Bridge Realization Estimate
ML model predicts what fraction of the bridge is achievable (accuracy: 60%, n=5,839)
Expected realization: 59% of modeled bridge. Strengths: Net-to-Gross Ratio, Bed Count. Risks: Occupancy Rate, Commercial Payer %. Risk-adjusted uplift: $1.9M (vs $3.2M 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 | $1.2M | $1.2M | $0 | 12mo |
| Denial Rate Reduction | 12.0% DEFAULT | 6.5% BENCHMARK | $1.2M | $33K | $1.2M | $0 | 12mo |
| A/R Days Reduction | 52.00 DEFAULT | 38.00 BENCHMARK | $184K | $546K | $731K | $2.3M | 9mo |
| Clean Claim Rate | 88.0% DEFAULT | 96.0% BENCHMARK | $0 | $38K | $38K | $0 | 6mo |
| Net Collection Rate | 93.5% DEFAULT | 50.7% 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 | $300K | $600K | $901K | $1.2M | $1.2M | $1.2M | $1.2M |
| Denial Rate Reduction | $0 | $297K | $594K | $891K | $1.2M | $1.2M | $1.2M | $1.2M |
| A/R Days Reduction | $0 | $244K | $487K | $731K | $731K | $731K | $731K | $731K |
| Clean Claim Rate | $0 | $19K | $38K | $38K | $38K | $38K | $38K | $38K |
| Cumulative | $0 | $860K | $1.7M | $2.6M | $3.2M | $3.2M | $3.2M | $3.2M |
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 $3.2M is added at exit.
| Entry \ Exit | 9.0x | 10.0x | 11.0x | 11.5x | 12.0x |
|---|---|---|---|---|---|
| 8.0x | 76% / 16.8x | 80% / 19.0x | 84% / 21.2x | 86% / 22.3x | 88% / 23.4x |
| 9.0x | 71% / 14.5x | 75% / 16.5x | 79% / 18.5x | 81% / 19.5x | 83% / 20.5x |
| 10.0x | 66% / 12.8x | 71% / 14.5x | 75% / 16.3x | 77% / 17.2x | 78% / 18.1x |
| 11.0x | 62% / 11.3x | 67% / 12.9x | 71% / 14.5x | 73% / 15.3x | 74% / 16.1x |
| 12.0x | 59% / 10.1x | 63% / 11.6x | 67% / 13.1x | 69% / 13.8x | 71% / 14.5x |
Covenant Headroom (at 10x Entry, 6.5x Max Leverage)
Pro forma EBITDA can decline 49% before the 6.5x covenant trips. RCM uplift reduces leverage from 8.5x to 3.3x, adding 5.2 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 | $2.0M | — | $2.0M | 3.3% |
| Year 1 | $2.1M | +$2.1M | $4.2M | 6.9% |
| Year 2 | $2.1M | +$3.2M | $5.3M | 8.8% |
| Year 3 | $2.2M | +$3.2M | $5.3M | 8.9% |
| Year 4 | $2.3M | +$3.2M | $5.4M | 9.0% |
| Year 5 | $2.3M | +$3.2M | $5.5M | 9.1% |
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 | $600K | $901K | $1.2M | $1.4M |
| Denial Rate Reductio | $594K | $891K | $1.2M | $1.4M |
| A/R Days Reduction | $365K | $548K | $731K | $877K |
| Clean Claim Rate | $19K | $29K | $38K | $46K |
| Total | $1.6M | $2.4M | $3.2M | $3.8M |
Peer Context — Where This Hospital Sits
Key metrics vs 231 size-matched peers. Low percentile on margin/efficiency metrics = more room for improvement = larger bridge opportunity.
| Metric | Hospital | P25 | P50 | P75 | Percentile |
|---|---|---|---|---|---|
| Op Margin | 3.3% | -14.0% | 0.2% | 11.7% | P58 |
| Net-to-Gross | 11.1% | 19.5% | 30.9% | 50.7% | P3 |
| Occupancy | 7.2% | 32.3% | 56.2% | 74.0% | P5 |
| Rev/Bed | $1.1M | $327K | $544K | $1.0M | P76 |
| Exp/Bed | $1.0M | $339K | $495K | $1.1M | P73 |
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.