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, Payer Diversity. Risks: Revenue per Bed, Commercial Payer %. Risk-adjusted uplift: $2.5M (vs $3.4M 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 | $1.3M | $1.3M | $0 | 12mo |
| Denial Rate Reduction | 12.0% DEFAULT | 6.5% BENCHMARK | $1.2M | $35K | $1.3M | $0 | 12mo |
| A/R Days Reduction | 52.00 DEFAULT | 38.00 BENCHMARK | $196K | $580K | $776K | $2.4M | 9mo |
| Clean Claim Rate | 88.0% DEFAULT | 96.0% BENCHMARK | $0 | $41K | $41K | $0 | 6mo |
| Net Collection Rate | 93.5% DEFAULT | 30.7% 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 | $319K | $638K | $957K | $1.3M | $1.3M | $1.3M | $1.3M |
| Denial Rate Reduction | $0 | $316K | $631K | $947K | $1.3M | $1.3M | $1.3M | $1.3M |
| A/R Days Reduction | $0 | $259K | $517K | $776K | $776K | $776K | $776K | $776K |
| Clean Claim Rate | $0 | $20K | $41K | $41K | $41K | $41K | $41K | $41K |
| Cumulative | $0 | $914K | $1.8M | $2.7M | $3.4M | $3.4M | $3.4M | $3.4M |
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 $3.4M is added at exit.
| Entry \ Exit | 9.0x | 10.0x | 11.0x | 11.5x | 12.0x |
|---|---|---|---|---|---|
| 8.0x | 88% / 23.6x | 93% / 26.6x | 97% / 29.6x | 99% / 31.1x | 101% / 32.6x |
| 9.0x | 83% / 20.7x | 88% / 23.3x | 92% / 26.0x | 94% / 27.3x | 96% / 28.6x |
| 10.0x | 79% / 18.3x | 83% / 20.7x | 87% / 23.1x | 89% / 24.2x | 91% / 25.4x |
| 11.0x | 75% / 16.3x | 79% / 18.5x | 83% / 20.7x | 85% / 21.8x | 87% / 22.8x |
| 12.0x | 71% / 14.7x | 76% / 16.7x | 80% / 18.7x | 81% / 19.7x | 83% / 20.7x |
Covenant Headroom (at 10x Entry, 6.5x Max Leverage)
Pro forma EBITDA can decline 63% before the 6.5x covenant trips. RCM uplift reduces leverage from 8.5x to 2.4x, adding 6.1 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 | $1.3M | — | $1.3M | 2.1% |
| Year 1 | $1.4M | +$2.2M | $3.6M | 5.7% |
| Year 2 | $1.4M | +$3.4M | $4.8M | 7.5% |
| Year 3 | $1.5M | +$3.4M | $4.8M | 7.5% |
| Year 4 | $1.5M | +$3.4M | $4.9M | 7.6% |
| Year 5 | $1.5M | +$3.4M | $4.9M | 7.7% |
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 | $638K | $957K | $1.3M | $1.5M |
| Denial Rate Reductio | $631K | $947K | $1.3M | $1.5M |
| A/R Days Reduction | $388K | $582K | $776K | $931K |
| Clean Claim Rate | $20K | $31K | $41K | $49K |
| Total | $1.7M | $2.5M | $3.4M | $4.0M |
Peer Context — Where This Hospital Sits
Key metrics vs 94 size-matched peers. Low percentile on margin/efficiency metrics = more room for improvement = larger bridge opportunity.
| Metric | Hospital | P25 | P50 | P75 | Percentile |
|---|---|---|---|---|---|
| Op Margin | 2.1% | -18.5% | -7.5% | 2.0% | P75 |
| Net-to-Gross | 41.0% | 17.3% | 23.2% | 30.7% | P93 |
| Occupancy | 92.3% | 49.6% | 61.0% | 76.3% | P94 |
| Rev/Bed | $310K | $637K | $1.2M | $1.6M | P10 |
| Exp/Bed | $303K | $645K | $1.2M | $1.7M | P12 |
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.