Bridge Realization Estimate
ML model predicts what fraction of the bridge is achievable (accuracy: 60%, n=5,839)
Expected realization: 61% of modeled bridge. Strengths: Revenue per Bed, Bed Count. Risks: Occupancy Rate, Net-to-Gross Ratio. Risk-adjusted uplift: $0.6M (vs $1.1M 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 | $402K | $402K | $0 | 12mo |
| Denial Rate Reduction | 12.0% DEFAULT | 6.5% BENCHMARK | $387K | $11K | $398K | $0 | 12mo |
| A/R Days Reduction | 52.00 DEFAULT | 38.00 BENCHMARK | $62K | $183K | $245K | $771K | 9mo |
| Clean Claim Rate | 88.0% DEFAULT | 96.0% BENCHMARK | $0 | $13K | $13K | $0 | 6mo |
| Net Collection Rate | 93.5% DEFAULT | 71.5% 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 | $100K | $201K | $301K | $402K | $402K | $402K | $402K |
| Denial Rate Reduction | $0 | $99K | $199K | $298K | $398K | $398K | $398K | $398K |
| A/R Days Reduction | $0 | $82K | $163K | $245K | $245K | $245K | $245K | $245K |
| Clean Claim Rate | $0 | $6K | $13K | $13K | $13K | $13K | $13K | $13K |
| Cumulative | $0 | $288K | $576K | $857K | $1.1M | $1.1M | $1.1M | $1.1M |
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 $1.1M is added at exit.
| Entry \ Exit | 9.0x | 10.0x | 11.0x | 11.5x | 12.0x |
|---|---|---|---|---|---|
| 8.0x | 46% / 6.6x | 51% / 7.7x | 55% / 8.8x | 56% / 9.4x | 58% / 9.9x |
| 9.0x | 41% / 5.5x | 45% / 6.5x | 50% / 7.5x | 51% / 8.0x | 53% / 8.5x |
| 10.0x | 36% / 4.7x | 41% / 5.5x | 45% / 6.4x | 47% / 6.9x | 49% / 7.3x |
| 11.0x | 32% / 3.9x | 37% / 4.7x | 41% / 5.5x | 43% / 5.9x | 45% / 6.3x |
| 12.0x | 27% / 3.3x | 32% / 4.1x | 37% / 4.8x | 39% / 5.2x | 41% / 5.5x |
Covenant Headroom (at 10x Entry, 6.5x Max Leverage)
Pro forma EBITDA can decline -9% before the 6.5x covenant trips. RCM uplift reduces leverage from 8.5x to 7.1x, adding 1.4 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 | $5.5M | — | $5.5M | 27.3% |
| Year 1 | $5.7M | +$705K | $6.4M | 31.7% |
| Year 2 | $5.8M | +$1.1M | $6.9M | 34.3% |
| Year 3 | $6.0M | +$1.1M | $7.1M | 35.1% |
| Year 4 | $6.2M | +$1.1M | $7.2M | 36.0% |
| Year 5 | $6.4M | +$1.1M | $7.4M | 37.0% |
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 | $201K | $301K | $402K | $482K |
| Denial Rate Reductio | $199K | $298K | $398K | $477K |
| A/R Days Reduction | $122K | $183K | $245K | $293K |
| Clean Claim Rate | $6K | $10K | $13K | $15K |
| Total | $529K | $793K | $1.1M | $1.3M |
Peer Context — Where This Hospital Sits
Key metrics vs 8 size-matched peers. Low percentile on margin/efficiency metrics = more room for improvement = larger bridge opportunity.
| Metric | Hospital | P25 | P50 | P75 | Percentile |
|---|---|---|---|---|---|
| Op Margin | 27.3% | -49.5% | -44.0% | -24.3% | P100 |
| Net-to-Gross | 99.9% | 19.4% | 31.1% | 58.0% | P100 |
| Occupancy | 16.9% | 12.9% | 16.3% | 21.0% | P50 |
| Rev/Bed | $3.3M | $709K | $838K | $2.2M | P75 |
| Exp/Bed | $2.4M | $1.2M | $1.4M | $2.7M | P62 |
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.