Bridge Realization Estimate
ML model predicts what fraction of the bridge is achievable (accuracy: 60%, n=5,839)
Expected realization: 68% of modeled bridge. Strengths: Commercial Payer %, Occupancy Rate. Risks: Revenue per Bed, Net-to-Gross Ratio. Risk-adjusted uplift: $0.6M (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 | $315K | $315K | $0 | 12mo |
| Denial Rate Reduction | 12.0% DEFAULT | 6.5% BENCHMARK | $303K | $9K | $311K | $0 | 12mo |
| A/R Days Reduction | 52.00 DEFAULT | 38.00 BENCHMARK | $48K | $143K | $191K | $603K | 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 | $79K | $157K | $236K | $315K | $315K | $315K | $315K |
| Denial Rate Reduction | $0 | $78K | $156K | $234K | $311K | $311K | $311K | $311K |
| A/R Days Reduction | $0 | $64K | $128K | $191K | $191K | $191K | $191K | $191K |
| Clean Claim Rate | $0 | $5K | $10K | $10K | $10K | $10K | $10K | $10K |
| Cumulative | $0 | $225K | $451K | $671K | $827K | $827K | $827K | $827K |
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 $827K is added at exit.
| Entry \ Exit | 9.0x | 10.0x | 11.0x | 11.5x | 12.0x |
|---|---|---|---|---|---|
| 8.0x | 98% / 30.4x | 103% / 34.1x | 107% / 37.9x | 109% / 39.7x | 111% / 41.6x |
| 9.0x | 93% / 26.6x | 97% / 30.0x | 102% / 33.3x | 104% / 35.0x | 105% / 36.6x |
| 10.0x | 88% / 23.7x | 93% / 26.6x | 97% / 29.6x | 99% / 31.1x | 101% / 32.6x |
| 11.0x | 84% / 21.2x | 89% / 23.9x | 93% / 26.6x | 95% / 28.0x | 97% / 29.4x |
| 12.0x | 81% / 19.2x | 85% / 21.7x | 89% / 24.2x | 91% / 25.4x | 93% / 26.6x |
Covenant Headroom (at 10x Entry, 6.5x Max Leverage)
Pro forma EBITDA can decline 71% before the 6.5x covenant trips. RCM uplift reduces leverage from 8.5x to 1.9x, adding 6.6 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 | $240K | — | $240K | 1.5% |
| Year 1 | $248K | +$552K | $799K | 5.1% |
| Year 2 | $255K | +$827K | $1.1M | 6.9% |
| Year 3 | $263K | +$827K | $1.1M | 6.9% |
| Year 4 | $271K | +$827K | $1.1M | 7.0% |
| Year 5 | $279K | +$827K | $1.1M | 7.0% |
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 | $157K | $236K | $315K | $377K |
| Denial Rate Reductio | $156K | $234K | $311K | $374K |
| A/R Days Reduction | $96K | $144K | $191K | $230K |
| Clean Claim Rate | $5K | $8K | $10K | $12K |
| Total | $414K | $621K | $827K | $993K |
Peer Context — Where This Hospital Sits
Key metrics vs 287 size-matched peers. Low percentile on margin/efficiency metrics = more room for improvement = larger bridge opportunity.
| Metric | Hospital | P25 | P50 | P75 | Percentile |
|---|---|---|---|---|---|
| Op Margin | 1.5% | -23.7% | -2.9% | 10.4% | P56 |
| Net-to-Gross | 62.0% | 24.4% | 34.4% | 51.0% | P85 |
| Occupancy | 57.1% | 19.3% | 44.2% | 69.4% | P64 |
| Rev/Bed | $393K | $371K | $584K | $1.2M | P27 |
| Exp/Bed | $387K | $402K | $631K | $1.3M | P23 |
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.