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: Revenue per Bed, Bed Count. Risks: Occupancy Rate, Commercial Payer %. Risk-adjusted uplift: $3.0M (vs $4.7M 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 | $1.8M | $1.8M | $0 | 12mo |
| Denial Rate Reduction | 12.0% DEFAULT | 6.5% BENCHMARK | $1.7M | $49K | $1.8M | $0 | 12mo |
| A/R Days Reduction | 52.00 DEFAULT | 38.00 BENCHMARK | $275K | $816K | $1.1M | $3.4M | 9mo |
| Clean Claim Rate | 88.0% DEFAULT | 96.0% BENCHMARK | $0 | $57K | $57K | $0 | 6mo |
| Net Collection Rate | 93.5% DEFAULT | 54.0% 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 | $448K | $897K | $1.3M | $1.8M | $1.8M | $1.8M | $1.8M |
| Denial Rate Reduction | $0 | $444K | $888K | $1.3M | $1.8M | $1.8M | $1.8M | $1.8M |
| A/R Days Reduction | $0 | $364K | $727K | $1.1M | $1.1M | $1.1M | $1.1M | $1.1M |
| Clean Claim Rate | $0 | $29K | $57K | $57K | $57K | $57K | $57K | $57K |
| Cumulative | $0 | $1.3M | $2.6M | $3.8M | $4.7M | $4.7M | $4.7M | $4.7M |
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 $4.7M is added at exit.
| Entry \ Exit | 9.0x | 10.0x | 11.0x | 11.5x | 12.0x |
|---|---|---|---|---|---|
| 8.0x | 45% / 6.5x | 50% / 7.5x | 54% / 8.6x | 56% / 9.2x | 57% / 9.7x |
| 9.0x | 40% / 5.4x | 45% / 6.3x | 49% / 7.3x | 51% / 7.8x | 52% / 8.2x |
| 10.0x | 35% / 4.5x | 40% / 5.4x | 44% / 6.2x | 46% / 6.7x | 48% / 7.1x |
| 11.0x | 31% / 3.8x | 36% / 4.6x | 40% / 5.4x | 42% / 5.8x | 44% / 6.2x |
| 12.0x | 26% / 3.2x | 32% / 3.9x | 36% / 4.7x | 38% / 5.0x | 40% / 5.4x |
Covenant Headroom (at 10x Entry, 6.5x Max Leverage)
Pro forma EBITDA can decline -12% before the 6.5x covenant trips. RCM uplift reduces leverage from 8.5x to 7.2x, adding 1.2 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 | $28.2M | — | $28.2M | 31.5% |
| Year 1 | $29.1M | +$3.1M | $32.2M | 35.9% |
| Year 2 | $29.9M | +$4.7M | $34.6M | 38.6% |
| Year 3 | $30.8M | +$4.7M | $35.5M | 39.6% |
| Year 4 | $31.8M | +$4.7M | $36.5M | 40.7% |
| Year 5 | $32.7M | +$4.7M | $37.4M | 41.7% |
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 | $897K | $1.3M | $1.8M | $2.2M |
| Denial Rate Reductio | $888K | $1.3M | $1.8M | $2.1M |
| A/R Days Reduction | $546K | $818K | $1.1M | $1.3M |
| Clean Claim Rate | $29K | $43K | $57K | $69K |
| Total | $2.4M | $3.5M | $4.7M | $5.7M |
Peer Context — Where This Hospital Sits
Key metrics vs 229 size-matched peers. Low percentile on margin/efficiency metrics = more room for improvement = larger bridge opportunity.
| Metric | Hospital | P25 | P50 | P75 | Percentile |
|---|---|---|---|---|---|
| Op Margin | 31.5% | -40.1% | -8.9% | 9.2% | P97 |
| Net-to-Gross | 41.6% | 25.6% | 37.7% | 54.0% | P56 |
| Occupancy | 16.5% | 12.5% | 26.8% | 53.0% | P33 |
| Rev/Bed | $4.3M | $439K | $654K | $1.3M | P94 |
| Exp/Bed | $2.9M | $469K | $877K | $1.4M | P91 |
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.