Bridge Realization Estimate
ML model predicts what fraction of the bridge is achievable (accuracy: 60%, n=5,839)
Expected realization: 66% of modeled bridge. Strengths: Occupancy Rate. Risks: Revenue per Bed, Net-to-Gross Ratio. Risk-adjusted uplift: $0.9M (vs $1.4M 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 | $534K | $534K | $0 | 12mo |
| Denial Rate Reduction | 12.0% DEFAULT | 6.5% BENCHMARK | $514K | $15K | $528K | $0 | 12mo |
| A/R Days Reduction | 52.00 DEFAULT | 38.00 BENCHMARK | $82K | $243K | $325K | $1.0M | 9mo |
| Clean Claim Rate | 88.0% DEFAULT | 96.0% BENCHMARK | $0 | $17K | $17K | $0 | 6mo |
| Net Collection Rate | 93.5% DEFAULT | 45.9% 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 | $133K | $267K | $400K | $534K | $534K | $534K | $534K |
| Denial Rate Reduction | $0 | $132K | $264K | $396K | $528K | $528K | $528K | $528K |
| A/R Days Reduction | $0 | $108K | $216K | $325K | $325K | $325K | $325K | $325K |
| Clean Claim Rate | $0 | $9K | $17K | $17K | $17K | $17K | $17K | $17K |
| Cumulative | $0 | $382K | $764K | $1.1M | $1.4M | $1.4M | $1.4M | $1.4M |
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 $1.4M is added at exit.
| Entry \ Exit | 9.0x | 10.0x | 11.0x | 11.5x | 12.0x |
|---|---|---|---|---|---|
| 8.0x | 63% / 11.6x | 68% / 13.2x | 72% / 14.9x | 74% / 15.7x | 75% / 16.6x |
| 9.0x | 58% / 9.9x | 63% / 11.4x | 67% / 12.9x | 69% / 13.6x | 70% / 14.3x |
| 10.0x | 54% / 8.6x | 58% / 9.9x | 62% / 11.3x | 64% / 11.9x | 66% / 12.6x |
| 11.0x | 50% / 7.5x | 54% / 8.8x | 58% / 9.9x | 60% / 10.6x | 62% / 11.2x |
| 12.0x | 46% / 6.7x | 51% / 7.8x | 55% / 8.8x | 57% / 9.4x | 58% / 9.9x |
Covenant Headroom (at 10x Entry, 6.5x Max Leverage)
Pro forma EBITDA can decline 30% before the 6.5x covenant trips. RCM uplift reduces leverage from 8.5x to 4.5x, adding 3.9 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 | $1.6M | — | $1.6M | 6.0% |
| Year 1 | $1.7M | +$936K | $2.6M | 9.7% |
| Year 2 | $1.7M | +$1.4M | $3.1M | 11.7% |
| Year 3 | $1.8M | +$1.4M | $3.2M | 11.9% |
| Year 4 | $1.8M | +$1.4M | $3.2M | 12.1% |
| Year 5 | $1.9M | +$1.4M | $3.3M | 12.3% |
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 | $267K | $400K | $534K | $640K |
| Denial Rate Reductio | $264K | $396K | $528K | $634K |
| A/R Days Reduction | $162K | $243K | $325K | $390K |
| Clean Claim Rate | $9K | $13K | $17K | $20K |
| Total | $702K | $1.1M | $1.4M | $1.7M |
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 | 6.0% | -12.9% | 1.4% | 11.4% | P62 |
| Net-to-Gross | 76.1% | 17.5% | 30.0% | 45.8% | P96 |
| Occupancy | 54.9% | 37.6% | 57.1% | 75.3% | P46 |
| Rev/Bed | $361K | $296K | $545K | $1.1M | P32 |
| Exp/Bed | $339K | $309K | $492K | $1.1M | P27 |
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.