Bridge Realization Estimate
ML model predicts what fraction of the bridge is achievable (accuracy: 60%, n=5,839)
Expected realization: 64% of modeled bridge. Strengths: Bed Count, Commercial Payer %. Risks: Net-to-Gross Ratio, Occupancy Rate. Risk-adjusted uplift: $0.6M (vs $1.0M 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 | $367K | $367K | $0 | 12mo |
| Denial Rate Reduction | 12.0% DEFAULT | 6.5% BENCHMARK | $353K | $10K | $363K | $0 | 12mo |
| A/R Days Reduction | 52.00 DEFAULT | 38.00 BENCHMARK | $56K | $167K | $223K | $704K | 9mo |
| Clean Claim Rate | 88.0% DEFAULT | 96.0% BENCHMARK | $0 | $12K | $12K | $0 | 6mo |
| Net Collection Rate | 93.5% DEFAULT | 52.9% 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 | $92K | $184K | $275K | $367K | $367K | $367K | $367K |
| Denial Rate Reduction | $0 | $91K | $182K | $273K | $363K | $363K | $363K | $363K |
| A/R Days Reduction | $0 | $74K | $149K | $223K | $223K | $223K | $223K | $223K |
| Clean Claim Rate | $0 | $6K | $12K | $12K | $12K | $12K | $12K | $12K |
| Cumulative | $0 | $263K | $526K | $783K | $966K | $966K | $966K | $966K |
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 $966K is added at exit.
| Entry \ Exit | 9.0x | 10.0x | 11.0x | 11.5x | 12.0x |
|---|---|---|---|---|---|
| 8.0x | 83% / 20.8x | 88% / 23.4x | 92% / 26.1x | 94% / 27.4x | 96% / 28.8x |
| 9.0x | 78% / 18.1x | 83% / 20.5x | 87% / 22.8x | 89% / 24.0x | 91% / 25.2x |
| 10.0x | 74% / 16.0x | 78% / 18.1x | 82% / 20.2x | 84% / 21.3x | 86% / 22.4x |
| 11.0x | 70% / 14.2x | 74% / 16.2x | 78% / 18.1x | 80% / 19.1x | 82% / 20.0x |
| 12.0x | 66% / 12.8x | 71% / 14.5x | 75% / 16.3x | 77% / 17.2x | 78% / 18.1x |
Covenant Headroom (at 10x Entry, 6.5x Max Leverage)
Pro forma EBITDA can decline 58% before the 6.5x covenant trips. RCM uplift reduces leverage from 8.5x to 2.7x, adding 5.8 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 | $454K | — | $454K | 2.5% |
| Year 1 | $468K | +$644K | $1.1M | 6.1% |
| Year 2 | $482K | +$966K | $1.4M | 7.9% |
| Year 3 | $497K | +$966K | $1.5M | 8.0% |
| Year 4 | $512K | +$966K | $1.5M | 8.0% |
| Year 5 | $527K | +$966K | $1.5M | 8.1% |
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 | $184K | $275K | $367K | $441K |
| Denial Rate Reductio | $182K | $273K | $363K | $436K |
| A/R Days Reduction | $112K | $168K | $223K | $268K |
| Clean Claim Rate | $6K | $9K | $12K | $14K |
| Total | $483K | $724K | $966K | $1.2M |
Peer Context — Where This Hospital Sits
Key metrics vs 88 size-matched peers. Low percentile on margin/efficiency metrics = more room for improvement = larger bridge opportunity.
| Metric | Hospital | P25 | P50 | P75 | Percentile |
|---|---|---|---|---|---|
| Op Margin | 2.5% | -9.9% | 1.6% | 8.6% | P51 |
| Net-to-Gross | 95.0% | 38.2% | 47.0% | 52.9% | P99 |
| Occupancy | 43.3% | 25.5% | 37.7% | 49.9% | P59 |
| Rev/Bed | $734K | $937K | $2.0M | $3.1M | P21 |
| Exp/Bed | $716K | $1.1M | $1.8M | $3.0M | P14 |
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.