Bridge Realization Estimate
ML model predicts what fraction of the bridge is achievable (accuracy: 60%, n=5,839)
Expected realization: 74% of modeled bridge. Strengths: Occupancy Rate, Payer Diversity. Risks: Commercial Payer %, Revenue per Bed. Risk-adjusted uplift: $1.3M (vs $1.7M 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 | $652K | $652K | $0 | 12mo |
| Denial Rate Reduction | 12.0% DEFAULT | 6.5% BENCHMARK | $628K | $18K | $646K | $0 | 12mo |
| A/R Days Reduction | 52.00 DEFAULT | 38.00 BENCHMARK | $100K | $297K | $397K | $1.3M | 9mo |
| Clean Claim Rate | 88.0% DEFAULT | 96.0% BENCHMARK | $0 | $21K | $21K | $0 | 6mo |
| Net Collection Rate | 93.5% DEFAULT | 46.9% 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 | $163K | $326K | $489K | $652K | $652K | $652K | $652K |
| Denial Rate Reduction | $0 | $161K | $323K | $484K | $646K | $646K | $646K | $646K |
| A/R Days Reduction | $0 | $132K | $264K | $397K | $397K | $397K | $397K | $397K |
| Clean Claim Rate | $0 | $10K | $21K | $21K | $21K | $21K | $21K | $21K |
| Cumulative | $0 | $467K | $934K | $1.4M | $1.7M | $1.7M | $1.7M | $1.7M |
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 $1.7M is added at exit.
| Entry \ Exit | 9.0x | 10.0x | 11.0x | 11.5x | 12.0x |
|---|---|---|---|---|---|
| 8.0x | 79% / 18.2x | 83% / 20.6x | 87% / 23.0x | 89% / 24.2x | 91% / 25.4x |
| 9.0x | 74% / 15.8x | 78% / 17.9x | 82% / 20.1x | 84% / 21.1x | 86% / 22.2x |
| 10.0x | 69% / 13.9x | 74% / 15.8x | 78% / 17.7x | 80% / 18.7x | 81% / 19.6x |
| 11.0x | 65% / 12.4x | 70% / 14.1x | 74% / 15.8x | 76% / 16.7x | 77% / 17.6x |
| 12.0x | 62% / 11.1x | 66% / 12.7x | 70% / 14.2x | 72% / 15.0x | 74% / 15.8x |
Covenant Headroom (at 10x Entry, 6.5x Max Leverage)
Pro forma EBITDA can decline 53% before the 6.5x covenant trips. RCM uplift reduces leverage from 8.5x to 3.0x, adding 5.4 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 | $966K | — | $966K | 3.0% |
| Year 1 | $995K | +$1.1M | $2.1M | 6.6% |
| Year 2 | $1.0M | +$1.7M | $2.7M | 8.4% |
| Year 3 | $1.1M | +$1.7M | $2.8M | 8.5% |
| Year 4 | $1.1M | +$1.7M | $2.8M | 8.6% |
| Year 5 | $1.1M | +$1.7M | $2.8M | 8.7% |
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% |
|---|---|---|---|---|
| Cost to Collect | $326K | $489K | $652K | $783K |
| Denial Rate Reductio | $323K | $484K | $646K | $775K |
| A/R Days Reduction | $198K | $298K | $397K | $476K |
| Clean Claim Rate | $10K | $16K | $21K | $25K |
| Total | $858K | $1.3M | $1.7M | $2.1M |
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 | 3.0% | -11.9% | 1.6% | 11.9% | P55 |
| Net-to-Gross | 29.0% | 17.5% | 30.3% | 46.9% | P47 |
| Occupancy | 87.9% | 39.8% | 57.3% | 75.0% | P93 |
| Rev/Bed | $418K | $296K | $554K | $1.1M | P36 |
| Exp/Bed | $406K | $309K | $495K | $1.1M | P35 |
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.