Bridge Realization Estimate
ML model predicts what fraction of the bridge is achievable (accuracy: 60%, n=5,839)
Expected realization: 73% of modeled bridge. Strengths: Occupancy Rate, Bed Count. Risks: Revenue per Bed, Net-to-Gross Ratio. Risk-adjusted uplift: $0.4M (vs $0.5M 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 |
|---|---|---|---|---|---|---|---|
| Denial Rate Reduction | 12.0% DEFAULT | 6.5% BENCHMARK | $184K | $8K | $192K | $0 | 12mo |
| Cost to Collect | 4.5% DEFAULT | 2.5% BENCHMARK | $0 | $191K | $191K | $0 | 12mo |
| A/R Days Reduction | 52.00 DEFAULT | 38.00 BENCHMARK | $29K | $87K | $116K | $366K | 9mo |
| Clean Claim Rate | 88.0% DEFAULT | 96.0% BENCHMARK | $0 | $10K | $10K | $0 | 6mo |
| Net Collection Rate | 93.5% DEFAULT | 54.0% 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 |
|---|---|---|---|---|---|---|---|---|
| Denial Rate Reduction | $0 | $48K | $96K | $144K | $192K | $192K | $192K | $192K |
| Cost to Collect | $0 | $48K | $95K | $143K | $191K | $191K | $191K | $191K |
| A/R Days Reduction | $0 | $39K | $77K | $116K | $116K | $116K | $116K | $116K |
| Clean Claim Rate | $0 | $5K | $10K | $10K | $10K | $10K | $10K | $10K |
| Cumulative | $0 | $139K | $278K | $413K | $508K | $508K | $508K | $508K |
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 $508K is added at exit.
| Entry \ Exit | 9.0x | 10.0x | 11.0x | 11.5x | 12.0x |
|---|---|---|---|---|---|
| 8.0x | 48% / 7.0x | 52% / 8.2x | 56% / 9.3x | 58% / 9.9x | 60% / 10.4x |
| 9.0x | 43% / 5.9x | 47% / 6.9x | 51% / 7.9x | 53% / 8.4x | 55% / 8.9x |
| 10.0x | 38% / 5.0x | 43% / 5.9x | 47% / 6.8x | 49% / 7.2x | 50% / 7.7x |
| 11.0x | 33% / 4.2x | 38% / 5.0x | 43% / 5.9x | 44% / 6.3x | 46% / 6.7x |
| 12.0x | 29% / 3.6x | 34% / 4.4x | 39% / 5.1x | 41% / 5.5x | 43% / 5.9x |
Covenant Headroom (at 10x Entry, 6.5x Max Leverage)
Pro forma EBITDA can decline -5% before the 6.5x covenant trips. RCM uplift reduces leverage from 8.5x to 6.8x, adding 1.7 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 | $2.1M | — | $2.1M | 21.7% |
| Year 1 | $2.1M | +$339K | $2.5M | 25.9% |
| Year 2 | $2.2M | +$508K | $2.7M | 28.4% |
| Year 3 | $2.3M | +$508K | $2.8M | 29.1% |
| Year 4 | $2.3M | +$508K | $2.8M | 29.8% |
| Year 5 | $2.4M | +$508K | $2.9M | 30.5% |
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% |
|---|---|---|---|---|
| Denial Rate Reductio | $96K | $144K | $192K | $230K |
| Cost to Collect | $95K | $143K | $191K | $229K |
| A/R Days Reduction | $58K | $87K | $116K | $139K |
| Clean Claim Rate | $5K | $7K | $10K | $12K |
| Total | $254K | $381K | $508K | $610K |
Peer Context — Where This Hospital Sits
Key metrics vs 229 size-matched peers. Low percentile on margin/efficiency metrics = more room for improvement = larger bridge opportunity.
| Metric | Hospital | P25 | P50 | P75 | Percentile |
|---|---|---|---|---|---|
| Op Margin | 21.7% | -40.1% | -8.9% | 9.2% | P91 |
| Net-to-Gross | 61.8% | 25.6% | 37.7% | 54.0% | P82 |
| Occupancy | 81.5% | 12.5% | 26.8% | 53.0% | P94 |
| Rev/Bed | $454K | $439K | $654K | $1.3M | P27 |
| Exp/Bed | $356K | $469K | $877K | $1.4M | P13 |
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.