Bridge Realization Estimate
ML model predicts what fraction of the bridge is achievable (accuracy: 60%, n=5,839)
Expected realization: 68% of modeled bridge. Strengths: Occupancy Rate, Commercial Payer %. Risks: Revenue per Bed, Net-to-Gross Ratio. Risk-adjusted uplift: $0.9M (vs $1.3M 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 | $498K | $498K | $0 | 12mo |
| Denial Rate Reduction | 12.0% DEFAULT | 6.5% BENCHMARK | $480K | $14K | $493K | $0 | 12mo |
| A/R Days Reduction | 52.00 DEFAULT | 38.00 BENCHMARK | $76K | $227K | $303K | $956K | 9mo |
| Clean Claim Rate | 88.0% DEFAULT | 96.0% BENCHMARK | $0 | $16K | $16K | $0 | 6mo |
| Net Collection Rate | 93.5% DEFAULT | 32.3% 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 | $125K | $249K | $374K | $498K | $498K | $498K | $498K |
| Denial Rate Reduction | $0 | $123K | $247K | $370K | $493K | $493K | $493K | $493K |
| A/R Days Reduction | $0 | $101K | $202K | $303K | $303K | $303K | $303K | $303K |
| Clean Claim Rate | $0 | $8K | $16K | $16K | $16K | $16K | $16K | $16K |
| Cumulative | $0 | $357K | $714K | $1.1M | $1.3M | $1.3M | $1.3M | $1.3M |
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 $1.3M is added at exit.
| Entry \ Exit | 9.0x | 10.0x | 11.0x | 11.5x | 12.0x |
|---|---|---|---|---|---|
| 8.0x | 49% / 7.3x | 53% / 8.5x | 57% / 9.7x | 59% / 10.2x | 61% / 10.8x |
| 9.0x | 44% / 6.1x | 48% / 7.2x | 52% / 8.2x | 54% / 8.7x | 56% / 9.3x |
| 10.0x | 39% / 5.2x | 44% / 6.1x | 48% / 7.1x | 50% / 7.5x | 52% / 8.0x |
| 11.0x | 35% / 4.4x | 39% / 5.3x | 44% / 6.1x | 46% / 6.6x | 48% / 7.0x |
| 12.0x | 31% / 3.8x | 36% / 4.6x | 40% / 5.3x | 42% / 5.7x | 44% / 6.1x |
Covenant Headroom (at 10x Entry, 6.5x Max Leverage)
Pro forma EBITDA can decline -1% before the 6.5x covenant trips. RCM uplift reduces leverage from 8.5x to 6.6x, adding 1.9 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 | $4.6M | — | $4.6M | 18.5% |
| Year 1 | $4.8M | +$874K | $5.6M | 22.6% |
| Year 2 | $4.9M | +$1.3M | $6.2M | 24.9% |
| Year 3 | $5.0M | +$1.3M | $6.4M | 25.5% |
| Year 4 | $5.2M | +$1.3M | $6.5M | 26.1% |
| Year 5 | $5.4M | +$1.3M | $6.7M | 26.7% |
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% |
|---|---|---|---|---|
| Cost to Collect | $249K | $374K | $498K | $598K |
| Denial Rate Reductio | $247K | $370K | $493K | $592K |
| A/R Days Reduction | $152K | $227K | $303K | $364K |
| Clean Claim Rate | $8K | $12K | $16K | $19K |
| Total | $655K | $983K | $1.3M | $1.6M |
Peer Context — Where This Hospital Sits
Key metrics vs 56 size-matched peers. Low percentile on margin/efficiency metrics = more room for improvement = larger bridge opportunity.
| Metric | Hospital | P25 | P50 | P75 | Percentile |
|---|---|---|---|---|---|
| Op Margin | 18.5% | -9.0% | 5.9% | 15.1% | P86 |
| Net-to-Gross | 77.6% | 21.2% | 26.6% | 32.3% | P95 |
| Occupancy | 61.2% | 40.2% | 58.0% | 78.3% | P50 |
| Rev/Bed | $389K | $400K | $714K | $1.7M | P21 |
| Exp/Bed | $317K | $444K | $820K | $1.6M | P12 |
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.