Bridge Realization Estimate
ML model predicts what fraction of the bridge is achievable (accuracy: 60%, n=5,839)
Expected realization: 59% of modeled bridge. Strengths: Bed Count. Risks: Occupancy Rate, Revenue per Bed. Risk-adjusted uplift: $0.9M (vs $1.5M 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 |
|---|---|---|---|---|---|---|---|
| Cost to Collect | 4.5% DEFAULT | 2.5% BENCHMARK | $0 | $563K | $563K | $0 | 12mo |
| Denial Rate Reduction | 12.0% DEFAULT | 6.5% BENCHMARK | $542K | $15K | $557K | $0 | 12mo |
| A/R Days Reduction | 52.00 DEFAULT | 38.00 BENCHMARK | $86K | $256K | $343K | $1.1M | 9mo |
| Clean Claim Rate | 88.0% DEFAULT | 96.0% BENCHMARK | $0 | $18K | $18K | $0 | 6mo |
| Net Collection Rate | 93.5% DEFAULT | 46.4% 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 | $141K | $282K | $422K | $563K | $563K | $563K | $563K |
| Denial Rate Reduction | $0 | $139K | $279K | $418K | $557K | $557K | $557K | $557K |
| A/R Days Reduction | $0 | $114K | $228K | $343K | $343K | $343K | $343K | $343K |
| Clean Claim Rate | $0 | $9K | $18K | $18K | $18K | $18K | $18K | $18K |
| Cumulative | $0 | $403K | $807K | $1.2M | $1.5M | $1.5M | $1.5M | $1.5M |
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 $1.5M is added at exit.
| Entry \ Exit | 9.0x | 10.0x | 11.0x | 11.5x | 12.0x |
|---|---|---|---|---|---|
| 8.0x | 80% / 19.0x | 85% / 21.5x | 89% / 23.9x | 91% / 25.2x | 92% / 26.4x |
| 9.0x | 75% / 16.5x | 80% / 18.7x | 84% / 20.9x | 86% / 22.0x | 87% / 23.1x |
| 10.0x | 71% / 14.6x | 75% / 16.5x | 79% / 18.5x | 81% / 19.5x | 83% / 20.5x |
| 11.0x | 67% / 12.9x | 71% / 14.7x | 75% / 16.5x | 77% / 17.4x | 79% / 18.3x |
| 12.0x | 63% / 11.6x | 68% / 13.2x | 72% / 14.9x | 73% / 15.7x | 75% / 16.5x |
Covenant Headroom (at 10x Entry, 6.5x Max Leverage)
Pro forma EBITDA can decline 55% before the 6.5x covenant trips. RCM uplift reduces leverage from 8.5x to 2.9x, adding 5.5 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 | $786K | — | $786K | 2.8% |
| Year 1 | $810K | +$987K | $1.8M | 6.4% |
| Year 2 | $834K | +$1.5M | $2.3M | 8.2% |
| Year 3 | $859K | +$1.5M | $2.3M | 8.3% |
| Year 4 | $885K | +$1.5M | $2.4M | 8.4% |
| Year 5 | $912K | +$1.5M | $2.4M | 8.5% |
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 | $282K | $422K | $563K | $676K |
| Denial Rate Reductio | $279K | $418K | $557K | $669K |
| A/R Days Reduction | $171K | $257K | $343K | $411K |
| Clean Claim Rate | $9K | $14K | $18K | $22K |
| Total | $741K | $1.1M | $1.5M | $1.8M |
Peer Context — Where This Hospital Sits
Key metrics vs 90 size-matched peers. Low percentile on margin/efficiency metrics = more room for improvement = larger bridge opportunity.
| Metric | Hospital | P25 | P50 | P75 | Percentile |
|---|---|---|---|---|---|
| Op Margin | 2.8% | -23.2% | -9.3% | 2.9% | P74 |
| Net-to-Gross | 34.9% | 21.0% | 32.6% | 46.4% | P51 |
| Occupancy | 14.1% | 19.6% | 35.3% | 54.2% | P16 |
| Rev/Bed | $563K | $377K | $646K | $1.3M | P42 |
| Exp/Bed | $547K | $431K | $731K | $1.6M | P34 |
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.