Bridge Realization Estimate
ML model predicts what fraction of the bridge is achievable (accuracy: 60%, n=5,839)
Expected realization: 67% of modeled bridge. Strengths: Bed Count. Risks: Revenue per Bed. Risk-adjusted uplift: $0.2M (vs $0.2M 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 |
|---|---|---|---|---|---|---|---|
| Denial Rate Reduction | 12.0% DEFAULT | 6.5% BENCHMARK | $78K | $8K | $86K | $0 | 12mo |
| Cost to Collect | 4.5% DEFAULT | 2.5% BENCHMARK | $0 | $81K | $81K | $0 | 12mo |
| A/R Days Reduction | 52.00 DEFAULT | 38.00 BENCHMARK | $12K | $37K | $49K | $155K | 9mo |
| Clean Claim Rate | 88.0% DEFAULT | 96.0% BENCHMARK | $0 | $10K | $10K | $0 | 6mo |
| Net Collection Rate | 93.5% DEFAULT | 54.2% 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 |
|---|---|---|---|---|---|---|---|---|
| Denial Rate Reduction | $0 | $22K | $43K | $65K | $86K | $86K | $86K | $86K |
| Cost to Collect | $0 | $20K | $41K | $61K | $81K | $81K | $81K | $81K |
| A/R Days Reduction | $0 | $16K | $33K | $49K | $49K | $49K | $49K | $49K |
| Clean Claim Rate | $0 | $5K | $10K | $10K | $10K | $10K | $10K | $10K |
| Cumulative | $0 | $63K | $126K | $184K | $226K | $226K | $226K | $226K |
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 $226K is added at exit.
| Entry \ Exit | 9.0x | 10.0x | 11.0x | 11.5x | 12.0x |
|---|---|---|---|---|---|
| 8.0x | 119% / 50.0x | 124% / 55.9x | 128% / 61.8x | 130% / 64.8x | 132% / 67.8x |
| 9.0x | 113% / 44.1x | 118% / 49.4x | 123% / 54.6x | 125% / 57.2x | 127% / 59.9x |
| 10.0x | 108% / 39.4x | 113% / 44.1x | 118% / 48.8x | 120% / 51.2x | 122% / 53.5x |
| 11.0x | 104% / 35.5x | 109% / 39.8x | 113% / 44.1x | 115% / 46.2x | 117% / 48.4x |
| 12.0x | 100% / 32.2x | 105% / 36.2x | 109% / 40.1x | 111% / 42.1x | 113% / 44.1x |
Covenant Headroom (at 10x Entry, 6.5x Max Leverage)
Pro forma EBITDA can decline 82% before the 6.5x covenant trips. RCM uplift reduces leverage from 8.5x to 1.2x, adding 7.3 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 | $37K | — | $37K | 0.9% |
| Year 1 | $38K | +$151K | $189K | 4.7% |
| Year 2 | $39K | +$226K | $265K | 6.5% |
| Year 3 | $40K | +$226K | $267K | 6.6% |
| Year 4 | $42K | +$226K | $268K | 6.6% |
| Year 5 | $43K | +$226K | $269K | 6.6% |
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% |
|---|---|---|---|---|
| Denial Rate Reductio | $43K | $65K | $86K | $104K |
| Cost to Collect | $41K | $61K | $81K | $97K |
| A/R Days Reduction | $25K | $37K | $49K | $59K |
| Clean Claim Rate | $5K | $7K | $10K | $12K |
| Total | $113K | $170K | $226K | $272K |
Peer Context — Where This Hospital Sits
Key metrics vs 221 size-matched peers. Low percentile on margin/efficiency metrics = more room for improvement = larger bridge opportunity.
| Metric | Hospital | P25 | P50 | P75 | Percentile |
|---|---|---|---|---|---|
| Op Margin | 0.9% | -41.9% | -12.0% | 8.9% | P64 |
| Net-to-Gross | 53.9% | 25.6% | 37.9% | 54.2% | P73 |
| Occupancy | 52.2% | 12.5% | 25.4% | 52.2% | P75 |
| Rev/Bed | $203K | $439K | $670K | $1.3M | P5 |
| Exp/Bed | $201K | $500K | $913K | $1.4M | P3 |
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.