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: Commercial Payer %, Bed Count. Risks: Net-to-Gross Ratio, Revenue per Bed. 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 | $351K | $351K | $0 | 12mo |
| Denial Rate Reduction | 12.0% DEFAULT | 6.5% BENCHMARK | $338K | $10K | $348K | $0 | 12mo |
| A/R Days Reduction | 52.00 DEFAULT | 38.00 BENCHMARK | $54K | $160K | $214K | $674K | 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 | $88K | $176K | $264K | $351K | $351K | $351K | $351K |
| Denial Rate Reduction | $0 | $87K | $174K | $261K | $348K | $348K | $348K | $348K |
| A/R Days Reduction | $0 | $71K | $143K | $214K | $214K | $214K | $214K | $214K |
| Clean Claim Rate | $0 | $6K | $11K | $11K | $11K | $11K | $11K | $11K |
| Cumulative | $0 | $252K | $504K | $750K | $925K | $925K | $925K | $925K |
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 $925K is added at exit.
| Entry \ Exit | 9.0x | 10.0x | 11.0x | 11.5x | 12.0x |
|---|---|---|---|---|---|
| 8.0x | 91% / 25.4x | 95% / 28.5x | 100% / 31.7x | 102% / 33.3x | 103% / 34.9x |
| 9.0x | 86% / 22.2x | 90% / 25.0x | 94% / 27.8x | 96% / 29.2x | 98% / 30.6x |
| 10.0x | 81% / 19.6x | 86% / 22.2x | 90% / 24.7x | 92% / 26.0x | 94% / 27.3x |
| 11.0x | 77% / 17.6x | 82% / 19.9x | 86% / 22.2x | 88% / 23.3x | 90% / 24.5x |
| 12.0x | 74% / 15.8x | 78% / 17.9x | 82% / 20.1x | 84% / 21.1x | 86% / 22.2x |
Covenant Headroom (at 10x Entry, 6.5x Max Leverage)
Pro forma EBITDA can decline 65% before the 6.5x covenant trips. RCM uplift reduces leverage from 8.5x to 2.3x, adding 6.2 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 | $336K | — | $336K | 1.9% |
| Year 1 | $346K | +$616K | $962K | 5.5% |
| Year 2 | $356K | +$925K | $1.3M | 7.3% |
| Year 3 | $367K | +$925K | $1.3M | 7.4% |
| Year 4 | $378K | +$925K | $1.3M | 7.4% |
| Year 5 | $390K | +$925K | $1.3M | 7.5% |
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 | $176K | $264K | $351K | $422K |
| Denial Rate Reductio | $174K | $261K | $348K | $418K |
| A/R Days Reduction | $107K | $160K | $214K | $257K |
| Clean Claim Rate | $6K | $8K | $11K | $13K |
| Total | $462K | $693K | $925K | $1.1M |
Peer Context — Where This Hospital Sits
Key metrics vs 41 size-matched peers. Low percentile on margin/efficiency metrics = more room for improvement = larger bridge opportunity.
| Metric | Hospital | P25 | P50 | P75 | Percentile |
|---|---|---|---|---|---|
| Op Margin | 1.9% | -8.3% | -1.6% | 9.4% | P65 |
| Net-to-Gross | 72.3% | 49.6% | 54.4% | 66.8% | P88 |
| Occupancy | 50.0% | 13.5% | 20.4% | 37.6% | P88 |
| Rev/Bed | $976K | $589K | $961K | $1.2M | P57 |
| Exp/Bed | $958K | $619K | $961K | $1.2M | P46 |
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.