Bridge Realization Estimate
ML model predicts what fraction of the bridge is achievable (accuracy: 60%, n=5,839)
Expected realization: 72% of modeled bridge. Strengths: Occupancy Rate, Payer Diversity. Risks: Revenue per Bed, Commercial Payer %. Risk-adjusted uplift: $1.4M (vs $2.0M 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 | $747K | $747K | $0 | 12mo |
| Denial Rate Reduction | 12.0% DEFAULT | 6.5% BENCHMARK | $719K | $21K | $739K | $0 | 12mo |
| A/R Days Reduction | 52.00 DEFAULT | 38.00 BENCHMARK | $115K | $340K | $454K | $1.4M | 9mo |
| Clean Claim Rate | 88.0% DEFAULT | 96.0% BENCHMARK | $0 | $24K | $24K | $0 | 6mo |
| Net Collection Rate | 93.5% DEFAULT | 33.6% 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 | $187K | $373K | $560K | $747K | $747K | $747K | $747K |
| Denial Rate Reduction | $0 | $185K | $370K | $554K | $739K | $739K | $739K | $739K |
| A/R Days Reduction | $0 | $151K | $303K | $454K | $454K | $454K | $454K | $454K |
| Clean Claim Rate | $0 | $12K | $24K | $24K | $24K | $24K | $24K | $24K |
| Cumulative | $0 | $535K | $1.1M | $1.6M | $2.0M | $2.0M | $2.0M | $2.0M |
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 $2.0M is added at exit.
| Entry \ Exit | 9.0x | 10.0x | 11.0x | 11.5x | 12.0x |
|---|---|---|---|---|---|
| 8.0x | 68% / 13.4x | 72% / 15.3x | 76% / 17.1x | 78% / 18.0x | 80% / 19.0x |
| 9.0x | 63% / 11.6x | 68% / 13.2x | 72% / 14.8x | 73% / 15.7x | 75% / 16.5x |
| 10.0x | 59% / 10.1x | 63% / 11.6x | 67% / 13.0x | 69% / 13.8x | 71% / 14.5x |
| 11.0x | 55% / 8.9x | 59% / 10.2x | 63% / 11.6x | 65% / 12.2x | 67% / 12.9x |
| 12.0x | 51% / 7.9x | 56% / 9.1x | 60% / 10.3x | 61% / 10.9x | 63% / 11.6x |
Covenant Headroom (at 10x Entry, 6.5x Max Leverage)
Pro forma EBITDA can decline 39% before the 6.5x covenant trips. RCM uplift reduces leverage from 8.5x to 4.0x, adding 4.5 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 | $1.8M | — | $1.8M | 4.7% |
| Year 1 | $1.8M | +$1.3M | $3.1M | 8.3% |
| Year 2 | $1.9M | +$2.0M | $3.8M | 10.2% |
| Year 3 | $1.9M | +$2.0M | $3.9M | 10.4% |
| Year 4 | $2.0M | +$2.0M | $3.9M | 10.6% |
| Year 5 | $2.0M | +$2.0M | $4.0M | 10.7% |
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 | $373K | $560K | $747K | $896K |
| Denial Rate Reductio | $370K | $554K | $739K | $887K |
| A/R Days Reduction | $227K | $341K | $454K | $545K |
| Clean Claim Rate | $12K | $18K | $24K | $29K |
| Total | $982K | $1.5M | $2.0M | $2.4M |
Peer Context — Where This Hospital Sits
Key metrics vs 103 size-matched peers. Low percentile on margin/efficiency metrics = more room for improvement = larger bridge opportunity.
| Metric | Hospital | P25 | P50 | P75 | Percentile |
|---|---|---|---|---|---|
| Op Margin | 4.7% | -19.0% | -7.5% | 4.9% | P73 |
| Net-to-Gross | 46.4% | 18.2% | 25.0% | 33.5% | P93 |
| Occupancy | 83.9% | 45.0% | 59.3% | 75.0% | P85 |
| Rev/Bed | $256K | $519K | $1.0M | $1.5M | P10 |
| Exp/Bed | $244K | $547K | $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.