Bridge Realization Estimate
ML model predicts what fraction of the bridge is achievable (accuracy: 60%, n=5,839)
Expected realization: 69% of modeled bridge. Strengths: Occupancy Rate, Commercial Payer %. Risks: Revenue per Bed, Net-to-Gross Ratio. Risk-adjusted uplift: $0.7M (vs $1.0M 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 | $364K | $364K | $0 | 12mo |
| Denial Rate Reduction | 12.0% DEFAULT | 6.5% BENCHMARK | $350K | $10K | $360K | $0 | 12mo |
| A/R Days Reduction | 52.00 DEFAULT | 38.00 BENCHMARK | $56K | $166K | $222K | $698K | 9mo |
| Clean Claim Rate | 88.0% DEFAULT | 96.0% BENCHMARK | $0 | $12K | $12K | $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 | $91K | $182K | $273K | $364K | $364K | $364K | $364K |
| Denial Rate Reduction | $0 | $90K | $180K | $270K | $360K | $360K | $360K | $360K |
| A/R Days Reduction | $0 | $74K | $148K | $222K | $222K | $222K | $222K | $222K |
| Clean Claim Rate | $0 | $6K | $12K | $12K | $12K | $12K | $12K | $12K |
| Cumulative | $0 | $261K | $522K | $777K | $958K | $958K | $958K | $958K |
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 $958K is added at exit.
| Entry \ Exit | 9.0x | 10.0x | 11.0x | 11.5x | 12.0x |
|---|---|---|---|---|---|
| 8.0x | 121% / 53.1x | 126% / 59.3x | 131% / 65.6x | 133% / 68.7x | 135% / 71.8x |
| 9.0x | 116% / 46.8x | 121% / 52.4x | 125% / 57.9x | 127% / 60.7x | 129% / 63.5x |
| 10.0x | 111% / 41.8x | 116% / 46.8x | 120% / 51.8x | 122% / 54.3x | 124% / 56.8x |
| 11.0x | 107% / 37.7x | 111% / 42.3x | 116% / 46.8x | 118% / 49.1x | 120% / 51.4x |
| 12.0x | 103% / 34.3x | 108% / 38.5x | 112% / 42.6x | 114% / 44.7x | 116% / 46.8x |
Covenant Headroom (at 10x Entry, 6.5x Max Leverage)
Pro forma EBITDA can decline 83% before the 6.5x covenant trips. RCM uplift reduces leverage from 8.5x to 1.1x, adding 7.3 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 | $146K | — | $146K | 0.8% |
| Year 1 | $151K | +$638K | $789K | 4.3% |
| Year 2 | $155K | +$958K | $1.1M | 6.1% |
| Year 3 | $160K | +$958K | $1.1M | 6.1% |
| Year 4 | $165K | +$958K | $1.1M | 6.2% |
| Year 5 | $170K | +$958K | $1.1M | 6.2% |
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 | $182K | $273K | $364K | $437K |
| Denial Rate Reductio | $180K | $270K | $360K | $433K |
| A/R Days Reduction | $111K | $166K | $222K | $266K |
| Clean Claim Rate | $6K | $9K | $12K | $14K |
| Total | $479K | $718K | $958K | $1.1M |
Peer Context — Where This Hospital Sits
Key metrics vs 42 size-matched peers. Low percentile on margin/efficiency metrics = more room for improvement = larger bridge opportunity.
| Metric | Hospital | P25 | P50 | P75 | Percentile |
|---|---|---|---|---|---|
| Op Margin | 0.8% | -11.9% | 1.8% | 16.6% | P40 |
| Net-to-Gross | 71.3% | 22.2% | 30.0% | 60.0% | P90 |
| Occupancy | 60.8% | 44.1% | 65.3% | 75.5% | P40 |
| Rev/Bed | $433K | $454K | $672K | $1.8M | P17 |
| Exp/Bed | $430K | $404K | $676K | $1.7M | P29 |
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.