 35.0% |
| Year 3 | $13.7M | +$2.4M | $16.1M | 35.9% |
| Year 4 | $14.1M | +$2.4M | $16.5M | 36.8% |
| Year 5 | $14.5M | +$2.4M | $16.9M | 37.8% |
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 | $447K | $671K | $894K | $1.1M |
| Denial Rate Reductio | $443K | $664K | $886K | $1.1M |
| A/R Days Reduction | $272K | $408K | $544K | $653K |
| Clean Claim Rate | $14K | $21K | $29K | $34K |
| Total | $1.2M | $1.8M | $2.4M | $2.8M |
Peer Context — Where This Hospital Sits
Key metrics vs 111 size-matched peers. Low percentile on margin/efficiency metrics = more room for improvement = larger bridge opportunity.
| Metric | Hospital | P25 | P50 | P75 | Percentile |
|---|---|---|---|---|---|
| Op Margin | 28.0% | -13.0% | -1.8% | 10.4% | P96 |
| Net-to-Gross | 21.9% | 26.1% | 36.5% | 45.5% | P18 |
| Occupancy | 68.0% | 26.9% | 39.0% | 61.1% | P82 |
| Rev/Bed | $1.1M | $361K | $952K | $2.0M | P55 |
| Exp/Bed | $785K | $362K | $888K | $2.0M | P45 |
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.