Bridge Realization Estimate
ML model predicts what fraction of the bridge is achievable (accuracy: 60%, n=5,839)
Expected realization: 73% of modeled bridge. Strengths: Occupancy Rate, Payer Diversity. Risks: Revenue per Bed, Commercial Payer %. Risk-adjusted uplift: $0.3M (vs $0.4M 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 |
|---|---|---|---|---|---|---|---|
| Denial Rate Reduction | 12.0% DEFAULT | 6.5% BENCHMARK | $139K | $8K | $147K | $0 | 12mo |
| Cost to Collect | 4.5% DEFAULT | 2.5% BENCHMARK | $0 | $145K | $145K | $0 | 12mo |
| A/R Days Reduction | 52.00 DEFAULT | 38.00 BENCHMARK | $22K | $66K | $88K | $277K | 9mo |
| Clean Claim Rate | 88.0% DEFAULT | 96.0% BENCHMARK | $0 | $10K | $10K | $0 | 6mo |
| Net Collection Rate | 93.5% DEFAULT | 33.7% 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 |
|---|---|---|---|---|---|---|---|---|
| Denial Rate Reduction | $0 | $37K | $74K | $111K | $147K | $147K | $147K | $147K |
| Cost to Collect | $0 | $36K | $72K | $108K | $145K | $145K | $145K | $145K |
| A/R Days Reduction | $0 | $29K | $59K | $88K | $88K | $88K | $88K | $88K |
| Clean Claim Rate | $0 | $5K | $10K | $10K | $10K | $10K | $10K | $10K |
| Cumulative | $0 | $107K | $214K | $317K | $390K | $390K | $390K | $390K |
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 $390K is added at exit.
| Entry \ Exit | 9.0x | 10.0x | 11.0x | 11.5x | 12.0x |
|---|---|---|---|---|---|
| 8.0x | 59% / 10.2x | 63% / 11.6x | 67% / 13.1x | 69% / 13.9x | 71% / 14.6x |
| 9.0x | 54% / 8.7x | 58% / 10.0x | 62% / 11.3x | 64% / 12.0x | 66% / 12.6x |
| 10.0x | 50% / 7.5x | 54% / 8.7x | 58% / 9.9x | 60% / 10.4x | 62% / 11.1x |
| 11.0x | 45% / 6.5x | 50% / 7.6x | 54% / 8.7x | 56% / 9.2x | 58% / 9.8x |
| 12.0x | 42% / 5.7x | 46% / 6.7x | 50% / 7.7x | 52% / 8.2x | 54% / 8.7x |
Covenant Headroom (at 10x Entry, 6.5x Max Leverage)
Pro forma EBITDA can decline 22% before the 6.5x covenant trips. RCM uplift reduces leverage from 8.5x to 5.1x, adding 3.4 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 | $578K | — | $578K | 8.0% |
| Year 1 | $596K | +$260K | $856K | 11.8% |
| Year 2 | $614K | +$390K | $1.0M | 13.9% |
| Year 3 | $632K | +$390K | $1.0M | 14.1% |
| Year 4 | $651K | +$390K | $1.0M | 14.4% |
| Year 5 | $671K | +$390K | $1.1M | 14.7% |
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% |
|---|---|---|---|---|
| Denial Rate Reductio | $74K | $111K | $147K | $177K |
| Cost to Collect | $72K | $108K | $145K | $174K |
| A/R Days Reduction | $44K | $66K | $88K | $106K |
| Clean Claim Rate | $5K | $7K | $10K | $12K |
| Total | $195K | $292K | $390K | $468K |
Peer Context — Where This Hospital Sits
Key metrics vs 16 size-matched peers. Low percentile on margin/efficiency metrics = more room for improvement = larger bridge opportunity.
| Metric | Hospital | P25 | P50 | P75 | Percentile |
|---|---|---|---|---|---|
| Op Margin | -50.0% | -8.2% | -2.8% | 9.4% | P0 |
| Net-to-Gross | 13.4% | 23.6% | 29.8% | 33.7% | P7 |
| Occupancy | 89.5% | 54.0% | 71.7% | 78.6% | P88 |
| Rev/Bed | $36K | $697K | $1.4M | $2.0M | P7 |
| Exp/Bed | $593K | $632K | $1.2M | $1.9M | P19 |
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.