Bridge Realization Estimate
ML model predicts what fraction of the bridge is achievable (accuracy: 60%, n=5,839)
Expected realization: 64% of modeled bridge. Strengths: Bed Count. Risks: Revenue per Bed, Occupancy Rate. Risk-adjusted uplift: $0.2M (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 | $130K | $8K | $138K | $0 | 12mo |
| Cost to Collect | 4.5% DEFAULT | 2.5% BENCHMARK | $0 | $135K | $135K | $0 | 12mo |
| A/R Days Reduction | 52.00 DEFAULT | 38.00 BENCHMARK | $21K | $61K | $82K | $259K | 9mo |
| Clean Claim Rate | 88.0% DEFAULT | 96.0% BENCHMARK | $0 | $10K | $10K | $0 | 6mo |
| Net Collection Rate | 93.5% DEFAULT | 51.0% 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 | $35K | $69K | $104K | $138K | $138K | $138K | $138K |
| Cost to Collect | $0 | $34K | $67K | $101K | $135K | $135K | $135K | $135K |
| A/R Days Reduction | $0 | $27K | $55K | $82K | $82K | $82K | $82K | $82K |
| Clean Claim Rate | $0 | $5K | $10K | $10K | $10K | $10K | $10K | $10K |
| Cumulative | $0 | $100K | $201K | $297K | $365K | $365K | $365K | $365K |
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 $365K is added at exit.
| Entry \ Exit | 9.0x | 10.0x | 11.0x | 11.5x | 12.0x |
|---|---|---|---|---|---|
| 8.0x | 177% / 164.1x | 183% / 182.7x | 189% / 201.3x | 192% / 210.6x | 194% / 219.9x |
| 9.0x | 171% / 145.5x | 177% / 162.1x | 182% / 178.6x | 185% / 186.9x | 187% / 195.1x |
| 10.0x | 165% / 130.7x | 171% / 145.5x | 176% / 160.4x | 179% / 167.8x | 181% / 175.3x |
| 11.0x | 160% / 118.5x | 166% / 132.0x | 171% / 145.5x | 173% / 152.3x | 176% / 159.1x |
| 12.0x | 155% / 108.3x | 161% / 120.7x | 166% / 133.1x | 168% / 139.3x | 171% / 145.5x |
Covenant Headroom (at 10x Entry, 6.5x Max Leverage)
Pro forma EBITDA can decline 94% before the 6.5x covenant trips. RCM uplift reduces leverage from 8.5x to 0.4x, adding 8.1 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 | $17K | — | $17K | 0.2% |
| Year 1 | $17K | +$243K | $261K | 3.9% |
| Year 2 | $18K | +$365K | $383K | 5.7% |
| Year 3 | $18K | +$365K | $383K | 5.7% |
| Year 4 | $19K | +$365K | $384K | 5.7% |
| Year 5 | $19K | +$365K | $384K | 5.7% |
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 | $69K | $104K | $138K | $166K |
| Cost to Collect | $67K | $101K | $135K | $162K |
| A/R Days Reduction | $41K | $62K | $82K | $99K |
| Clean Claim Rate | $5K | $7K | $10K | $12K |
| Total | $182K | $274K | $365K | $438K |
Peer Context — Where This Hospital Sits
Key metrics vs 287 size-matched peers. Low percentile on margin/efficiency metrics = more room for improvement = larger bridge opportunity.
| Metric | Hospital | P25 | P50 | P75 | Percentile |
|---|---|---|---|---|---|
| Op Margin | 0.2% | -23.7% | -2.9% | 10.4% | P55 |
| Net-to-Gross | 48.3% | 24.4% | 34.4% | 51.0% | P70 |
| Occupancy | 45.4% | 19.3% | 44.2% | 69.4% | P52 |
| Rev/Bed | $169K | $371K | $584K | $1.2M | P6 |
| Exp/Bed | $168K | $402K | $631K | $1.3M | 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.