Bridge Realization Estimate
ML model predicts what fraction of the bridge is achievable (accuracy: 60%, n=5,839)
Expected realization: 65% of modeled bridge. Strengths: Bed Count, Net-to-Gross Ratio. Risks: Occupancy Rate, Commercial Payer %. Risk-adjusted uplift: $1.6M (vs $2.5M 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 | $943K | $943K | $0 | 12mo |
| Denial Rate Reduction | 12.0% DEFAULT | 6.5% BENCHMARK | $908K | $26K | $934K | $0 | 12mo |
| A/R Days Reduction | 52.00 DEFAULT | 38.00 BENCHMARK | $145K | $429K | $574K | $1.8M | 9mo |
| Clean Claim Rate | 88.0% DEFAULT | 96.0% BENCHMARK | $0 | $30K | $30K | $0 | 6mo |
| Net Collection Rate | 93.5% DEFAULT | 51.0% 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 | $236K | $472K | $707K | $943K | $943K | $943K | $943K |
| Denial Rate Reduction | $0 | $233K | $467K | $700K | $934K | $934K | $934K | $934K |
| A/R Days Reduction | $0 | $191K | $383K | $574K | $574K | $574K | $574K | $574K |
| Clean Claim Rate | $0 | $15K | $30K | $30K | $30K | $30K | $30K | $30K |
| Cumulative | $0 | $676K | $1.4M | $2.0M | $2.5M | $2.5M | $2.5M | $2.5M |
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 $2.5M is added at exit.
| Entry \ Exit | 9.0x | 10.0x | 11.0x | 11.5x | 12.0x |
|---|---|---|---|---|---|
| 8.0x | 70% / 14.1x | 74% / 16.0x | 78% / 17.9x | 80% / 18.9x | 82% / 19.8x |
| 9.0x | 65% / 12.1x | 69% / 13.8x | 73% / 15.5x | 75% / 16.4x | 77% / 17.2x |
| 10.0x | 60% / 10.6x | 65% / 12.1x | 69% / 13.7x | 71% / 14.4x | 72% / 15.2x |
| 11.0x | 56% / 9.3x | 61% / 10.7x | 65% / 12.1x | 67% / 12.8x | 68% / 13.5x |
| 12.0x | 53% / 8.3x | 57% / 9.6x | 61% / 10.8x | 63% / 11.5x | 65% / 12.1x |
Covenant Headroom (at 10x Entry, 6.5x Max Leverage)
Pro forma EBITDA can decline 41% before the 6.5x covenant trips. RCM uplift reduces leverage from 8.5x to 3.8x, adding 4.6 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 | $2.1M | — | $2.1M | 4.4% |
| Year 1 | $2.1M | +$1.7M | $3.8M | 8.0% |
| Year 2 | $2.2M | +$2.5M | $4.7M | 9.9% |
| Year 3 | $2.2M | +$2.5M | $4.7M | 10.0% |
| Year 4 | $2.3M | +$2.5M | $4.8M | 10.2% |
| Year 5 | $2.4M | +$2.5M | $4.9M | 10.3% |
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 | $472K | $707K | $943K | $1.1M |
| Denial Rate Reductio | $467K | $700K | $934K | $1.1M |
| A/R Days Reduction | $287K | $430K | $574K | $689K |
| Clean Claim Rate | $15K | $23K | $30K | $36K |
| Total | $1.2M | $1.9M | $2.5M | $3.0M |
Peer Context — Where This Hospital Sits
Key metrics vs 276 size-matched peers. Low percentile on margin/efficiency metrics = more room for improvement = larger bridge opportunity.
| Metric | Hospital | P25 | P50 | P75 | Percentile |
|---|---|---|---|---|---|
| Op Margin | 4.4% | -21.0% | -3.2% | 10.7% | P64 |
| Net-to-Gross | 13.8% | 23.0% | 32.9% | 51.0% | P8 |
| Occupancy | 37.6% | 23.5% | 50.8% | 71.3% | P39 |
| Rev/Bed | $943K | $335K | $562K | $1.1M | P72 |
| Exp/Bed | $902K | $371K | $537K | $1.2M | P63 |
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.