Bridge Realization Estimate
ML model predicts what fraction of the bridge is achievable (accuracy: 60%, n=5,839)
Expected realization: 61% of modeled bridge. Strengths: Commercial Payer %, Bed Count. Risks: Occupancy Rate, Net-to-Gross Ratio. Risk-adjusted uplift: $0.6M (vs $0.9M 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 | $342K | $342K | $0 | 12mo |
| Denial Rate Reduction | 12.0% DEFAULT | 6.5% BENCHMARK | $329K | $9K | $339K | $0 | 12mo |
| A/R Days Reduction | 52.00 DEFAULT | 38.00 BENCHMARK | $53K | $156K | $208K | $656K | 9mo |
| Clean Claim Rate | 88.0% DEFAULT | 96.0% BENCHMARK | $0 | $11K | $11K | $0 | 6mo |
| Net Collection Rate | 93.5% DEFAULT | 66.8% 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 | $86K | $171K | $257K | $342K | $342K | $342K | $342K |
| Denial Rate Reduction | $0 | $85K | $169K | $254K | $339K | $339K | $339K | $339K |
| A/R Days Reduction | $0 | $69K | $139K | $208K | $208K | $208K | $208K | $208K |
| Clean Claim Rate | $0 | $5K | $11K | $11K | $11K | $11K | $11K | $11K |
| Cumulative | $0 | $245K | $490K | $730K | $900K | $900K | $900K | $900K |
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 $900K is added at exit.
| Entry \ Exit | 9.0x | 10.0x | 11.0x | 11.5x | 12.0x |
|---|---|---|---|---|---|
| 8.0x | 84% / 20.9x | 88% / 23.6x | 92% / 26.3x | 94% / 27.7x | 96% / 29.0x |
| 9.0x | 79% / 18.2x | 83% / 20.6x | 87% / 23.0x | 89% / 24.2x | 91% / 25.4x |
| 10.0x | 74% / 16.1x | 79% / 18.2x | 83% / 20.4x | 85% / 21.5x | 86% / 22.6x |
| 11.0x | 70% / 14.3x | 75% / 16.3x | 79% / 18.2x | 81% / 19.2x | 82% / 20.2x |
| 12.0x | 67% / 12.9x | 71% / 14.7x | 75% / 16.5x | 77% / 17.4x | 79% / 18.2x |
Covenant Headroom (at 10x Entry, 6.5x Max Leverage)
Pro forma EBITDA can decline 59% before the 6.5x covenant trips. RCM uplift reduces leverage from 8.5x to 2.7x, adding 5.8 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 | $419K | — | $419K | 2.4% |
| Year 1 | $432K | +$600K | $1.0M | 6.0% |
| Year 2 | $444K | +$900K | $1.3M | 7.9% |
| Year 3 | $458K | +$900K | $1.4M | 7.9% |
| Year 4 | $472K | +$900K | $1.4M | 8.0% |
| Year 5 | $486K | +$900K | $1.4M | 8.1% |
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 | $171K | $257K | $342K | $411K |
| Denial Rate Reductio | $169K | $254K | $339K | $407K |
| A/R Days Reduction | $104K | $156K | $208K | $250K |
| Clean Claim Rate | $5K | $8K | $11K | $13K |
| Total | $450K | $675K | $900K | $1.1M |
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 | 2.4% | -8.3% | -1.6% | 9.4% | P68 |
| Net-to-Gross | 67.1% | 49.6% | 54.4% | 66.8% | P75 |
| Occupancy | 14.1% | 13.2% | 20.5% | 38.4% | P32 |
| Rev/Bed | $1.0M | $589K | $961K | $1.2M | P60 |
| Exp/Bed | $982K | $608K | $959K | $1.2M | P52 |
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.