Bridge Realization Estimate
ML model predicts what fraction of the bridge is achievable (accuracy: 60%, n=5,839)
Expected realization: 71% of modeled bridge. Strengths: Occupancy Rate, Bed Count. Risks: Revenue per Bed, Net-to-Gross Ratio. Risk-adjusted uplift: $0.7M (vs $1.0M 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 | $365K | $365K | $0 | 12mo |
| Denial Rate Reduction | 12.0% DEFAULT | 6.5% BENCHMARK | $351K | $10K | $361K | $0 | 12mo |
| A/R Days Reduction | 52.00 DEFAULT | 38.00 BENCHMARK | $56K | $166K | $222K | $699K | 9mo |
| Clean Claim Rate | 88.0% DEFAULT | 96.0% BENCHMARK | $0 | $12K | $12K | $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 | $91K | $182K | $273K | $365K | $365K | $365K | $365K |
| Denial Rate Reduction | $0 | $90K | $180K | $271K | $361K | $361K | $361K | $361K |
| A/R Days Reduction | $0 | $74K | $148K | $222K | $222K | $222K | $222K | $222K |
| Clean Claim Rate | $0 | $6K | $12K | $12K | $12K | $12K | $12K | $12K |
| Cumulative | $0 | $261K | $522K | $778K | $959K | $959K | $959K | $959K |
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 $959K is added at exit.
| Entry \ Exit | 9.0x | 10.0x | 11.0x | 11.5x | 12.0x |
|---|---|---|---|---|---|
| 8.0x | 88% / 23.4x | 92% / 26.4x | 97% / 29.4x | 99% / 30.9x | 100% / 32.3x |
| 9.0x | 83% / 20.5x | 87% / 23.1x | 91% / 25.7x | 93% / 27.1x | 95% / 28.4x |
| 10.0x | 78% / 18.1x | 83% / 20.5x | 87% / 22.8x | 89% / 24.0x | 91% / 25.2x |
| 11.0x | 74% / 16.2x | 79% / 18.3x | 83% / 20.5x | 85% / 21.6x | 87% / 22.6x |
| 12.0x | 71% / 14.5x | 75% / 16.5x | 79% / 18.5x | 81% / 19.5x | 83% / 20.5x |
Covenant Headroom (at 10x Entry, 6.5x Max Leverage)
Pro forma EBITDA can decline 63% before the 6.5x covenant trips. RCM uplift reduces leverage from 8.5x to 2.4x, adding 6.0 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 | $385K | — | $385K | 2.1% |
| Year 1 | $397K | +$639K | $1.0M | 5.7% |
| Year 2 | $409K | +$959K | $1.4M | 7.5% |
| Year 3 | $421K | +$959K | $1.4M | 7.6% |
| Year 4 | $433K | +$959K | $1.4M | 7.6% |
| Year 5 | $446K | +$959K | $1.4M | 7.7% |
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 | $182K | $273K | $365K | $437K |
| Denial Rate Reductio | $180K | $271K | $361K | $433K |
| A/R Days Reduction | $111K | $166K | $222K | $266K |
| Clean Claim Rate | $6K | $9K | $12K | $14K |
| Total | $479K | $719K | $959K | $1.2M |
Peer Context — Where This Hospital Sits
Key metrics vs 74 size-matched peers. Low percentile on margin/efficiency metrics = more room for improvement = larger bridge opportunity.
| Metric | Hospital | P25 | P50 | P75 | Percentile |
|---|---|---|---|---|---|
| Op Margin | 2.1% | -12.1% | -0.7% | 9.3% | P58 |
| Net-to-Gross | 60.4% | 18.7% | 27.8% | 41.0% | P93 |
| Occupancy | 73.5% | 24.3% | 55.8% | 73.4% | P74 |
| Rev/Bed | $365K | $380K | $534K | $986K | P23 |
| Exp/Bed | $357K | $348K | $521K | $1.0M | P27 |
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.