Bridge Realization Estimate
ML model predicts what fraction of the bridge is achievable (accuracy: 60%, n=5,839)
Expected realization: 70% of modeled bridge. Strengths: Occupancy Rate, Commercial Payer %. Risks: Revenue per Bed, Net-to-Gross Ratio. Risk-adjusted uplift: $0.6M (vs $0.8M 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 | $321K | $321K | $0 | 12mo |
| Denial Rate Reduction | 12.0% DEFAULT | 6.5% BENCHMARK | $309K | $9K | $318K | $0 | 12mo |
| A/R Days Reduction | 52.00 DEFAULT | 38.00 BENCHMARK | $49K | $146K | $196K | $616K | 9mo |
| Clean Claim Rate | 88.0% DEFAULT | 96.0% BENCHMARK | $0 | $10K | $10K | $0 | 6mo |
| Net Collection Rate | 93.5% DEFAULT | 40.9% 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 | $80K | $161K | $241K | $321K | $321K | $321K | $321K |
| Denial Rate Reduction | $0 | $80K | $159K | $239K | $318K | $318K | $318K | $318K |
| A/R Days Reduction | $0 | $65K | $130K | $196K | $196K | $196K | $196K | $196K |
| Clean Claim Rate | $0 | $5K | $10K | $10K | $10K | $10K | $10K | $10K |
| Cumulative | $0 | $230K | $460K | $686K | $845K | $845K | $845K | $845K |
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 $845K is added at exit.
| Entry \ Exit | 9.0x | 10.0x | 11.0x | 11.5x | 12.0x |
|---|---|---|---|---|---|
| 8.0x | 47% / 6.8x | 51% / 8.0x | 55% / 9.1x | 57% / 9.6x | 59% / 10.2x |
| 9.0x | 42% / 5.7x | 46% / 6.7x | 50% / 7.7x | 52% / 8.2x | 54% / 8.7x |
| 10.0x | 37% / 4.8x | 42% / 5.7x | 46% / 6.6x | 48% / 7.1x | 50% / 7.5x |
| 11.0x | 33% / 4.1x | 37% / 4.9x | 42% / 5.7x | 44% / 6.1x | 46% / 6.5x |
| 12.0x | 28% / 3.5x | 33% / 4.2x | 38% / 5.0x | 40% / 5.3x | 42% / 5.7x |
Covenant Headroom (at 10x Entry, 6.5x Max Leverage)
Pro forma EBITDA can decline -7% before the 6.5x covenant trips. RCM uplift reduces leverage from 8.5x to 6.9x, adding 1.5 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 | $3.8M | — | $3.8M | 23.9% |
| Year 1 | $4.0M | +$564K | $4.5M | 28.1% |
| Year 2 | $4.1M | +$845K | $4.9M | 30.6% |
| Year 3 | $4.2M | +$845K | $5.0M | 31.4% |
| Year 4 | $4.3M | +$845K | $5.2M | 32.2% |
| Year 5 | $4.5M | +$845K | $5.3M | 33.0% |
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 | $161K | $241K | $321K | $386K |
| Denial Rate Reductio | $159K | $239K | $318K | $382K |
| A/R Days Reduction | $98K | $147K | $196K | $235K |
| Clean Claim Rate | $5K | $8K | $10K | $12K |
| Total | $423K | $634K | $845K | $1.0M |
Peer Context — Where This Hospital Sits
Key metrics vs 68 size-matched peers. Low percentile on margin/efficiency metrics = more room for improvement = larger bridge opportunity.
| Metric | Hospital | P25 | P50 | P75 | Percentile |
|---|---|---|---|---|---|
| Op Margin | 23.9% | -12.4% | 0.1% | 9.3% | P95 |
| Net-to-Gross | 75.5% | 19.8% | 27.9% | 40.9% | P97 |
| Occupancy | 68.4% | 25.8% | 51.6% | 71.3% | P72 |
| Rev/Bed | $402K | $390K | $537K | $1.0M | P27 |
| Exp/Bed | $306K | $350K | $539K | $1.1M | P16 |
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.