Bridge Realization Estimate
ML model predicts what fraction of the bridge is achievable (accuracy: 60%, n=5,839)
Expected realization: 59% of modeled bridge. Strengths: Bed Count. Risks: Occupancy Rate, Revenue per Bed. Risk-adjusted uplift: $0.1M (vs $0.2M 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 |
|---|---|---|---|---|---|---|---|
| Denial Rate Reduction | 12.0% DEFAULT | 6.5% BENCHMARK | $77K | $8K | $86K | $0 | 12mo |
| Cost to Collect | 4.5% DEFAULT | 2.5% BENCHMARK | $0 | $80K | $80K | $0 | 12mo |
| A/R Days Reduction | 52.00 DEFAULT | 38.00 BENCHMARK | $12K | $37K | $49K | $154K | 9mo |
| Clean Claim Rate | 88.0% DEFAULT | 96.0% BENCHMARK | $0 | $10K | $10K | $0 | 6mo |
| Net Collection Rate | 93.5% DEFAULT | 59.9% 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 |
|---|---|---|---|---|---|---|---|---|
| Denial Rate Reduction | $0 | $21K | $43K | $64K | $86K | $86K | $86K | $86K |
| Cost to Collect | $0 | $20K | $40K | $60K | $80K | $80K | $80K | $80K |
| A/R Days Reduction | $0 | $16K | $33K | $49K | $49K | $49K | $49K | $49K |
| Clean Claim Rate | $0 | $5K | $10K | $10K | $10K | $10K | $10K | $10K |
| Cumulative | $0 | $63K | $125K | $183K | $224K | $224K | $224K | $224K |
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 $224K is added at exit.
| Entry \ Exit | 9.0x | 10.0x | 11.0x | 11.5x | 12.0x |
|---|---|---|---|---|---|
| 8.0x | 60% / 10.3x | 64% / 11.8x | 68% / 13.3x | 70% / 14.1x | 72% / 14.9x |
| 9.0x | 55% / 8.8x | 59% / 10.2x | 63% / 11.5x | 65% / 12.2x | 67% / 12.8x |
| 10.0x | 50% / 7.6x | 55% / 8.8x | 59% / 10.0x | 60% / 10.6x | 62% / 11.2x |
| 11.0x | 46% / 6.6x | 51% / 7.7x | 55% / 8.8x | 56% / 9.4x | 58% / 9.9x |
| 12.0x | 42% / 5.8x | 47% / 6.8x | 51% / 7.8x | 53% / 8.3x | 55% / 8.8x |
Covenant Headroom (at 10x Entry, 6.5x Max Leverage)
Pro forma EBITDA can decline 23% before the 6.5x covenant trips. RCM uplift reduces leverage from 8.5x to 5.0x, adding 3.5 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 | $321K | — | $321K | 8.0% |
| Year 1 | $331K | +$150K | $480K | 12.0% |
| Year 2 | $341K | +$224K | $565K | 14.1% |
| Year 3 | $351K | +$224K | $575K | 14.3% |
| Year 4 | $361K | +$224K | $586K | 14.6% |
| Year 5 | $372K | +$224K | $597K | 14.9% |
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% |
|---|---|---|---|---|
| Denial Rate Reductio | $43K | $64K | $86K | $103K |
| Cost to Collect | $40K | $60K | $80K | $96K |
| A/R Days Reduction | $24K | $37K | $49K | $59K |
| Clean Claim Rate | $5K | $7K | $10K | $12K |
| Total | $112K | $168K | $224K | $269K |
Peer Context — Where This Hospital Sits
Key metrics vs 32 size-matched peers. Low percentile on margin/efficiency metrics = more room for improvement = larger bridge opportunity.
| Metric | Hospital | P25 | P50 | P75 | Percentile |
|---|---|---|---|---|---|
| Op Margin | -50.0% | -14.1% | 1.3% | 13.1% | P0 |
| Net-to-Gross | 23.0% | 23.9% | 31.8% | 59.9% | P22 |
| Occupancy | 13.9% | 35.2% | 63.0% | 77.2% | P6 |
| Rev/Bed | $154K | $458K | $672K | $1.8M | P3 |
| Exp/Bed | $341K | $433K | $702K | $1.8M | P3 |
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.