Bridge Realization Estimate
ML model predicts what fraction of the bridge is achievable (accuracy: 60%, n=5,839)
Expected realization: 62% of modeled bridge. Strengths: Commercial Payer %, Bed Count. Risks: Occupancy Rate, Revenue per Bed. Risk-adjusted uplift: $0.1M (vs $0.2M 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 |
|---|---|---|---|---|---|---|---|
| Denial Rate Reduction | 12.0% DEFAULT | 6.5% BENCHMARK | $61K | $8K | $69K | $0 | 12mo |
| Cost to Collect | 4.5% DEFAULT | 2.5% BENCHMARK | $0 | $63K | $63K | $0 | 12mo |
| A/R Days Reduction | 52.00 DEFAULT | 38.00 BENCHMARK | $10K | $29K | $38K | $121K | 9mo |
| Clean Claim Rate | 88.0% DEFAULT | 96.0% BENCHMARK | $0 | $10K | $10K | $0 | 6mo |
| Net Collection Rate | 93.5% DEFAULT | 45.7% 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 |
|---|---|---|---|---|---|---|---|---|
| Denial Rate Reduction | $0 | $17K | $35K | $52K | $69K | $69K | $69K | $69K |
| Cost to Collect | $0 | $16K | $32K | $47K | $63K | $63K | $63K | $63K |
| A/R Days Reduction | $0 | $13K | $26K | $38K | $38K | $38K | $38K | $38K |
| Clean Claim Rate | $0 | $5K | $10K | $10K | $10K | $10K | $10K | $10K |
| Cumulative | $0 | $51K | $101K | $147K | $180K | $180K | $180K | $180K |
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 $180K is added at exit.
| Entry \ Exit | 9.0x | 10.0x | 11.0x | 11.5x | 12.0x |
|---|---|---|---|---|---|
| 8.0x | 116% / 46.8x | 121% / 52.3x | 125% / 57.9x | 127% / 60.6x | 129% / 63.4x |
| 9.0x | 110% / 41.2x | 115% / 46.1x | 120% / 51.1x | 122% / 53.5x | 124% / 56.0x |
| 10.0x | 106% / 36.8x | 110% / 41.2x | 115% / 45.6x | 117% / 47.9x | 119% / 50.1x |
| 11.0x | 101% / 33.1x | 106% / 37.2x | 110% / 41.2x | 112% / 43.2x | 114% / 45.2x |
| 12.0x | 98% / 30.1x | 102% / 33.8x | 106% / 37.5x | 108% / 39.4x | 110% / 41.2x |
Covenant Headroom (at 10x Entry, 6.5x Max Leverage)
Pro forma EBITDA can decline 81% before the 6.5x covenant trips. RCM uplift reduces leverage from 8.5x to 1.3x, adding 7.2 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 | $32K | — | $32K | 1.0% |
| Year 1 | $33K | +$120K | $153K | 4.8% |
| Year 2 | $34K | +$180K | $214K | 6.8% |
| Year 3 | $35K | +$180K | $215K | 6.8% |
| Year 4 | $36K | +$180K | $216K | 6.8% |
| Year 5 | $37K | +$180K | $217K | 6.9% |
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% |
|---|---|---|---|---|
| Denial Rate Reductio | $35K | $52K | $69K | $83K |
| Cost to Collect | $32K | $47K | $63K | $76K |
| A/R Days Reduction | $19K | $29K | $38K | $46K |
| Clean Claim Rate | $5K | $7K | $10K | $12K |
| Total | $90K | $135K | $180K | $216K |
Peer Context — Where This Hospital Sits
Key metrics vs 56 size-matched peers. Low percentile on margin/efficiency metrics = more room for improvement = larger bridge opportunity.
| Metric | Hospital | P25 | P50 | P75 | Percentile |
|---|---|---|---|---|---|
| Op Margin | 1.0% | -14.0% | -0.8% | 9.2% | P55 |
| Net-to-Gross | 27.9% | 20.2% | 29.8% | 45.7% | P43 |
| Occupancy | 24.6% | 21.2% | 35.4% | 69.7% | P29 |
| Rev/Bed | $126K | $401K | $536K | $950K | P7 |
| Exp/Bed | $125K | $355K | $573K | $1.0M | P4 |
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.