Bridge Realization Estimate
ML model predicts what fraction of the bridge is achievable (accuracy: 60%, n=5,839)
Expected realization: 75% of modeled bridge. Strengths: Occupancy Rate, Revenue per Bed. Risks: Commercial Payer %. Risk-adjusted uplift: $2.6M (vs $3.4M 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 |
|---|---|---|---|---|---|---|---|
| Cost to Collect | 4.5% DEFAULT | 2.5% BENCHMARK | $0 | $1.3M | $1.3M | $0 | 12mo |
| Denial Rate Reduction | 12.0% DEFAULT | 6.5% BENCHMARK | $1.3M | $36K | $1.3M | $0 | 12mo |
| A/R Days Reduction | 52.00 DEFAULT | 38.00 BENCHMARK | $200K | $594K | $795K | $2.5M | 9mo |
| Clean Claim Rate | 88.0% DEFAULT | 96.0% BENCHMARK | $0 | $42K | $42K | $0 | 6mo |
| Net Collection Rate | 93.5% DEFAULT | 69.9% 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 | $327K | $653K | $980K | $1.3M | $1.3M | $1.3M | $1.3M |
| Denial Rate Reduction | $0 | $323K | $647K | $970K | $1.3M | $1.3M | $1.3M | $1.3M |
| A/R Days Reduction | $0 | $265K | $530K | $795K | $795K | $795K | $795K | $795K |
| Clean Claim Rate | $0 | $21K | $42K | $42K | $42K | $42K | $42K | $42K |
| Cumulative | $0 | $936K | $1.9M | $2.8M | $3.4M | $3.4M | $3.4M | $3.4M |
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 $3.4M is added at exit.
| Entry \ Exit | 9.0x | 10.0x | 11.0x | 11.5x | 12.0x |
|---|---|---|---|---|---|
| 8.0x | 146% / 89.7x | 151% / 100.1x | 156% / 110.4x | 159% / 115.6x | 161% / 120.7x |
| 9.0x | 140% / 79.4x | 145% / 88.6x | 150% / 97.8x | 152% / 102.4x | 155% / 107.0x |
| 10.0x | 135% / 71.1x | 140% / 79.4x | 145% / 87.7x | 147% / 91.8x | 149% / 95.9x |
| 11.0x | 130% / 64.4x | 135% / 71.9x | 140% / 79.4x | 142% / 83.2x | 144% / 86.9x |
| 12.0x | 126% / 58.7x | 131% / 65.6x | 136% / 72.5x | 138% / 76.0x | 140% / 79.4x |
Covenant Headroom (at 10x Entry, 6.5x Max Leverage)
Pro forma EBITDA can decline 90% before the 6.5x covenant trips. RCM uplift reduces leverage from 8.5x to 0.7x, adding 7.8 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 | $297K | — | $297K | 0.5% |
| Year 1 | $306K | +$2.3M | $2.6M | 4.0% |
| Year 2 | $316K | +$3.4M | $3.8M | 5.7% |
| Year 3 | $325K | +$3.4M | $3.8M | 5.8% |
| Year 4 | $335K | +$3.4M | $3.8M | 5.8% |
| Year 5 | $345K | +$3.4M | $3.8M | 5.8% |
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 | $653K | $980K | $1.3M | $1.6M |
| Denial Rate Reductio | $647K | $970K | $1.3M | $1.6M |
| A/R Days Reduction | $397K | $596K | $795K | $954K |
| Clean Claim Rate | $21K | $31K | $42K | $50K |
| Total | $1.7M | $2.6M | $3.4M | $4.1M |
Peer Context — Where This Hospital Sits
Key metrics vs 19 size-matched peers. Low percentile on margin/efficiency metrics = more room for improvement = larger bridge opportunity.
| Metric | Hospital | P25 | P50 | P75 | Percentile |
|---|---|---|---|---|---|
| Op Margin | 0.5% | -10.3% | -1.4% | 5.1% | P53 |
| Net-to-Gross | 37.0% | 46.6% | 57.7% | 69.9% | P11 |
| Occupancy | 69.7% | 19.4% | 27.5% | 37.6% | P84 |
| Rev/Bed | $4.1M | $689K | $1.4M | $2.4M | P89 |
| Exp/Bed | $4.1M | $851K | $1.4M | $2.2M | P89 |
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.