Bridge Realization Estimate
ML model predicts what fraction of the bridge is achievable (accuracy: 60%, n=5,839)
Expected realization: 70% of modeled bridge. Strengths: Occupancy Rate, Payer Diversity. Risks: Revenue per Bed, Commercial Payer %. Risk-adjusted uplift: $1.0M (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 | 34.2% 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 | $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 | 55% / 9.0x | 60% / 10.4x | 64% / 11.7x | 65% / 12.4x | 67% / 13.1x |
| 9.0x | 50% / 7.6x | 55% / 8.8x | 59% / 10.1x | 61% / 10.7x | 62% / 11.3x |
| 10.0x | 46% / 6.5x | 50% / 7.6x | 54% / 8.7x | 56% / 9.3x | 58% / 9.8x |
| 11.0x | 41% / 5.7x | 46% / 6.7x | 50% / 7.6x | 52% / 8.1x | 54% / 8.6x |
| 12.0x | 38% / 4.9x | 42% / 5.8x | 46% / 6.7x | 48% / 7.2x | 50% / 7.6x |
Covenant Headroom (at 10x Entry, 6.5x Max Leverage)
Pro forma EBITDA can decline 14% before the 6.5x covenant trips. RCM uplift reduces leverage from 8.5x to 5.6x, adding 2.9 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 | $2.7M | — | $2.7M | 10.2% |
| Year 1 | $2.8M | +$936K | $3.7M | 14.0% |
| Year 2 | $2.9M | +$1.4M | $4.3M | 16.1% |
| Year 3 | $3.0M | +$1.4M | $4.4M | 16.4% |
| Year 4 | $3.1M | +$1.4M | $4.5M | 16.8% |
| Year 5 | $3.2M | +$1.4M | $4.6M | 17.1% |
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 173 size-matched peers. Low percentile on margin/efficiency metrics = more room for improvement = larger bridge opportunity.
| Metric | Hospital | P25 | P50 | P75 | Percentile |
|---|---|---|---|---|---|
| Op Margin | 10.2% | -8.8% | 2.3% | 13.0% | P69 |
| Net-to-Gross | 34.2% | 15.2% | 23.6% | 34.2% | P75 |
| Occupancy | 73.7% | 46.7% | 62.4% | 75.4% | P71 |
| Rev/Bed | $208K | $321K | $876K | $1.4M | P12 |
| Exp/Bed | $187K | $339K | $778K | $1.3M | P8 |
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.