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, Net-to-Gross Ratio. Risks: Occupancy Rate, Commercial Payer %. Risk-adjusted uplift: $1.3M (vs $2.0M 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 | $762K | $762K | $0 | 12mo |
| Denial Rate Reduction | 12.0% DEFAULT | 6.5% BENCHMARK | $734K | $21K | $755K | $0 | 12mo |
| A/R Days Reduction | 52.00 DEFAULT | 38.00 BENCHMARK | $117K | $347K | $464K | $1.5M | 9mo |
| Clean Claim Rate | 88.0% DEFAULT | 96.0% BENCHMARK | $0 | $24K | $24K | $0 | 6mo |
| Net Collection Rate | 93.5% DEFAULT | 54.2% 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 | $191K | $381K | $572K | $762K | $762K | $762K | $762K |
| Denial Rate Reduction | $0 | $189K | $377K | $566K | $755K | $755K | $755K | $755K |
| A/R Days Reduction | $0 | $155K | $309K | $464K | $464K | $464K | $464K | $464K |
| Clean Claim Rate | $0 | $12K | $24K | $24K | $24K | $24K | $24K | $24K |
| Cumulative | $0 | $546K | $1.1M | $1.6M | $2.0M | $2.0M | $2.0M | $2.0M |
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 $2.0M is added at exit.
| Entry \ Exit | 9.0x | 10.0x | 11.0x | 11.5x | 12.0x |
|---|---|---|---|---|---|
| 8.0x | 89% / 24.2x | 94% / 27.3x | 98% / 30.4x | 100% / 31.9x | 102% / 33.4x |
| 9.0x | 84% / 21.2x | 89% / 23.9x | 93% / 26.6x | 95% / 28.0x | 97% / 29.3x |
| 10.0x | 80% / 18.8x | 84% / 21.2x | 88% / 23.6x | 90% / 24.9x | 92% / 26.1x |
| 11.0x | 76% / 16.8x | 80% / 19.0x | 84% / 21.2x | 86% / 22.3x | 88% / 23.4x |
| 12.0x | 72% / 15.1x | 76% / 17.1x | 80% / 19.2x | 82% / 20.2x | 84% / 21.2x |
Covenant Headroom (at 10x Entry, 6.5x Max Leverage)
Pro forma EBITDA can decline 64% before the 6.5x covenant trips. RCM uplift reduces leverage from 8.5x to 2.3x, adding 6.1 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 | $771K | — | $771K | 2.0% |
| Year 1 | $794K | +$1.3M | $2.1M | 5.6% |
| Year 2 | $818K | +$2.0M | $2.8M | 7.4% |
| Year 3 | $842K | +$2.0M | $2.8M | 7.5% |
| Year 4 | $868K | +$2.0M | $2.9M | 7.5% |
| Year 5 | $894K | +$2.0M | $2.9M | 7.6% |
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 | $381K | $572K | $762K | $915K |
| Denial Rate Reductio | $377K | $566K | $755K | $906K |
| A/R Days Reduction | $232K | $348K | $464K | $557K |
| Clean Claim Rate | $12K | $18K | $24K | $29K |
| Total | $1.0M | $1.5M | $2.0M | $2.4M |
Peer Context — Where This Hospital Sits
Key metrics vs 221 size-matched peers. Low percentile on margin/efficiency metrics = more room for improvement = larger bridge opportunity.
| Metric | Hospital | P25 | P50 | P75 | Percentile |
|---|---|---|---|---|---|
| Op Margin | 2.0% | -41.9% | -12.0% | 8.9% | P65 |
| Net-to-Gross | 14.1% | 25.6% | 37.9% | 54.2% | P5 |
| Occupancy | 28.8% | 12.5% | 25.4% | 52.2% | P54 |
| Rev/Bed | $1.9M | $439K | $670K | $1.3M | P86 |
| Exp/Bed | $1.9M | $500K | $913K | $1.4M | P82 |
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.