Bridge Realization Estimate
ML model predicts what fraction of the bridge is achievable (accuracy: 60%, n=5,839)
Expected realization: 76% of modeled bridge. Strengths: Occupancy Rate, Net-to-Gross Ratio. Risks: Revenue per Bed. Risk-adjusted uplift: $2.0M (vs $2.6M 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 | $976K | $976K | $0 | 12mo |
| Denial Rate Reduction | 12.0% DEFAULT | 6.5% BENCHMARK | $939K | $27K | $966K | $0 | 12mo |
| A/R Days Reduction | 52.00 DEFAULT | 38.00 BENCHMARK | $150K | $444K | $594K | $1.9M | 9mo |
| Clean Claim Rate | 88.0% DEFAULT | 96.0% BENCHMARK | $0 | $31K | $31K | $0 | 6mo |
| Net Collection Rate | 93.5% DEFAULT | 35.3% 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 | $244K | $488K | $732K | $976K | $976K | $976K | $976K |
| Denial Rate Reduction | $0 | $241K | $483K | $724K | $966K | $966K | $966K | $966K |
| A/R Days Reduction | $0 | $198K | $396K | $594K | $594K | $594K | $594K | $594K |
| Clean Claim Rate | $0 | $16K | $31K | $31K | $31K | $31K | $31K | $31K |
| Cumulative | $0 | $699K | $1.4M | $2.1M | $2.6M | $2.6M | $2.6M | $2.6M |
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 $2.6M is added at exit.
| Entry \ Exit | 9.0x | 10.0x | 11.0x | 11.5x | 12.0x |
|---|---|---|---|---|---|
| 8.0x | 56% / 9.1x | 60% / 10.5x | 64% / 11.8x | 66% / 12.5x | 68% / 13.2x |
| 9.0x | 51% / 7.7x | 55% / 8.9x | 59% / 10.2x | 61% / 10.8x | 63% / 11.4x |
| 10.0x | 46% / 6.6x | 51% / 7.7x | 55% / 8.8x | 56% / 9.4x | 58% / 9.9x |
| 11.0x | 42% / 5.7x | 46% / 6.7x | 51% / 7.7x | 52% / 8.2x | 54% / 8.7x |
| 12.0x | 38% / 5.0x | 43% / 5.9x | 47% / 6.8x | 49% / 7.3x | 51% / 7.7x |
Covenant Headroom (at 10x Entry, 6.5x Max Leverage)
Pro forma EBITDA can decline 15% before the 6.5x covenant trips. RCM uplift reduces leverage from 8.5x to 5.5x, adding 2.9 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 | $4.8M | — | $4.8M | 9.9% |
| Year 1 | $5.0M | +$1.7M | $6.7M | 13.7% |
| Year 2 | $5.1M | +$2.6M | $7.7M | 15.8% |
| Year 3 | $5.3M | +$2.6M | $7.9M | 16.1% |
| Year 4 | $5.4M | +$2.6M | $8.0M | 16.4% |
| Year 5 | $5.6M | +$2.6M | $8.2M | 16.8% |
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 | $488K | $732K | $976K | $1.2M |
| Denial Rate Reductio | $483K | $724K | $966K | $1.2M |
| A/R Days Reduction | $297K | $445K | $594K | $712K |
| Clean Claim Rate | $16K | $23K | $31K | $37K |
| Total | $1.3M | $1.9M | $2.6M | $3.1M |
Peer Context — Where This Hospital Sits
Key metrics vs 61 size-matched peers. Low percentile on margin/efficiency metrics = more room for improvement = larger bridge opportunity.
| Metric | Hospital | P25 | P50 | P75 | Percentile |
|---|---|---|---|---|---|
| Op Margin | 9.9% | -17.7% | -3.8% | 6.4% | P78 |
| Net-to-Gross | 16.8% | 18.9% | 26.7% | 35.3% | P15 |
| Occupancy | 92.3% | 25.2% | 45.8% | 67.6% | P93 |
| Rev/Bed | $678K | $443K | $940K | $1.4M | P42 |
| Exp/Bed | $610K | $444K | $1.1M | $1.6M | P31 |
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.