Bridge Realization Estimate
ML model predicts what fraction of the bridge is achievable (accuracy: 60%, n=5,839)
Expected realization: 73% of modeled bridge. Strengths: Occupancy Rate. Risks: Revenue per Bed. Risk-adjusted uplift: $1.8M (vs $2.5M 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 | $935K | $935K | $0 | 12mo |
| Denial Rate Reduction | 12.0% DEFAULT | 6.5% BENCHMARK | $900K | $26K | $925K | $0 | 12mo |
| A/R Days Reduction | 52.00 DEFAULT | 38.00 BENCHMARK | $143K | $425K | $569K | $1.8M | 9mo |
| Clean Claim Rate | 88.0% DEFAULT | 96.0% BENCHMARK | $0 | $30K | $30K | $0 | 6mo |
| Net Collection Rate | 93.5% DEFAULT | 35.5% 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 | $234K | $467K | $701K | $935K | $935K | $935K | $935K |
| Denial Rate Reduction | $0 | $231K | $463K | $694K | $925K | $925K | $925K | $925K |
| A/R Days Reduction | $0 | $190K | $379K | $569K | $569K | $569K | $569K | $569K |
| Clean Claim Rate | $0 | $15K | $30K | $30K | $30K | $30K | $30K | $30K |
| Cumulative | $0 | $669K | $1.3M | $2.0M | $2.5M | $2.5M | $2.5M | $2.5M |
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 $2.5M is added at exit.
| Entry \ Exit | 9.0x | 10.0x | 11.0x | 11.5x | 12.0x |
|---|---|---|---|---|---|
| 8.0x | 115% / 45.7x | 120% / 51.1x | 124% / 56.6x | 126% / 59.3x | 128% / 62.0x |
| 9.0x | 109% / 40.2x | 114% / 45.1x | 119% / 49.9x | 121% / 52.3x | 123% / 54.8x |
| 10.0x | 105% / 35.9x | 109% / 40.2x | 114% / 44.6x | 116% / 46.8x | 118% / 49.0x |
| 11.0x | 100% / 32.3x | 105% / 36.3x | 109% / 40.2x | 111% / 42.2x | 113% / 44.2x |
| 12.0x | 97% / 29.4x | 101% / 33.0x | 105% / 36.6x | 107% / 38.4x | 109% / 40.2x |
Covenant Headroom (at 10x Entry, 6.5x Max Leverage)
Pro forma EBITDA can decline 80% before the 6.5x covenant trips. RCM uplift reduces leverage from 8.5x to 1.3x, adding 7.2 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 | $444K | — | $444K | 1.0% |
| Year 1 | $458K | +$1.6M | $2.1M | 4.5% |
| Year 2 | $471K | +$2.5M | $2.9M | 6.3% |
| Year 3 | $486K | +$2.5M | $2.9M | 6.3% |
| Year 4 | $500K | +$2.5M | $3.0M | 6.3% |
| Year 5 | $515K | +$2.5M | $3.0M | 6.4% |
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 | $467K | $701K | $935K | $1.1M |
| Denial Rate Reductio | $463K | $694K | $925K | $1.1M |
| A/R Days Reduction | $284K | $426K | $569K | $682K |
| Clean Claim Rate | $15K | $22K | $30K | $36K |
| Total | $1.2M | $1.8M | $2.5M | $3.0M |
Peer Context — Where This Hospital Sits
Key metrics vs 49 size-matched peers. Low percentile on margin/efficiency metrics = more room for improvement = larger bridge opportunity.
| Metric | Hospital | P25 | P50 | P75 | Percentile |
|---|---|---|---|---|---|
| Op Margin | 1.0% | -15.0% | -3.3% | 6.5% | P59 |
| Net-to-Gross | 56.0% | 18.2% | 26.9% | 35.5% | P89 |
| Occupancy | 88.2% | 32.9% | 52.1% | 76.7% | P88 |
| Rev/Bed | $519K | $454K | $862K | $1.5M | P26 |
| Exp/Bed | $514K | $439K | $1.0M | $1.6M | P27 |
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.