Bridge Realization Estimate
ML model predicts what fraction of the bridge is achievable (accuracy: 60%, n=5,839)
Expected realization: 67% of modeled bridge. Strengths: Occupancy Rate, Bed Count. Risks: Revenue per Bed, Commercial Payer %. Risk-adjusted uplift: $0.3M (vs $0.5M 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 |
|---|---|---|---|---|---|---|---|
| Denial Rate Reduction | 12.0% DEFAULT | 6.5% BENCHMARK | $187K | $8K | $195K | $0 | 12mo |
| Cost to Collect | 4.5% DEFAULT | 2.5% BENCHMARK | $0 | $194K | $194K | $0 | 12mo |
| A/R Days Reduction | 52.00 DEFAULT | 38.00 BENCHMARK | $30K | $88K | $118K | $372K | 9mo |
| Clean Claim Rate | 88.0% DEFAULT | 96.0% BENCHMARK | $0 | $10K | $10K | $0 | 6mo |
| Net Collection Rate | 93.5% DEFAULT | 44.8% 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 |
|---|---|---|---|---|---|---|---|---|
| Denial Rate Reduction | $0 | $49K | $97K | $146K | $195K | $195K | $195K | $195K |
| Cost to Collect | $0 | $48K | $97K | $145K | $194K | $194K | $194K | $194K |
| A/R Days Reduction | $0 | $39K | $79K | $118K | $118K | $118K | $118K | $118K |
| Clean Claim Rate | $0 | $5K | $10K | $10K | $10K | $10K | $10K | $10K |
| Cumulative | $0 | $141K | $283K | $419K | $516K | $516K | $516K | $516K |
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 $516K is added at exit.
| Entry \ Exit | 9.0x | 10.0x | 11.0x | 11.5x | 12.0x |
|---|---|---|---|---|---|
| 8.0x | 63% / 11.4x | 67% / 13.1x | 71% / 14.7x | 73% / 15.5x | 75% / 16.3x |
| 9.0x | 58% / 9.8x | 62% / 11.3x | 66% / 12.7x | 68% / 13.4x | 70% / 14.2x |
| 10.0x | 53% / 8.5x | 58% / 9.8x | 62% / 11.1x | 64% / 11.8x | 66% / 12.4x |
| 11.0x | 49% / 7.4x | 54% / 8.6x | 58% / 9.8x | 60% / 10.4x | 62% / 11.0x |
| 12.0x | 46% / 6.5x | 50% / 7.6x | 54% / 8.7x | 56% / 9.3x | 58% / 9.8x |
Covenant Headroom (at 10x Entry, 6.5x Max Leverage)
Pro forma EBITDA can decline 30% before the 6.5x covenant trips. RCM uplift reduces leverage from 8.5x to 4.6x, adding 3.9 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 | $608K | — | $608K | 6.3% |
| Year 1 | $626K | +$344K | $970K | 10.0% |
| Year 2 | $645K | +$516K | $1.2M | 12.0% |
| Year 3 | $664K | +$516K | $1.2M | 12.2% |
| Year 4 | $684K | +$516K | $1.2M | 12.4% |
| Year 5 | $705K | +$516K | $1.2M | 12.6% |
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% |
|---|---|---|---|---|
| Denial Rate Reductio | $97K | $146K | $195K | $234K |
| Cost to Collect | $97K | $145K | $194K | $233K |
| A/R Days Reduction | $59K | $88K | $118K | $142K |
| Clean Claim Rate | $5K | $7K | $10K | $12K |
| Total | $258K | $387K | $516K | $619K |
Peer Context — Where This Hospital Sits
Key metrics vs 115 size-matched peers. Low percentile on margin/efficiency metrics = more room for improvement = larger bridge opportunity.
| Metric | Hospital | P25 | P50 | P75 | Percentile |
|---|---|---|---|---|---|
| Op Margin | 6.3% | -13.3% | -1.6% | 10.0% | P66 |
| Net-to-Gross | 47.9% | 26.1% | 35.9% | 44.8% | P81 |
| Occupancy | 57.1% | 27.0% | 39.0% | 64.3% | P67 |
| Rev/Bed | $202K | $369K | $951K | $1.9M | P9 |
| Exp/Bed | $189K | $362K | $917K | $1.9M | P7 |
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.