Bridge Realization Estimate
ML model predicts what fraction of the bridge is achievable (accuracy: 60%, n=5,839)
Expected realization: 65% of modeled bridge. Risks: Revenue per Bed, Occupancy Rate. Risk-adjusted uplift: $0.8M (vs $1.2M 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 | $450K | $450K | $0 | 12mo |
| Denial Rate Reduction | 12.0% DEFAULT | 6.5% BENCHMARK | $433K | $12K | $445K | $0 | 12mo |
| A/R Days Reduction | 52.00 DEFAULT | 38.00 BENCHMARK | $69K | $205K | $274K | $863K | 9mo |
| Clean Claim Rate | 88.0% DEFAULT | 96.0% BENCHMARK | $0 | $14K | $14K | $0 | 6mo |
| Net Collection Rate | 93.5% DEFAULT | 48.2% 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 | $112K | $225K | $337K | $450K | $450K | $450K | $450K |
| Denial Rate Reduction | $0 | $111K | $223K | $334K | $445K | $445K | $445K | $445K |
| A/R Days Reduction | $0 | $91K | $182K | $274K | $274K | $274K | $274K | $274K |
| Clean Claim Rate | $0 | $7K | $14K | $14K | $14K | $14K | $14K | $14K |
| Cumulative | $0 | $322K | $644K | $959K | $1.2M | $1.2M | $1.2M | $1.2M |
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 $1.2M is added at exit.
| Entry \ Exit | 9.0x | 10.0x | 11.0x | 11.5x | 12.0x |
|---|---|---|---|---|---|
| 8.0x | 91% / 25.6x | 96% / 28.8x | 100% / 31.9x | 102% / 33.5x | 104% / 35.1x |
| 9.0x | 86% / 22.4x | 91% / 25.2x | 95% / 28.0x | 97% / 29.5x | 99% / 30.9x |
| 10.0x | 82% / 19.8x | 86% / 22.4x | 90% / 24.9x | 92% / 26.2x | 94% / 27.5x |
| 11.0x | 78% / 17.7x | 82% / 20.0x | 86% / 22.4x | 88% / 23.5x | 90% / 24.7x |
| 12.0x | 74% / 15.9x | 78% / 18.1x | 82% / 20.2x | 84% / 21.3x | 86% / 22.4x |
Covenant Headroom (at 10x Entry, 6.5x Max Leverage)
Pro forma EBITDA can decline 66% before the 6.5x covenant trips. RCM uplift reduces leverage from 8.5x to 2.2x, adding 6.2 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 | $426K | — | $426K | 1.9% |
| Year 1 | $439K | +$789K | $1.2M | 5.5% |
| Year 2 | $452K | +$1.2M | $1.6M | 7.3% |
| Year 3 | $465K | +$1.2M | $1.6M | 7.3% |
| Year 4 | $479K | +$1.2M | $1.7M | 7.4% |
| Year 5 | $494K | +$1.2M | $1.7M | 7.5% |
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 | $225K | $337K | $450K | $540K |
| Denial Rate Reductio | $223K | $334K | $445K | $534K |
| A/R Days Reduction | $137K | $205K | $274K | $328K |
| Clean Claim Rate | $7K | $11K | $14K | $17K |
| Total | $592K | $887K | $1.2M | $1.4M |
Peer Context — Where This Hospital Sits
Key metrics vs 220 size-matched peers. Low percentile on margin/efficiency metrics = more room for improvement = larger bridge opportunity.
| Metric | Hospital | P25 | P50 | P75 | Percentile |
|---|---|---|---|---|---|
| Op Margin | 1.9% | -14.2% | 1.0% | 11.0% | P53 |
| Net-to-Gross | 18.6% | 18.8% | 30.4% | 48.2% | P24 |
| Occupancy | 44.7% | 36.6% | 57.1% | 75.3% | P32 |
| Rev/Bed | $312K | $296K | $544K | $1.1M | P26 |
| Exp/Bed | $306K | $309K | $486K | $1.1M | P24 |
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.