Bridge Realization Estimate
ML model predicts what fraction of the bridge is achievable (accuracy: 60%, n=5,839)
Expected realization: 72% of modeled bridge. Strengths: Occupancy Rate, Payer Diversity. Risks: Revenue per Bed, Commercial Payer %. Risk-adjusted uplift: $1.0M (vs $1.4M 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 | $531K | $531K | $0 | 12mo |
| Denial Rate Reduction | 12.0% DEFAULT | 6.5% BENCHMARK | $512K | $15K | $526K | $0 | 12mo |
| A/R Days Reduction | 52.00 DEFAULT | 38.00 BENCHMARK | $82K | $242K | $323K | $1.0M | 9mo |
| Clean Claim Rate | 88.0% DEFAULT | 96.0% BENCHMARK | $0 | $17K | $17K | $0 | 6mo |
| Net Collection Rate | 93.5% DEFAULT | 41.0% 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 | $133K | $266K | $399K | $531K | $531K | $531K | $531K |
| Denial Rate Reduction | $0 | $132K | $263K | $395K | $526K | $526K | $526K | $526K |
| A/R Days Reduction | $0 | $108K | $216K | $323K | $323K | $323K | $323K | $323K |
| Clean Claim Rate | $0 | $9K | $17K | $17K | $17K | $17K | $17K | $17K |
| Cumulative | $0 | $381K | $761K | $1.1M | $1.4M | $1.4M | $1.4M | $1.4M |
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 $1.4M is added at exit.
| Entry \ Exit | 9.0x | 10.0x | 11.0x | 11.5x | 12.0x |
|---|---|---|---|---|---|
| 8.0x | 51% / 7.8x | 55% / 9.0x | 59% / 10.2x | 61% / 10.8x | 63% / 11.5x |
| 9.0x | 46% / 6.5x | 50% / 7.6x | 54% / 8.7x | 56% / 9.3x | 58% / 9.8x |
| 10.0x | 41% / 5.6x | 46% / 6.5x | 50% / 7.5x | 52% / 8.0x | 53% / 8.5x |
| 11.0x | 37% / 4.8x | 41% / 5.7x | 46% / 6.5x | 48% / 7.0x | 49% / 7.5x |
| 12.0x | 33% / 4.1x | 38% / 4.9x | 42% / 5.7x | 44% / 6.2x | 46% / 6.5x |
Covenant Headroom (at 10x Entry, 6.5x Max Leverage)
Pro forma EBITDA can decline 3% before the 6.5x covenant trips. RCM uplift reduces leverage from 8.5x to 6.3x, adding 2.2 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 | $4.0M | — | $4.0M | 15.1% |
| Year 1 | $4.1M | +$932K | $5.1M | 19.0% |
| Year 2 | $4.3M | +$1.4M | $5.7M | 21.3% |
| Year 3 | $4.4M | +$1.4M | $5.8M | 21.7% |
| Year 4 | $4.5M | +$1.4M | $5.9M | 22.2% |
| Year 5 | $4.6M | +$1.4M | $6.0M | 22.7% |
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 | $266K | $399K | $531K | $638K |
| Denial Rate Reductio | $263K | $395K | $526K | $631K |
| A/R Days Reduction | $162K | $243K | $323K | $388K |
| Clean Claim Rate | $9K | $13K | $17K | $20K |
| Total | $699K | $1.0M | $1.4M | $1.7M |
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 | 15.1% | -8.3% | 1.9% | 14.5% | P77 |
| Net-to-Gross | 41.3% | 16.5% | 21.4% | 41.0% | P75 |
| Occupancy | 82.2% | 32.5% | 66.2% | 81.0% | P79 |
| Rev/Bed | $277K | $425K | $720K | $1.2M | P15 |
| Exp/Bed | $235K | $350K | $562K | $1.1M | P11 |
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.