Bridge Realization Estimate
ML model predicts what fraction of the bridge is achievable (accuracy: 60%, n=5,839)
Expected realization: 73% of modeled bridge. Strengths: Occupancy Rate, Payer Diversity. Risks: Revenue per Bed, Commercial Payer %. Risk-adjusted uplift: $0.8M (vs $1.1M 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 | $432K | $432K | $0 | 12mo |
| Denial Rate Reduction | 12.0% DEFAULT | 6.5% BENCHMARK | $416K | $12K | $428K | $0 | 12mo |
| A/R Days Reduction | 52.00 DEFAULT | 38.00 BENCHMARK | $66K | $197K | $263K | $829K | 9mo |
| Clean Claim Rate | 88.0% DEFAULT | 96.0% BENCHMARK | $0 | $14K | $14K | $0 | 6mo |
| Net Collection Rate | 93.5% DEFAULT | 39.4% 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 | $108K | $216K | $324K | $432K | $432K | $432K | $432K |
| Denial Rate Reduction | $0 | $107K | $214K | $321K | $428K | $428K | $428K | $428K |
| A/R Days Reduction | $0 | $88K | $175K | $263K | $263K | $263K | $263K | $263K |
| Clean Claim Rate | $0 | $7K | $14K | $14K | $14K | $14K | $14K | $14K |
| Cumulative | $0 | $309K | $619K | $922K | $1.1M | $1.1M | $1.1M | $1.1M |
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 $1.1M is added at exit.
| Entry \ Exit | 9.0x | 10.0x | 11.0x | 11.5x | 12.0x |
|---|---|---|---|---|---|
| 8.0x | 96% / 29.1x | 101% / 32.7x | 105% / 36.3x | 107% / 38.1x | 109% / 39.9x |
| 9.0x | 91% / 25.5x | 96% / 28.7x | 100% / 31.9x | 102% / 33.5x | 104% / 35.1x |
| 10.0x | 87% / 22.6x | 91% / 25.5x | 95% / 28.4x | 97% / 29.8x | 99% / 31.3x |
| 11.0x | 83% / 20.3x | 87% / 22.9x | 91% / 25.5x | 93% / 26.8x | 95% / 28.1x |
| 12.0x | 79% / 18.3x | 83% / 20.7x | 87% / 23.1x | 89% / 24.3x | 91% / 25.5x |
Covenant Headroom (at 10x Entry, 6.5x Max Leverage)
Pro forma EBITDA can decline 69% before the 6.5x covenant trips. RCM uplift reduces leverage from 8.5x to 2.0x, adding 6.5 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 | $348K | — | $348K | 1.6% |
| Year 1 | $358K | +$758K | $1.1M | 5.2% |
| Year 2 | $369K | +$1.1M | $1.5M | 7.0% |
| Year 3 | $380K | +$1.1M | $1.5M | 7.0% |
| Year 4 | $391K | +$1.1M | $1.5M | 7.1% |
| Year 5 | $403K | +$1.1M | $1.5M | 7.1% |
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 | $216K | $324K | $432K | $518K |
| Denial Rate Reductio | $214K | $321K | $428K | $513K |
| A/R Days Reduction | $131K | $197K | $263K | $315K |
| Clean Claim Rate | $7K | $10K | $14K | $17K |
| Total | $568K | $852K | $1.1M | $1.4M |
Peer Context — Where This Hospital Sits
Key metrics vs 196 size-matched peers. Low percentile on margin/efficiency metrics = more room for improvement = larger bridge opportunity.
| Metric | Hospital | P25 | P50 | P75 | Percentile |
|---|---|---|---|---|---|
| Op Margin | 1.6% | -10.9% | 2.2% | 11.7% | P47 |
| Net-to-Gross | 30.6% | 16.6% | 27.4% | 39.4% | P58 |
| Occupancy | 86.4% | 44.1% | 58.5% | 75.3% | P90 |
| Rev/Bed | $240K | $284K | $562K | $1.2M | P20 |
| Exp/Bed | $236K | $296K | $501K | $1.2M | P18 |
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.