Bridge Realization Estimate
ML model predicts what fraction of the bridge is achievable (accuracy: 60%, n=5,839)
Expected realization: 63% of modeled bridge. Strengths: Bed Count. Risks: Net-to-Gross Ratio, Revenue per Bed. Risk-adjusted uplift: $0.3M (vs $0.4M 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 |
|---|---|---|---|---|---|---|---|
| Denial Rate Reduction | 12.0% DEFAULT | 6.5% BENCHMARK | $153K | $8K | $161K | $0 | 12mo |
| Cost to Collect | 4.5% DEFAULT | 2.5% BENCHMARK | $0 | $159K | $159K | $0 | 12mo |
| A/R Days Reduction | 52.00 DEFAULT | 38.00 BENCHMARK | $24K | $72K | $97K | $305K | 9mo |
| Clean Claim Rate | 88.0% DEFAULT | 96.0% BENCHMARK | $0 | $10K | $10K | $0 | 6mo |
| Net Collection Rate | 93.5% DEFAULT | 53.8% 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 | $40K | $81K | $121K | $161K | $161K | $161K | $161K |
| Cost to Collect | $0 | $40K | $80K | $119K | $159K | $159K | $159K | $159K |
| A/R Days Reduction | $0 | $32K | $65K | $97K | $97K | $97K | $97K | $97K |
| Clean Claim Rate | $0 | $5K | $10K | $10K | $10K | $10K | $10K | $10K |
| Cumulative | $0 | $117K | $234K | $347K | $427K | $427K | $427K | $427K |
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 $427K is added at exit.
| Entry \ Exit | 9.0x | 10.0x | 11.0x | 11.5x | 12.0x |
|---|---|---|---|---|---|
| 8.0x | 74% / 15.8x | 78% / 18.0x | 82% / 20.1x | 84% / 21.1x | 86% / 22.2x |
| 9.0x | 69% / 13.7x | 73% / 15.6x | 77% / 17.5x | 79% / 18.4x | 81% / 19.4x |
| 10.0x | 64% / 12.0x | 69% / 13.7x | 73% / 15.4x | 75% / 16.3x | 76% / 17.1x |
| 11.0x | 60% / 10.6x | 65% / 12.2x | 69% / 13.7x | 71% / 14.5x | 72% / 15.3x |
| 12.0x | 57% / 9.5x | 61% / 10.9x | 65% / 12.3x | 67% / 13.0x | 69% / 13.7x |
Covenant Headroom (at 10x Entry, 6.5x Max Leverage)
Pro forma EBITDA can decline 47% before the 6.5x covenant trips. RCM uplift reduces leverage from 8.5x to 3.5x, adding 5.0 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 | $294K | — | $294K | 3.7% |
| Year 1 | $303K | +$285K | $588K | 7.4% |
| Year 2 | $312K | +$427K | $739K | 9.3% |
| Year 3 | $322K | +$427K | $749K | 9.4% |
| Year 4 | $331K | +$427K | $758K | 9.5% |
| Year 5 | $341K | +$427K | $768K | 9.7% |
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 | $81K | $121K | $161K | $194K |
| Cost to Collect | $80K | $119K | $159K | $191K |
| A/R Days Reduction | $48K | $73K | $97K | $116K |
| Clean Claim Rate | $5K | $7K | $10K | $12K |
| Total | $214K | $320K | $427K | $512K |
Peer Context — Where This Hospital Sits
Key metrics vs 247 size-matched peers. Low percentile on margin/efficiency metrics = more room for improvement = larger bridge opportunity.
| Metric | Hospital | P25 | P50 | P75 | Percentile |
|---|---|---|---|---|---|
| Op Margin | 3.7% | -37.7% | -8.4% | 9.0% | P66 |
| Net-to-Gross | 100.0% | 25.1% | 36.5% | 53.8% | P96 |
| Occupancy | 43.9% | 13.1% | 29.3% | 55.0% | P65 |
| Rev/Bed | $332K | $432K | $659K | $1.3M | P14 |
| Exp/Bed | $319K | $459K | $877K | $1.4M | P11 |
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.