Bridge Realization Estimate
ML model predicts what fraction of the bridge is achievable (accuracy: 60%, n=5,839)
Expected realization: 75% of modeled bridge. Strengths: Occupancy Rate, Net-to-Gross Ratio. Risks: Revenue per Bed, Commercial Payer %. Risk-adjusted uplift: $1.2M (vs $1.7M 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 | $629K | $629K | $0 | 12mo |
| Denial Rate Reduction | 12.0% DEFAULT | 6.5% BENCHMARK | $606K | $17K | $623K | $0 | 12mo |
| A/R Days Reduction | 52.00 DEFAULT | 38.00 BENCHMARK | $97K | $286K | $383K | $1.2M | 9mo |
| Clean Claim Rate | 88.0% DEFAULT | 96.0% BENCHMARK | $0 | $20K | $20K | $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 | $157K | $315K | $472K | $629K | $629K | $629K | $629K |
| Denial Rate Reduction | $0 | $156K | $311K | $467K | $623K | $623K | $623K | $623K |
| A/R Days Reduction | $0 | $128K | $255K | $383K | $383K | $383K | $383K | $383K |
| Clean Claim Rate | $0 | $10K | $20K | $20K | $20K | $20K | $20K | $20K |
| Cumulative | $0 | $451K | $901K | $1.3M | $1.7M | $1.7M | $1.7M | $1.7M |
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 $1.7M is added at exit.
| Entry \ Exit | 9.0x | 10.0x | 11.0x | 11.5x | 12.0x |
|---|---|---|---|---|---|
| 8.0x | 48% / 7.1x | 52% / 8.2x | 56% / 9.4x | 58% / 10.0x | 60% / 10.5x |
| 9.0x | 43% / 5.9x | 47% / 7.0x | 52% / 8.0x | 53% / 8.5x | 55% / 9.0x |
| 10.0x | 38% / 5.0x | 43% / 5.9x | 47% / 6.9x | 49% / 7.3x | 51% / 7.8x |
| 11.0x | 34% / 4.3x | 39% / 5.1x | 43% / 5.9x | 45% / 6.4x | 47% / 6.8x |
| 12.0x | 30% / 3.6x | 35% / 4.4x | 39% / 5.2x | 41% / 5.6x | 43% / 5.9x |
Covenant Headroom (at 10x Entry, 6.5x Max Leverage)
Pro forma EBITDA can decline -4% before the 6.5x covenant trips. RCM uplift reduces leverage from 8.5x to 6.7x, adding 1.7 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 | $6.5M | — | $6.5M | 20.7% |
| Year 1 | $6.7M | +$1.1M | $7.8M | 24.8% |
| Year 2 | $6.9M | +$1.7M | $8.6M | 27.2% |
| Year 3 | $7.1M | +$1.7M | $8.8M | 27.9% |
| Year 4 | $7.3M | +$1.7M | $9.0M | 28.6% |
| Year 5 | $7.6M | +$1.7M | $9.2M | 29.3% |
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 | $315K | $472K | $629K | $755K |
| Denial Rate Reductio | $311K | $467K | $623K | $747K |
| A/R Days Reduction | $191K | $287K | $383K | $459K |
| Clean Claim Rate | $10K | $15K | $20K | $24K |
| Total | $827K | $1.2M | $1.7M | $2.0M |
Peer Context — Where This Hospital Sits
Key metrics vs 227 size-matched peers. Low percentile on margin/efficiency metrics = more room for improvement = larger bridge opportunity.
| Metric | Hospital | P25 | P50 | P75 | Percentile |
|---|---|---|---|---|---|
| Op Margin | 20.7% | -14.4% | 0.1% | 12.1% | P88 |
| Net-to-Gross | 11.8% | 21.3% | 31.3% | 51.0% | P3 |
| Occupancy | 90.3% | 31.0% | 56.1% | 74.0% | P95 |
| Rev/Bed | $594K | $327K | $529K | $1.0M | P57 |
| Exp/Bed | $471K | $333K | $494K | $1.1M | P46 |
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.