Bridge Realization Estimate
ML model predicts what fraction of the bridge is achievable (accuracy: 60%, n=5,839)
Expected realization: 72% of modeled bridge. Strengths: Occupancy Rate, Commercial Payer %. Risks: Revenue per Bed. Risk-adjusted uplift: $0.7M (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 | $351K | $351K | $0 | 12mo |
| Denial Rate Reduction | 12.0% DEFAULT | 6.5% BENCHMARK | $338K | $10K | $347K | $0 | 12mo |
| A/R Days Reduction | 52.00 DEFAULT | 38.00 BENCHMARK | $54K | $160K | $213K | $673K | 9mo |
| Clean Claim Rate | 88.0% DEFAULT | 96.0% BENCHMARK | $0 | $11K | $11K | $0 | 6mo |
| Net Collection Rate | 93.5% DEFAULT | 37.5% 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 | $88K | $175K | $263K | $351K | $351K | $351K | $351K |
| Denial Rate Reduction | $0 | $87K | $174K | $260K | $347K | $347K | $347K | $347K |
| A/R Days Reduction | $0 | $71K | $142K | $213K | $213K | $213K | $213K | $213K |
| Clean Claim Rate | $0 | $6K | $11K | $11K | $11K | $11K | $11K | $11K |
| Cumulative | $0 | $251K | $502K | $748K | $923K | $923K | $923K | $923K |
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 $923K is added at exit.
| Entry \ Exit | 9.0x | 10.0x | 11.0x | 11.5x | 12.0x |
|---|---|---|---|---|---|
| 8.0x | 72% / 15.1x | 77% / 17.2x | 81% / 19.2x | 82% / 20.2x | 84% / 21.2x |
| 9.0x | 67% / 13.1x | 72% / 14.9x | 76% / 16.7x | 78% / 17.6x | 79% / 18.5x |
| 10.0x | 63% / 11.4x | 67% / 13.1x | 71% / 14.7x | 73% / 15.5x | 75% / 16.4x |
| 11.0x | 59% / 10.1x | 63% / 11.6x | 67% / 13.1x | 69% / 13.8x | 71% / 14.6x |
| 12.0x | 55% / 9.0x | 60% / 10.4x | 64% / 11.7x | 65% / 12.4x | 67% / 13.1x |
Covenant Headroom (at 10x Entry, 6.5x Max Leverage)
Pro forma EBITDA can decline 45% before the 6.5x covenant trips. RCM uplift reduces leverage from 8.5x to 3.6x, adding 4.9 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 | $682K | — | $682K | 3.9% |
| Year 1 | $702K | +$615K | $1.3M | 7.5% |
| Year 2 | $723K | +$923K | $1.6M | 9.4% |
| Year 3 | $745K | +$923K | $1.7M | 9.5% |
| Year 4 | $767K | +$923K | $1.7M | 9.6% |
| Year 5 | $790K | +$923K | $1.7M | 9.8% |
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 | $175K | $263K | $351K | $421K |
| Denial Rate Reductio | $174K | $260K | $347K | $417K |
| A/R Days Reduction | $107K | $160K | $213K | $256K |
| Clean Claim Rate | $6K | $8K | $11K | $13K |
| Total | $461K | $692K | $923K | $1.1M |
Peer Context — Where This Hospital Sits
Key metrics vs 97 size-matched peers. Low percentile on margin/efficiency metrics = more room for improvement = larger bridge opportunity.
| Metric | Hospital | P25 | P50 | P75 | Percentile |
|---|---|---|---|---|---|
| Op Margin | 3.9% | -13.1% | 2.8% | 9.7% | P54 |
| Net-to-Gross | 50.3% | 21.8% | 29.5% | 37.5% | P93 |
| Occupancy | 71.2% | 33.7% | 53.6% | 66.8% | P84 |
| Rev/Bed | $209K | $339K | $958K | $1.5M | P13 |
| Exp/Bed | $201K | $313K | $917K | $1.5M | P11 |
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.