Bridge Realization Estimate
ML model predicts what fraction of the bridge is achievable (accuracy: 60%, n=5,839)
Expected realization: 67% of modeled bridge. Strengths: Commercial Payer %, Bed Count. Risks: Revenue per Bed, Net-to-Gross Ratio. Risk-adjusted uplift: $0.8M (vs $1.2M 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 |
|---|---|---|---|---|---|---|---|
| Cost to Collect | 4.5% DEFAULT | 2.5% BENCHMARK | $0 | $445K | $445K | $0 | 12mo |
| Denial Rate Reduction | 12.0% DEFAULT | 6.5% BENCHMARK | $428K | $12K | $440K | $0 | 12mo |
| A/R Days Reduction | 52.00 DEFAULT | 38.00 BENCHMARK | $68K | $202K | $271K | $853K | 9mo |
| Clean Claim Rate | 88.0% DEFAULT | 96.0% BENCHMARK | $0 | $14K | $14K | $0 | 6mo |
| Net Collection Rate | 93.5% DEFAULT | 48.7% 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 | $111K | $222K | $334K | $445K | $445K | $445K | $445K |
| Denial Rate Reduction | $0 | $110K | $220K | $330K | $440K | $440K | $440K | $440K |
| A/R Days Reduction | $0 | $90K | $180K | $271K | $271K | $271K | $271K | $271K |
| Clean Claim Rate | $0 | $7K | $14K | $14K | $14K | $14K | $14K | $14K |
| Cumulative | $0 | $319K | $637K | $949K | $1.2M | $1.2M | $1.2M | $1.2M |
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 $1.2M is added at exit.
| Entry \ Exit | 9.0x | 10.0x | 11.0x | 11.5x | 12.0x |
|---|---|---|---|---|---|
| 8.0x | 51% / 8.0x | 56% / 9.2x | 60% / 10.4x | 62% / 11.1x | 64% / 11.7x |
| 9.0x | 46% / 6.7x | 51% / 7.8x | 55% / 8.9x | 57% / 9.5x | 59% / 10.0x |
| 10.0x | 42% / 5.7x | 46% / 6.7x | 50% / 7.7x | 52% / 8.2x | 54% / 8.7x |
| 11.0x | 37% / 4.9x | 42% / 5.8x | 46% / 6.7x | 48% / 7.2x | 50% / 7.6x |
| 12.0x | 33% / 4.2x | 38% / 5.0x | 42% / 5.9x | 44% / 6.3x | 46% / 6.7x |
Covenant Headroom (at 10x Entry, 6.5x Max Leverage)
Pro forma EBITDA can decline 5% before the 6.5x covenant trips. RCM uplift reduces leverage from 8.5x to 6.2x, adding 2.3 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 | $3.1M | — | $3.1M | 14.1% |
| Year 1 | $3.2M | +$780K | $4.0M | 18.1% |
| Year 2 | $3.3M | +$1.2M | $4.5M | 20.3% |
| Year 3 | $3.4M | +$1.2M | $4.6M | 20.7% |
| Year 4 | $3.5M | +$1.2M | $4.7M | 21.2% |
| Year 5 | $3.6M | +$1.2M | $4.8M | 21.7% |
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 | $222K | $334K | $445K | $534K |
| Denial Rate Reductio | $220K | $330K | $440K | $528K |
| A/R Days Reduction | $135K | $203K | $271K | $325K |
| Clean Claim Rate | $7K | $11K | $14K | $17K |
| Total | $585K | $878K | $1.2M | $1.4M |
Peer Context — Where This Hospital Sits
Key metrics vs 48 size-matched peers. Low percentile on margin/efficiency metrics = more room for improvement = larger bridge opportunity.
| Metric | Hospital | P25 | P50 | P75 | Percentile |
|---|---|---|---|---|---|
| Op Margin | 14.1% | -7.1% | 2.7% | 17.3% | P64 |
| Net-to-Gross | 66.6% | 19.5% | 27.2% | 48.7% | P85 |
| Occupancy | 51.3% | 46.2% | 66.1% | 75.7% | P29 |
| Rev/Bed | $348K | $443K | $726K | $1.6M | P13 |
| Exp/Bed | $298K | $377K | $657K | $1.3M | 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.