Bridge Realization Estimate
ML model predicts what fraction of the bridge is achievable (accuracy: 60%, n=5,839)
Expected realization: 64% of modeled bridge. Strengths: Bed Count, Net-to-Gross Ratio. Risks: Occupancy Rate, Commercial Payer %. Risk-adjusted uplift: $1.5M (vs $2.3M 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 | $887K | $887K | $0 | 12mo |
| Denial Rate Reduction | 12.0% DEFAULT | 6.5% BENCHMARK | $854K | $24K | $878K | $0 | 12mo |
| A/R Days Reduction | 52.00 DEFAULT | 38.00 BENCHMARK | $136K | $403K | $540K | $1.7M | 9mo |
| Clean Claim Rate | 88.0% DEFAULT | 96.0% BENCHMARK | $0 | $28K | $28K | $0 | 6mo |
| Net Collection Rate | 93.5% DEFAULT | 50.2% 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 | $222K | $443K | $665K | $887K | $887K | $887K | $887K |
| Denial Rate Reduction | $0 | $219K | $439K | $658K | $878K | $878K | $878K | $878K |
| A/R Days Reduction | $0 | $180K | $360K | $540K | $540K | $540K | $540K | $540K |
| Clean Claim Rate | $0 | $14K | $28K | $28K | $28K | $28K | $28K | $28K |
| Cumulative | $0 | $635K | $1.3M | $1.9M | $2.3M | $2.3M | $2.3M | $2.3M |
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 $2.3M is added at exit.
| Entry \ Exit | 9.0x | 10.0x | 11.0x | 11.5x | 12.0x |
|---|---|---|---|---|---|
| 8.0x | 56% / 9.3x | 61% / 10.7x | 65% / 12.1x | 66% / 12.8x | 68% / 13.4x |
| 9.0x | 51% / 7.9x | 56% / 9.1x | 60% / 10.4x | 61% / 11.0x | 63% / 11.6x |
| 10.0x | 47% / 6.8x | 51% / 7.9x | 55% / 9.0x | 57% / 9.6x | 59% / 10.1x |
| 11.0x | 42% / 5.9x | 47% / 6.9x | 51% / 7.9x | 53% / 8.4x | 55% / 8.9x |
| 12.0x | 39% / 5.1x | 43% / 6.0x | 47% / 7.0x | 49% / 7.4x | 51% / 7.9x |
Covenant Headroom (at 10x Entry, 6.5x Max Leverage)
Pro forma EBITDA can decline 16% before the 6.5x covenant trips. RCM uplift reduces leverage from 8.5x to 5.4x, adding 3.0 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 | $4.2M | — | $4.2M | 9.5% |
| Year 1 | $4.3M | +$1.6M | $5.9M | 13.3% |
| Year 2 | $4.5M | +$2.3M | $6.8M | 15.4% |
| Year 3 | $4.6M | +$2.3M | $6.9M | 15.7% |
| Year 4 | $4.7M | +$2.3M | $7.1M | 16.0% |
| Year 5 | $4.9M | +$2.3M | $7.2M | 16.3% |
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 | $443K | $665K | $887K | $1.1M |
| Denial Rate Reductio | $439K | $658K | $878K | $1.1M |
| A/R Days Reduction | $270K | $405K | $540K | $647K |
| Clean Claim Rate | $14K | $21K | $28K | $34K |
| Total | $1.2M | $1.7M | $2.3M | $2.8M |
Peer Context — Where This Hospital Sits
Key metrics vs 279 size-matched peers. Low percentile on margin/efficiency metrics = more room for improvement = larger bridge opportunity.
| Metric | Hospital | P25 | P50 | P75 | Percentile |
|---|---|---|---|---|---|
| Op Margin | 9.5% | -22.8% | -2.6% | 10.5% | P72 |
| Net-to-Gross | 15.2% | 24.4% | 34.4% | 50.3% | P9 |
| Occupancy | 32.0% | 20.0% | 44.7% | 70.5% | P38 |
| Rev/Bed | $1.1M | $381K | $584K | $1.2M | P73 |
| Exp/Bed | $979K | $402K | $622K | $1.3M | P65 |
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.