Bridge Realization Estimate
ML model predicts what fraction of the bridge is achievable (accuracy: 60%, n=5,839)
Expected realization: 62% of modeled bridge. Strengths: Commercial Payer %. Risks: Occupancy Rate, Revenue per Bed. Risk-adjusted uplift: $0.5M (vs $0.8M 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 | $318K | $318K | $0 | 12mo |
| Denial Rate Reduction | 12.0% DEFAULT | 6.5% BENCHMARK | $306K | $9K | $315K | $0 | 12mo |
| A/R Days Reduction | 52.00 DEFAULT | 38.00 BENCHMARK | $49K | $145K | $194K | $610K | 9mo |
| Clean Claim Rate | 88.0% DEFAULT | 96.0% BENCHMARK | $0 | $10K | $10K | $0 | 6mo |
| Net Collection Rate | 93.5% DEFAULT | 34.9% 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 | $80K | $159K | $239K | $318K | $318K | $318K | $318K |
| Denial Rate Reduction | $0 | $79K | $157K | $236K | $315K | $315K | $315K | $315K |
| A/R Days Reduction | $0 | $65K | $129K | $194K | $194K | $194K | $194K | $194K |
| Clean Claim Rate | $0 | $5K | $10K | $10K | $10K | $10K | $10K | $10K |
| Cumulative | $0 | $228K | $456K | $678K | $837K | $837K | $837K | $837K |
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 $837K is added at exit.
| Entry \ Exit | 9.0x | 10.0x | 11.0x | 11.5x | 12.0x |
|---|---|---|---|---|---|
| 8.0x | 118% / 49.7x | 123% / 55.6x | 128% / 61.5x | 130% / 64.4x | 132% / 67.3x |
| 9.0x | 113% / 43.8x | 118% / 49.0x | 122% / 54.3x | 124% / 56.9x | 126% / 59.5x |
| 10.0x | 108% / 39.1x | 113% / 43.8x | 117% / 48.5x | 119% / 50.9x | 121% / 53.2x |
| 11.0x | 104% / 35.3x | 109% / 39.5x | 113% / 43.8x | 115% / 46.0x | 117% / 48.1x |
| 12.0x | 100% / 32.0x | 105% / 36.0x | 109% / 39.9x | 111% / 41.9x | 113% / 43.8x |
Covenant Headroom (at 10x Entry, 6.5x Max Leverage)
Pro forma EBITDA can decline 82% before the 6.5x covenant trips. RCM uplift reduces leverage from 8.5x to 1.2x, adding 7.3 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 | $138K | — | $138K | 0.9% |
| Year 1 | $142K | +$558K | $700K | 4.4% |
| Year 2 | $146K | +$837K | $983K | 6.2% |
| Year 3 | $150K | +$837K | $987K | 6.2% |
| Year 4 | $155K | +$837K | $992K | 6.2% |
| Year 5 | $160K | +$837K | $996K | 6.3% |
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 | $159K | $239K | $318K | $382K |
| Denial Rate Reductio | $157K | $236K | $315K | $378K |
| A/R Days Reduction | $97K | $145K | $194K | $232K |
| Clean Claim Rate | $5K | $8K | $10K | $12K |
| Total | $418K | $628K | $837K | $1.0M |
Peer Context — Where This Hospital Sits
Key metrics vs 58 size-matched peers. Low percentile on margin/efficiency metrics = more room for improvement = larger bridge opportunity.
| Metric | Hospital | P25 | P50 | P75 | Percentile |
|---|---|---|---|---|---|
| Op Margin | 0.9% | -16.8% | -3.8% | 4.9% | P58 |
| Net-to-Gross | 31.6% | 18.4% | 26.7% | 34.9% | P66 |
| Occupancy | 29.9% | 26.2% | 48.5% | 67.8% | P31 |
| Rev/Bed | $204K | $454K | $940K | $1.4M | P8 |
| Exp/Bed | $202K | $462K | $1.1M | $1.6M | P5 |
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.