Bridge Realization Estimate
ML model predicts what fraction of the bridge is achievable (accuracy: 60%, n=5,839)
Expected realization: 68% of modeled bridge. Strengths: Occupancy Rate. Risks: Revenue per Bed. Risk-adjusted uplift: $1.3M (vs $1.9M 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 | $718K | $718K | $0 | 12mo |
| Denial Rate Reduction | 12.0% DEFAULT | 6.5% BENCHMARK | $691K | $20K | $711K | $0 | 12mo |
| A/R Days Reduction | 52.00 DEFAULT | 38.00 BENCHMARK | $110K | $327K | $437K | $1.4M | 9mo |
| Clean Claim Rate | 88.0% DEFAULT | 96.0% BENCHMARK | $0 | $23K | $23K | $0 | 6mo |
| Net Collection Rate | 93.5% DEFAULT | 76.1% 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 | $179K | $359K | $538K | $718K | $718K | $718K | $718K |
| Denial Rate Reduction | $0 | $178K | $355K | $533K | $711K | $711K | $711K | $711K |
| A/R Days Reduction | $0 | $146K | $291K | $437K | $437K | $437K | $437K | $437K |
| Clean Claim Rate | $0 | $11K | $23K | $23K | $23K | $23K | $23K | $23K |
| Cumulative | $0 | $514K | $1.0M | $1.5M | $1.9M | $1.9M | $1.9M | $1.9M |
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 $1.9M is added at exit.
| Entry \ Exit | 9.0x | 10.0x | 11.0x | 11.5x | 12.0x |
|---|---|---|---|---|---|
| 8.0x | 89% / 24.4x | 94% / 27.4x | 98% / 30.5x | 100% / 32.0x | 102% / 33.6x |
| 9.0x | 84% / 21.3x | 89% / 24.0x | 93% / 26.8x | 95% / 28.1x | 97% / 29.5x |
| 10.0x | 80% / 18.9x | 84% / 21.3x | 88% / 23.8x | 90% / 25.0x | 92% / 26.2x |
| 11.0x | 76% / 16.8x | 80% / 19.1x | 84% / 21.3x | 86% / 22.4x | 88% / 23.5x |
| 12.0x | 72% / 15.2x | 77% / 17.2x | 81% / 19.3x | 83% / 20.3x | 84% / 21.3x |
Covenant Headroom (at 10x Entry, 6.5x Max Leverage)
Pro forma EBITDA can decline 64% before the 6.5x covenant trips. RCM uplift reduces leverage from 8.5x to 2.3x, 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 | $721K | — | $721K | 2.0% |
| Year 1 | $743K | +$1.3M | $2.0M | 5.6% |
| Year 2 | $765K | +$1.9M | $2.7M | 7.4% |
| Year 3 | $788K | +$1.9M | $2.7M | 7.5% |
| Year 4 | $811K | +$1.9M | $2.7M | 7.5% |
| Year 5 | $836K | +$1.9M | $2.7M | 7.6% |
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 | $359K | $538K | $718K | $861K |
| Denial Rate Reductio | $355K | $533K | $711K | $853K |
| A/R Days Reduction | $218K | $328K | $437K | $524K |
| Clean Claim Rate | $11K | $17K | $23K | $28K |
| Total | $944K | $1.4M | $1.9M | $2.3M |
Peer Context — Where This Hospital Sits
Key metrics vs 40 size-matched peers. Low percentile on margin/efficiency metrics = more room for improvement = larger bridge opportunity.
| Metric | Hospital | P25 | P50 | P75 | Percentile |
|---|---|---|---|---|---|
| Op Margin | 2.0% | -20.7% | -8.2% | 1.3% | P78 |
| Net-to-Gross | 50.3% | 56.0% | 60.9% | 76.1% | P15 |
| Occupancy | 65.0% | 43.8% | 67.2% | 74.8% | P48 |
| Rev/Bed | $278K | $252K | $370K | $467K | P32 |
| Exp/Bed | $273K | $296K | $401K | $488K | P15 |
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.