Bridge Realization Estimate
ML model predicts what fraction of the bridge is achievable (accuracy: 60%, n=5,839)
Expected realization: 70% of modeled bridge. Strengths: Occupancy Rate, Bed Count. Risks: Revenue per Bed. Risk-adjusted uplift: $0.5M (vs $0.7M 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 | $282K | $282K | $0 | 12mo |
| Denial Rate Reduction | 12.0% DEFAULT | 6.5% BENCHMARK | $272K | $8K | $280K | $0 | 12mo |
| A/R Days Reduction | 52.00 DEFAULT | 38.00 BENCHMARK | $43K | $128K | $172K | $541K | 9mo |
| Clean Claim Rate | 88.0% DEFAULT | 96.0% BENCHMARK | $0 | $10K | $10K | $0 | 6mo |
| Net Collection Rate | 93.5% DEFAULT | 60.0% 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 | $71K | $141K | $212K | $282K | $282K | $282K | $282K |
| Denial Rate Reduction | $0 | $70K | $140K | $210K | $280K | $280K | $280K | $280K |
| A/R Days Reduction | $0 | $57K | $114K | $172K | $172K | $172K | $172K | $172K |
| Clean Claim Rate | $0 | $5K | $10K | $10K | $10K | $10K | $10K | $10K |
| Cumulative | $0 | $203K | $405K | $603K | $743K | $743K | $743K | $743K |
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 $743K is added at exit.
| Entry \ Exit | 9.0x | 10.0x | 11.0x | 11.5x | 12.0x |
|---|---|---|---|---|---|
| 8.0x | 97% / 29.8x | 102% / 33.5x | 106% / 37.1x | 108% / 39.0x | 110% / 40.8x |
| 9.0x | 92% / 26.1x | 97% / 29.4x | 101% / 32.6x | 103% / 34.3x | 105% / 35.9x |
| 10.0x | 88% / 23.2x | 92% / 26.1x | 96% / 29.1x | 98% / 30.5x | 100% / 32.0x |
| 11.0x | 83% / 20.8x | 88% / 23.4x | 92% / 26.1x | 94% / 27.5x | 96% / 28.8x |
| 12.0x | 80% / 18.8x | 84% / 21.2x | 88% / 23.7x | 90% / 24.9x | 92% / 26.1x |
Covenant Headroom (at 10x Entry, 6.5x Max Leverage)
Pro forma EBITDA can decline 70% before the 6.5x covenant trips. RCM uplift reduces leverage from 8.5x to 1.9x, adding 6.5 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 | $221K | — | $221K | 1.6% |
| Year 1 | $228K | +$495K | $723K | 5.1% |
| Year 2 | $235K | +$743K | $978K | 6.9% |
| Year 3 | $242K | +$743K | $985K | 7.0% |
| Year 4 | $249K | +$743K | $992K | 7.0% |
| Year 5 | $257K | +$743K | $1000K | 7.1% |
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 | $141K | $212K | $282K | $339K |
| Denial Rate Reductio | $140K | $210K | $280K | $336K |
| A/R Days Reduction | $86K | $129K | $172K | $206K |
| Clean Claim Rate | $5K | $7K | $10K | $12K |
| Total | $372K | $557K | $743K | $892K |
Peer Context — Where This Hospital Sits
Key metrics vs 38 size-matched peers. Low percentile on margin/efficiency metrics = more room for improvement = larger bridge opportunity.
| Metric | Hospital | P25 | P50 | P75 | Percentile |
|---|---|---|---|---|---|
| Op Margin | 1.6% | -13.4% | 1.5% | 16.2% | P50 |
| Net-to-Gross | 40.7% | 23.2% | 31.8% | 60.0% | P66 |
| Occupancy | 64.3% | 44.1% | 64.9% | 76.1% | P47 |
| Rev/Bed | $403K | $450K | $616K | $1.8M | P16 |
| Exp/Bed | $397K | $404K | $676K | $1.6M | P24 |
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.