Bridge Realization Estimate
ML model predicts what fraction of the bridge is achievable (accuracy: 60%, n=5,839)
Expected realization: 66% of modeled bridge. Strengths: Revenue per Bed, Bed Count. Risks: Occupancy Rate, Commercial Payer %. Risk-adjusted uplift: $3.3M (vs $5.1M 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 | $1.9M | $1.9M | $0 | 12mo |
| Denial Rate Reduction | 12.0% DEFAULT | 6.5% BENCHMARK | $1.8M | $53K | $1.9M | $0 | 12mo |
| A/R Days Reduction | 52.00 DEFAULT | 38.00 BENCHMARK | $295K | $874K | $1.2M | $3.7M | 9mo |
| Clean Claim Rate | 88.0% DEFAULT | 96.0% BENCHMARK | $0 | $61K | $61K | $0 | 6mo |
| Net Collection Rate | 93.5% DEFAULT | 64.8% 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 |
|---|---|---|---|---|---|---|---|---|
| Cost to Collect | $0 | $480K | $961K | $1.4M | $1.9M | $1.9M | $1.9M | $1.9M |
| Denial Rate Reduction | $0 | $476K | $951K | $1.4M | $1.9M | $1.9M | $1.9M | $1.9M |
| A/R Days Reduction | $0 | $390K | $779K | $1.2M | $1.2M | $1.2M | $1.2M | $1.2M |
| Clean Claim Rate | $0 | $31K | $61K | $61K | $61K | $61K | $61K | $61K |
| Cumulative | $0 | $1.4M | $2.8M | $4.1M | $5.1M | $5.1M | $5.1M | $5.1M |
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 $5.1M is added at exit.
| Entry \ Exit | 9.0x | 10.0x | 11.0x | 11.5x | 12.0x |
|---|---|---|---|---|---|
| 8.0x | 44% / 6.2x | 49% / 7.3x | 53% / 8.3x | 55% / 8.9x | 56% / 9.4x |
| 9.0x | 39% / 5.2x | 44% / 6.1x | 48% / 7.0x | 50% / 7.5x | 52% / 8.0x |
| 10.0x | 34% / 4.3x | 39% / 5.2x | 43% / 6.0x | 45% / 6.4x | 47% / 6.9x |
| 11.0x | 30% / 3.6x | 35% / 4.4x | 39% / 5.2x | 41% / 5.6x | 43% / 5.9x |
| 12.0x | 25% / 3.1x | 30% / 3.8x | 35% / 4.5x | 37% / 4.8x | 39% / 5.2x |
Covenant Headroom (at 10x Entry, 6.5x Max Leverage)
Pro forma EBITDA can decline -15% before the 6.5x covenant trips. RCM uplift reduces leverage from 8.5x to 7.4x, adding 1.0 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 | $37.0M | — | $37.0M | 38.5% |
| Year 1 | $38.1M | +$3.4M | $41.4M | 43.1% |
| Year 2 | $39.2M | +$5.1M | $44.3M | 46.1% |
| Year 3 | $40.4M | +$5.1M | $45.4M | 47.3% |
| Year 4 | $41.6M | +$5.1M | $46.6M | 48.6% |
| Year 5 | $42.8M | +$5.1M | $47.9M | 49.9% |
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 | $961K | $1.4M | $1.9M | $2.3M |
| Denial Rate Reductio | $951K | $1.4M | $1.9M | $2.3M |
| A/R Days Reduction | $584K | $877K | $1.2M | $1.4M |
| Clean Claim Rate | $31K | $46K | $61K | $74K |
| Total | $2.5M | $3.8M | $5.1M | $6.1M |
Peer Context — Where This Hospital Sits
Key metrics vs 28 size-matched peers. Low percentile on margin/efficiency metrics = more room for improvement = larger bridge opportunity.
| Metric | Hospital | P25 | P50 | P75 | Percentile |
|---|---|---|---|---|---|
| Op Margin | 38.5% | -12.6% | 4.6% | 13.9% | P96 |
| Net-to-Gross | 39.4% | 39.0% | 45.7% | 64.8% | P25 |
| Occupancy | 36.6% | 24.3% | 30.1% | 51.5% | P57 |
| Rev/Bed | $2.7M | $531K | $1.5M | $2.5M | P75 |
| Exp/Bed | $1.6M | $620K | $1.4M | $2.1M | P57 |
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.