Bridge Realization Estimate
ML model predicts what fraction of the bridge is achievable (accuracy: 60%, n=5,839)
Expected realization: 60% of modeled bridge. Strengths: Bed Count. Risks: Occupancy Rate, Net-to-Gross Ratio. Risk-adjusted uplift: $0.8M (vs $1.4M 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 | $520K | $520K | $0 | 12mo |
| Denial Rate Reduction | 12.0% DEFAULT | 6.5% BENCHMARK | $501K | $14K | $515K | $0 | 12mo |
| A/R Days Reduction | 52.00 DEFAULT | 38.00 BENCHMARK | $80K | $237K | $317K | $998K | 9mo |
| Clean Claim Rate | 88.0% DEFAULT | 96.0% BENCHMARK | $0 | $17K | $17K | $0 | 6mo |
| Net Collection Rate | 93.5% DEFAULT | 53.7% 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 | $130K | $260K | $390K | $520K | $520K | $520K | $520K |
| Denial Rate Reduction | $0 | $129K | $258K | $386K | $515K | $515K | $515K | $515K |
| A/R Days Reduction | $0 | $106K | $211K | $317K | $317K | $317K | $317K | $317K |
| Clean Claim Rate | $0 | $8K | $17K | $17K | $17K | $17K | $17K | $17K |
| Cumulative | $0 | $373K | $745K | $1.1M | $1.4M | $1.4M | $1.4M | $1.4M |
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 $1.4M is added at exit.
| Entry \ Exit | 9.0x | 10.0x | 11.0x | 11.5x | 12.0x |
|---|---|---|---|---|---|
| 8.0x | 102% / 33.9x | 107% / 38.0x | 111% / 42.1x | 113% / 44.2x | 115% / 46.3x |
| 9.0x | 97% / 29.8x | 102% / 33.4x | 106% / 37.1x | 108% / 38.9x | 110% / 40.8x |
| 10.0x | 93% / 26.5x | 97% / 29.8x | 101% / 33.1x | 103% / 34.7x | 105% / 36.4x |
| 11.0x | 88% / 23.8x | 93% / 26.8x | 97% / 29.8x | 99% / 31.3x | 101% / 32.8x |
| 12.0x | 85% / 21.5x | 89% / 24.3x | 93% / 27.0x | 95% / 28.4x | 97% / 29.8x |
Covenant Headroom (at 10x Entry, 6.5x Max Leverage)
Pro forma EBITDA can decline 74% before the 6.5x covenant trips. RCM uplift reduces leverage from 8.5x to 1.7x, adding 6.7 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 | $349K | — | $349K | 1.3% |
| Year 1 | $360K | +$913K | $1.3M | 4.9% |
| Year 2 | $370K | +$1.4M | $1.7M | 6.7% |
| Year 3 | $381K | +$1.4M | $1.8M | 6.7% |
| Year 4 | $393K | +$1.4M | $1.8M | 6.8% |
| Year 5 | $405K | +$1.4M | $1.8M | 6.8% |
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 | $260K | $390K | $520K | $624K |
| Denial Rate Reductio | $258K | $386K | $515K | $618K |
| A/R Days Reduction | $158K | $237K | $317K | $380K |
| Clean Claim Rate | $8K | $12K | $17K | $20K |
| Total | $684K | $1.0M | $1.4M | $1.6M |
Peer Context — Where This Hospital Sits
Key metrics vs 31 size-matched peers. Low percentile on margin/efficiency metrics = more room for improvement = larger bridge opportunity.
| Metric | Hospital | P25 | P50 | P75 | Percentile |
|---|---|---|---|---|---|
| Op Margin | 1.3% | -12.5% | 1.3% | 10.3% | P52 |
| Net-to-Gross | 60.2% | 28.0% | 43.6% | 53.7% | P81 |
| Occupancy | 22.3% | 25.3% | 36.7% | 56.8% | P23 |
| Rev/Bed | $1.0M | $579K | $1.1M | $1.9M | P45 |
| Exp/Bed | $1.0M | $735K | $1.0M | $1.8M | P48 |
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.