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, Bed Count. Risks: Revenue per Bed, Commercial Payer %. Risk-adjusted uplift: $1.6M (vs $2.3M 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 | $886K | $886K | $0 | 12mo |
| Denial Rate Reduction | 12.0% DEFAULT | 6.5% BENCHMARK | $853K | $24K | $877K | $0 | 12mo |
| A/R Days Reduction | 52.00 DEFAULT | 38.00 BENCHMARK | $136K | $403K | $539K | $1.7M | 9mo |
| Clean Claim Rate | 88.0% DEFAULT | 96.0% BENCHMARK | $0 | $28K | $28K | $0 | 6mo |
| Net Collection Rate | 93.5% DEFAULT | 42.9% 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 | $221K | $443K | $664K | $886K | $886K | $886K | $886K |
| Denial Rate Reduction | $0 | $219K | $438K | $658K | $877K | $877K | $877K | $877K |
| A/R Days Reduction | $0 | $180K | $359K | $539K | $539K | $539K | $539K | $539K |
| Clean Claim Rate | $0 | $14K | $28K | $28K | $28K | $28K | $28K | $28K |
| Cumulative | $0 | $634K | $1.3M | $1.9M | $2.3M | $2.3M | $2.3M | $2.3M |
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 $2.3M is added at exit.
| Entry \ Exit | 9.0x | 10.0x | 11.0x | 11.5x | 12.0x |
|---|---|---|---|---|---|
| 8.0x | 84% / 21.2x | 89% / 23.9x | 93% / 26.6x | 95% / 28.0x | 97% / 29.4x |
| 9.0x | 79% / 18.5x | 84% / 20.9x | 88% / 23.3x | 90% / 24.5x | 91% / 25.7x |
| 10.0x | 75% / 16.3x | 79% / 18.5x | 83% / 20.7x | 85% / 21.7x | 87% / 22.8x |
| 11.0x | 71% / 14.5x | 75% / 16.5x | 79% / 18.5x | 81% / 19.5x | 83% / 20.5x |
| 12.0x | 67% / 13.1x | 72% / 14.9x | 76% / 16.7x | 77% / 17.6x | 79% / 18.5x |
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 | $1.1M | — | $1.1M | 2.4% |
| Year 1 | $1.1M | +$1.6M | $2.7M | 6.0% |
| Year 2 | $1.1M | +$2.3M | $3.5M | 7.8% |
| Year 3 | $1.2M | +$2.3M | $3.5M | 7.9% |
| Year 4 | $1.2M | +$2.3M | $3.5M | 8.0% |
| Year 5 | $1.2M | +$2.3M | $3.6M | 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 | $443K | $664K | $886K | $1.1M |
| Denial Rate Reductio | $438K | $658K | $877K | $1.1M |
| A/R Days Reduction | $269K | $404K | $539K | $647K |
| Clean Claim Rate | $14K | $21K | $28K | $34K |
| Total | $1.2M | $1.7M | $2.3M | $2.8M |
Peer Context — Where This Hospital Sits
Key metrics vs 60 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% | -11.3% | 0.6% | 11.9% | P54 |
| Net-to-Gross | 30.0% | 17.9% | 26.8% | 42.9% | P61 |
| Occupancy | 60.0% | 33.4% | 63.3% | 81.9% | P43 |
| Rev/Bed | $852K | $372K | $549K | $1.1M | P63 |
| Exp/Bed | $831K | $345K | $521K | $1.1M | P63 |
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.