Bridge Realization Estimate
ML model predicts what fraction of the bridge is achievable (accuracy: 60%, n=5,839)
Expected realization: 65% of modeled bridge. Strengths: Payer Diversity, Occupancy Rate. Risks: Net-to-Gross Ratio, Commercial Payer %. Risk-adjusted uplift: $0.5M (vs $0.8M 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 | $286K | $286K | $0 | 12mo |
| Denial Rate Reduction | 12.0% DEFAULT | 6.5% BENCHMARK | $276K | $8K | $284K | $0 | 12mo |
| A/R Days Reduction | 52.00 DEFAULT | 38.00 BENCHMARK | $44K | $130K | $174K | $549K | 9mo |
| Clean Claim Rate | 88.0% DEFAULT | 96.0% BENCHMARK | $0 | $10K | $10K | $0 | 6mo |
| Net Collection Rate | 93.5% DEFAULT | 51.0% 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 | $72K | $143K | $215K | $286K | $286K | $286K | $286K |
| Denial Rate Reduction | $0 | $71K | $142K | $213K | $284K | $284K | $284K | $284K |
| A/R Days Reduction | $0 | $58K | $116K | $174K | $174K | $174K | $174K | $174K |
| Clean Claim Rate | $0 | $5K | $10K | $10K | $10K | $10K | $10K | $10K |
| Cumulative | $0 | $205K | $411K | $612K | $754K | $754K | $754K | $754K |
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 $754K is added at exit.
| Entry \ Exit | 9.0x | 10.0x | 11.0x | 11.5x | 12.0x |
|---|---|---|---|---|---|
| 8.0x | 44% / 6.2x | 48% / 7.2x | 53% / 8.3x | 54% / 8.8x | 56% / 9.3x |
| 9.0x | 39% / 5.1x | 43% / 6.1x | 48% / 7.0x | 49% / 7.5x | 51% / 7.9x |
| 10.0x | 34% / 4.3x | 39% / 5.1x | 43% / 6.0x | 45% / 6.4x | 47% / 6.8x |
| 11.0x | 29% / 3.6x | 34% / 4.4x | 39% / 5.1x | 41% / 5.5x | 43% / 5.9x |
| 12.0x | 25% / 3.0x | 30% / 3.7x | 35% / 4.4x | 37% / 4.8x | 39% / 5.1x |
Covenant Headroom (at 10x Entry, 6.5x Max Leverage)
Pro forma EBITDA can decline -15% before the 6.5x covenant trips. RCM uplift reduces leverage from 8.5x to 7.5x, adding 1.0 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 | $5.8M | — | $5.8M | 40.8% |
| Year 1 | $6.0M | +$503K | $6.5M | 45.6% |
| Year 2 | $6.2M | +$754K | $7.0M | 48.6% |
| Year 3 | $6.4M | +$754K | $7.1M | 49.9% |
| Year 4 | $6.6M | +$754K | $7.3M | 51.2% |
| Year 5 | $6.8M | +$754K | $7.5M | 52.6% |
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 | $143K | $215K | $286K | $344K |
| Denial Rate Reductio | $142K | $213K | $284K | $341K |
| A/R Days Reduction | $87K | $131K | $174K | $209K |
| Clean Claim Rate | $5K | $7K | $10K | $12K |
| Total | $377K | $566K | $754K | $905K |
Peer Context — Where This Hospital Sits
Key metrics vs 276 size-matched peers. Low percentile on margin/efficiency metrics = more room for improvement = larger bridge opportunity.
| Metric | Hospital | P25 | P50 | P75 | Percentile |
|---|---|---|---|---|---|
| Op Margin | 40.8% | -21.0% | -3.2% | 10.7% | P99 |
| Net-to-Gross | 100.0% | 23.0% | 32.9% | 51.0% | P98 |
| Occupancy | 56.3% | 23.5% | 50.8% | 71.3% | P58 |
| Rev/Bed | $286K | $335K | $562K | $1.1M | P19 |
| Exp/Bed | $170K | $371K | $537K | $1.2M | P4 |
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.