Bridge Realization Estimate
ML model predicts what fraction of the bridge is achievable (accuracy: 60%, n=5,839)
Expected realization: 73% of modeled bridge. Strengths: Revenue per Bed, Bed Count. Risks: Occupancy Rate, Commercial Payer %. Risk-adjusted uplift: $1.8M (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 | $961K | $961K | $0 | 12mo |
| Denial Rate Reduction | 12.0% DEFAULT | 6.5% BENCHMARK | $925K | $26K | $952K | $0 | 12mo |
| A/R Days Reduction | 52.00 DEFAULT | 38.00 BENCHMARK | $147K | $437K | $585K | $1.8M | 9mo |
| Clean Claim Rate | 88.0% DEFAULT | 96.0% BENCHMARK | $0 | $31K | $31K | $0 | 6mo |
| Net Collection Rate | 93.5% DEFAULT | 71.5% 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 | $240K | $481K | $721K | $961K | $961K | $961K | $961K |
| Denial Rate Reduction | $0 | $238K | $476K | $714K | $952K | $952K | $952K | $952K |
| A/R Days Reduction | $0 | $195K | $390K | $585K | $585K | $585K | $585K | $585K |
| Clean Claim Rate | $0 | $15K | $31K | $31K | $31K | $31K | $31K | $31K |
| Cumulative | $0 | $689K | $1.4M | $2.1M | $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 | 47% / 6.9x | 52% / 8.1x | 56% / 9.2x | 58% / 9.8x | 59% / 10.3x |
| 9.0x | 42% / 5.8x | 47% / 6.8x | 51% / 7.8x | 53% / 8.3x | 55% / 8.8x |
| 10.0x | 37% / 4.9x | 42% / 5.8x | 46% / 6.7x | 48% / 7.2x | 50% / 7.6x |
| 11.0x | 33% / 4.2x | 38% / 5.0x | 42% / 5.8x | 44% / 6.2x | 46% / 6.6x |
| 12.0x | 29% / 3.5x | 34% / 4.3x | 38% / 5.0x | 40% / 5.4x | 42% / 5.8x |
Covenant Headroom (at 10x Entry, 6.5x Max Leverage)
Pro forma EBITDA can decline -6% before the 6.5x covenant trips. RCM uplift reduces leverage from 8.5x to 6.9x, adding 1.6 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 | $10.9M | — | $10.9M | 22.7% |
| Year 1 | $11.3M | +$1.7M | $12.9M | 26.9% |
| Year 2 | $11.6M | +$2.5M | $14.1M | 29.4% |
| Year 3 | $11.9M | +$2.5M | $14.5M | 30.1% |
| Year 4 | $12.3M | +$2.5M | $14.8M | 30.8% |
| Year 5 | $12.7M | +$2.5M | $15.2M | 31.6% |
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 | $481K | $721K | $961K | $1.2M |
| Denial Rate Reductio | $476K | $714K | $952K | $1.1M |
| A/R Days Reduction | $292K | $439K | $585K | $702K |
| Clean Claim Rate | $15K | $23K | $31K | $37K |
| Total | $1.3M | $1.9M | $2.5M | $3.0M |
Peer Context — Where This Hospital Sits
Key metrics vs 8 size-matched peers. Low percentile on margin/efficiency metrics = more room for improvement = larger bridge opportunity.
| Metric | Hospital | P25 | P50 | P75 | Percentile |
|---|---|---|---|---|---|
| Op Margin | 22.7% | -49.5% | -44.0% | -24.3% | P100 |
| Net-to-Gross | 34.1% | 19.4% | 31.1% | 58.0% | P50 |
| Occupancy | 30.7% | 12.9% | 16.3% | 21.0% | P88 |
| Rev/Bed | $8.0M | $709K | $838K | $2.2M | P100 |
| Exp/Bed | $6.2M | $1.2M | $1.4M | $2.7M | P100 |
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.