Bridge Realization Estimate
ML model predicts what fraction of the bridge is achievable (accuracy: 60%, n=5,839)
Expected realization: 75% of modeled bridge. Strengths: Occupancy Rate, Net-to-Gross Ratio. Risks: Revenue per Bed. Risk-adjusted uplift: $1.3M (vs $1.8M 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 | $675K | $675K | $0 | 12mo |
| Denial Rate Reduction | 12.0% DEFAULT | 6.5% BENCHMARK | $649K | $19K | $668K | $0 | 12mo |
| A/R Days Reduction | 52.00 DEFAULT | 38.00 BENCHMARK | $104K | $307K | $410K | $1.3M | 9mo |
| Clean Claim Rate | 88.0% DEFAULT | 96.0% BENCHMARK | $0 | $22K | $22K | $0 | 6mo |
| Net Collection Rate | 93.5% DEFAULT | 42.4% 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 | $169K | $337K | $506K | $675K | $675K | $675K | $675K |
| Denial Rate Reduction | $0 | $167K | $334K | $501K | $668K | $668K | $668K | $668K |
| A/R Days Reduction | $0 | $137K | $274K | $410K | $410K | $410K | $410K | $410K |
| Clean Claim Rate | $0 | $11K | $22K | $22K | $22K | $22K | $22K | $22K |
| Cumulative | $0 | $483K | $966K | $1.4M | $1.8M | $1.8M | $1.8M | $1.8M |
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 $1.8M is added at exit.
| Entry \ Exit | 9.0x | 10.0x | 11.0x | 11.5x | 12.0x |
|---|---|---|---|---|---|
| 8.0x | 135% / 71.4x | 140% / 79.7x | 145% / 88.0x | 147% / 92.2x | 149% / 96.3x |
| 9.0x | 129% / 63.1x | 134% / 70.5x | 139% / 77.9x | 141% / 81.6x | 143% / 85.3x |
| 10.0x | 124% / 56.5x | 129% / 63.1x | 134% / 69.8x | 136% / 73.1x | 138% / 76.4x |
| 11.0x | 120% / 51.1x | 125% / 57.1x | 129% / 63.1x | 131% / 66.2x | 133% / 69.2x |
| 12.0x | 116% / 46.5x | 120% / 52.1x | 125% / 57.6x | 127% / 60.4x | 129% / 63.1x |
Covenant Headroom (at 10x Entry, 6.5x Max Leverage)
Pro forma EBITDA can decline 87% before the 6.5x covenant trips. RCM uplift reduces leverage from 8.5x to 0.8x, adding 7.6 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 | $196K | — | $196K | 0.6% |
| Year 1 | $202K | +$1.2M | $1.4M | 4.1% |
| Year 2 | $208K | +$1.8M | $2.0M | 5.9% |
| Year 3 | $214K | +$1.8M | $2.0M | 5.9% |
| Year 4 | $221K | +$1.8M | $2.0M | 5.9% |
| Year 5 | $227K | +$1.8M | $2.0M | 5.9% |
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% |
|---|---|---|---|---|
| Cost to Collect | $337K | $506K | $675K | $810K |
| Denial Rate Reductio | $334K | $501K | $668K | $801K |
| A/R Days Reduction | $205K | $308K | $410K | $493K |
| Clean Claim Rate | $11K | $16K | $22K | $26K |
| Total | $887K | $1.3M | $1.8M | $2.1M |
Peer Context — Where This Hospital Sits
Key metrics vs 63 size-matched peers. Low percentile on margin/efficiency metrics = more room for improvement = larger bridge opportunity.
| Metric | Hospital | P25 | P50 | P75 | Percentile |
|---|---|---|---|---|---|
| Op Margin | 0.6% | -11.2% | 0.6% | 12.1% | P49 |
| Net-to-Gross | 13.8% | 17.1% | 22.1% | 42.4% | P8 |
| Occupancy | 91.3% | 28.9% | 62.4% | 74.4% | P98 |
| Rev/Bed | $519K | $400K | $550K | $1.1M | P43 |
| Exp/Bed | $516K | $349K | $548K | $1.1M | P41 |
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.