Bridge Realization Estimate
ML model predicts what fraction of the bridge is achievable (accuracy: 60%, n=5,839)
Expected realization: 76% of modeled bridge. Strengths: Occupancy Rate, Bed Count. Risks: Revenue per Bed. Risk-adjusted uplift: $0.6M (vs $0.8M 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 | $305K | $305K | $0 | 12mo |
| Denial Rate Reduction | 12.0% DEFAULT | 6.5% BENCHMARK | $293K | $8K | $302K | $0 | 12mo |
| A/R Days Reduction | 52.00 DEFAULT | 38.00 BENCHMARK | $47K | $139K | $185K | $585K | 9mo |
| Clean Claim Rate | 88.0% DEFAULT | 96.0% BENCHMARK | $0 | $10K | $10K | $0 | 6mo |
| Net Collection Rate | 93.5% DEFAULT | 46.8% 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 | $76K | $152K | $229K | $305K | $305K | $305K | $305K |
| Denial Rate Reduction | $0 | $75K | $151K | $226K | $302K | $302K | $302K | $302K |
| A/R Days Reduction | $0 | $62K | $124K | $185K | $185K | $185K | $185K | $185K |
| Clean Claim Rate | $0 | $5K | $10K | $10K | $10K | $10K | $10K | $10K |
| Cumulative | $0 | $218K | $437K | $650K | $802K | $802K | $802K | $802K |
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 $802K is added at exit.
| Entry \ Exit | 9.0x | 10.0x | 11.0x | 11.5x | 12.0x |
|---|---|---|---|---|---|
| 8.0x | -100% / 0.0x | -100% / 0.0x | -100% / 0.0x | -100% / 0.0x | -100% / 0.0x |
| 9.0x | -100% / 0.0x | -100% / 0.0x | -100% / 0.0x | -100% / 0.0x | -100% / 0.0x |
| 10.0x | -100% / 0.0x | -100% / 0.0x | -100% / 0.0x | -100% / 0.0x | -100% / 0.0x |
| 11.0x | -100% / 0.0x | -100% / 0.0x | -100% / 0.0x | -100% / 0.0x | -100% / 0.0x |
| 12.0x | -100% / 0.0x | -100% / 0.0x | -100% / 0.0x | -100% / 0.0x | -100% / 0.0x |
Covenant Headroom (at 10x Entry, 6.5x Max Leverage)
Pro forma EBITDA can decline 175% before the 6.5x covenant trips. RCM uplift reduces leverage from 99.0x to -4.8x, adding 103.8 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 | $-292K | — | $-292K | -1.9% |
| Year 1 | $-301K | +$535K | $234K | 1.5% |
| Year 2 | $-310K | +$802K | $492K | 3.2% |
| Year 3 | $-319K | +$802K | $483K | 3.2% |
| Year 4 | $-329K | +$802K | $473K | 3.1% |
| Year 5 | $-338K | +$802K | $463K | 3.0% |
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 | $152K | $229K | $305K | $366K |
| Denial Rate Reductio | $151K | $226K | $302K | $362K |
| A/R Days Reduction | $93K | $139K | $185K | $223K |
| Clean Claim Rate | $5K | $7K | $10K | $12K |
| Total | $401K | $601K | $802K | $962K |
Peer Context — Where This Hospital Sits
Key metrics vs 27 size-matched peers. Low percentile on margin/efficiency metrics = more room for improvement = larger bridge opportunity.
| Metric | Hospital | P25 | P50 | P75 | Percentile |
|---|---|---|---|---|---|
| Op Margin | -1.9% | -10.8% | -0.7% | 12.0% | P41 |
| Net-to-Gross | 20.7% | 26.3% | 31.6% | 46.8% | P7 |
| Occupancy | 90.6% | 39.7% | 49.7% | 71.4% | P96 |
| Rev/Bed | $610K | $528K | $1.2M | $2.0M | P33 |
| Exp/Bed | $621K | $464K | $1.4M | $1.9M | P37 |
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.