Bridge Realization Estimate
ML model predicts what fraction of the bridge is achievable (accuracy: 60%, n=5,839)
Expected realization: 70% of modeled bridge. Strengths: Commercial Payer %, Occupancy Rate. Risks: Revenue per Bed. Risk-adjusted uplift: $0.9M (vs $1.2M 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 | $471K | $471K | $0 | 12mo |
| Denial Rate Reduction | 12.0% DEFAULT | 6.5% BENCHMARK | $453K | $13K | $466K | $0 | 12mo |
| A/R Days Reduction | 52.00 DEFAULT | 38.00 BENCHMARK | $72K | $214K | $287K | $903K | 9mo |
| Clean Claim Rate | 88.0% DEFAULT | 96.0% BENCHMARK | $0 | $15K | $15K | $0 | 6mo |
| Net Collection Rate | 93.5% DEFAULT | 35.7% 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 | $118K | $235K | $353K | $471K | $471K | $471K | $471K |
| Denial Rate Reduction | $0 | $117K | $233K | $350K | $466K | $466K | $466K | $466K |
| A/R Days Reduction | $0 | $96K | $191K | $287K | $287K | $287K | $287K | $287K |
| Clean Claim Rate | $0 | $8K | $15K | $15K | $15K | $15K | $15K | $15K |
| Cumulative | $0 | $337K | $675K | $1.0M | $1.2M | $1.2M | $1.2M | $1.2M |
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 $1.2M is added at exit.
| Entry \ Exit | 9.0x | 10.0x | 11.0x | 11.5x | 12.0x |
|---|---|---|---|---|---|
| 8.0x | 54% / 8.7x | 59% / 10.0x | 63% / 11.4x | 64% / 12.0x | 66% / 12.7x |
| 9.0x | 49% / 7.4x | 54% / 8.6x | 58% / 9.7x | 60% / 10.3x | 61% / 10.9x |
| 10.0x | 45% / 6.3x | 49% / 7.4x | 53% / 8.4x | 55% / 9.0x | 57% / 9.5x |
| 11.0x | 40% / 5.4x | 45% / 6.4x | 49% / 7.4x | 51% / 7.9x | 53% / 8.3x |
| 12.0x | 36% / 4.7x | 41% / 5.6x | 45% / 6.5x | 47% / 6.9x | 49% / 7.4x |
Covenant Headroom (at 10x Entry, 6.5x Max Leverage)
Pro forma EBITDA can decline 12% before the 6.5x covenant trips. RCM uplift reduces leverage from 8.5x to 5.7x, adding 2.7 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 | $2.6M | — | $2.6M | 11.1% |
| Year 1 | $2.7M | +$826K | $3.5M | 14.9% |
| Year 2 | $2.8M | +$1.2M | $4.0M | 17.0% |
| Year 3 | $2.8M | +$1.2M | $4.1M | 17.4% |
| Year 4 | $2.9M | +$1.2M | $4.2M | 17.7% |
| Year 5 | $3.0M | +$1.2M | $4.3M | 18.1% |
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 | $235K | $353K | $471K | $565K |
| Denial Rate Reductio | $233K | $350K | $466K | $560K |
| A/R Days Reduction | $143K | $215K | $287K | $344K |
| Clean Claim Rate | $8K | $11K | $15K | $18K |
| Total | $619K | $929K | $1.2M | $1.5M |
Peer Context — Where This Hospital Sits
Key metrics vs 67 size-matched peers. Low percentile on margin/efficiency metrics = more room for improvement = larger bridge opportunity.
| Metric | Hospital | P25 | P50 | P75 | Percentile |
|---|---|---|---|---|---|
| Op Margin | 11.1% | -20.7% | -3.8% | 7.1% | P80 |
| Net-to-Gross | 20.3% | 18.1% | 26.5% | 35.7% | P30 |
| Occupancy | 57.7% | 22.9% | 37.0% | 67.0% | P70 |
| Rev/Bed | $392K | $378K | $712K | $1.3M | P26 |
| Exp/Bed | $349K | $399K | $1.0M | $1.6M | P22 |
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.