Bridge Realization Estimate
ML model predicts what fraction of the bridge is achievable (accuracy: 60%, n=5,839)
Expected realization: 69% of modeled bridge. Strengths: Commercial Payer %, Bed Count. Risks: Revenue per Bed. Risk-adjusted uplift: $0.9M (vs $1.3M 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 | $487K | $487K | $0 | 12mo |
| Denial Rate Reduction | 12.0% DEFAULT | 6.5% BENCHMARK | $469K | $13K | $483K | $0 | 12mo |
| A/R Days Reduction | 52.00 DEFAULT | 38.00 BENCHMARK | $75K | $222K | $297K | $935K | 9mo |
| Clean Claim Rate | 88.0% DEFAULT | 96.0% BENCHMARK | $0 | $16K | $16K | $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 | $122K | $244K | $366K | $487K | $487K | $487K | $487K |
| Denial Rate Reduction | $0 | $121K | $241K | $362K | $483K | $483K | $483K | $483K |
| A/R Days Reduction | $0 | $99K | $198K | $297K | $297K | $297K | $297K | $297K |
| Clean Claim Rate | $0 | $8K | $16K | $16K | $16K | $16K | $16K | $16K |
| Cumulative | $0 | $349K | $698K | $1.0M | $1.3M | $1.3M | $1.3M | $1.3M |
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 $1.3M is added at exit.
| Entry \ Exit | 9.0x | 10.0x | 11.0x | 11.5x | 12.0x |
|---|---|---|---|---|---|
| 8.0x | 71% / 14.8x | 76% / 16.8x | 80% / 18.8x | 82% / 19.8x | 84% / 20.8x |
| 9.0x | 67% / 12.8x | 71% / 14.6x | 75% / 16.4x | 77% / 17.3x | 79% / 18.2x |
| 10.0x | 62% / 11.2x | 67% / 12.8x | 71% / 14.4x | 72% / 15.2x | 74% / 16.0x |
| 11.0x | 58% / 9.9x | 63% / 11.3x | 67% / 12.8x | 68% / 13.5x | 70% / 14.3x |
| 12.0x | 54% / 8.8x | 59% / 10.1x | 63% / 11.5x | 65% / 12.1x | 67% / 12.8x |
Covenant Headroom (at 10x Entry, 6.5x Max Leverage)
Pro forma EBITDA can decline 44% before the 6.5x covenant trips. RCM uplift reduces leverage from 8.5x to 3.7x, adding 4.8 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 | $978K | — | $978K | 4.0% |
| Year 1 | $1.0M | +$855K | $1.9M | 7.6% |
| Year 2 | $1.0M | +$1.3M | $2.3M | 9.5% |
| Year 3 | $1.1M | +$1.3M | $2.4M | 9.6% |
| Year 4 | $1.1M | +$1.3M | $2.4M | 9.8% |
| Year 5 | $1.1M | +$1.3M | $2.4M | 9.9% |
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 | $244K | $366K | $487K | $585K |
| Denial Rate Reductio | $241K | $362K | $483K | $579K |
| A/R Days Reduction | $148K | $222K | $297K | $356K |
| Clean Claim Rate | $8K | $12K | $16K | $19K |
| Total | $641K | $962K | $1.3M | $1.5M |
Peer Context — Where This Hospital Sits
Key metrics vs 276 size-matched peers. Low percentile on margin/efficiency metrics = more room for improvement = larger bridge opportunity.
| Metric | Hospital | P25 | P50 | P75 | Percentile |
|---|---|---|---|---|---|
| Op Margin | 4.0% | -21.0% | -3.2% | 10.7% | P64 |
| Net-to-Gross | 27.7% | 23.0% | 32.9% | 51.0% | P38 |
| Occupancy | 54.6% | 23.5% | 50.8% | 71.3% | P54 |
| Rev/Bed | $487K | $335K | $562K | $1.1M | P42 |
| Exp/Bed | $468K | $371K | $537K | $1.2M | P41 |
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.