Bridge Realization Estimate
ML model predicts what fraction of the bridge is achievable (accuracy: 60%, n=5,839)
Expected realization: 74% of modeled bridge. Strengths: Occupancy Rate, Bed Count. Risks: Revenue per Bed. Risk-adjusted uplift: $0.7M (vs $0.9M 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 | $356K | $356K | $0 | 12mo |
| Denial Rate Reduction | 12.0% DEFAULT | 6.5% BENCHMARK | $343K | $10K | $353K | $0 | 12mo |
| A/R Days Reduction | 52.00 DEFAULT | 38.00 BENCHMARK | $55K | $162K | $217K | $683K | 9mo |
| Clean Claim Rate | 88.0% DEFAULT | 96.0% BENCHMARK | $0 | $11K | $11K | $0 | 6mo |
| Net Collection Rate | 93.5% DEFAULT | 56.1% 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 | $89K | $178K | $267K | $356K | $356K | $356K | $356K |
| Denial Rate Reduction | $0 | $88K | $176K | $265K | $353K | $353K | $353K | $353K |
| A/R Days Reduction | $0 | $72K | $145K | $217K | $217K | $217K | $217K | $217K |
| Clean Claim Rate | $0 | $6K | $11K | $11K | $11K | $11K | $11K | $11K |
| Cumulative | $0 | $255K | $510K | $760K | $937K | $937K | $937K | $937K |
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 $937K is added at exit.
| Entry \ Exit | 9.0x | 10.0x | 11.0x | 11.5x | 12.0x |
|---|---|---|---|---|---|
| 8.0x | 80% / 18.8x | 84% / 21.2x | 88% / 23.7x | 90% / 24.9x | 92% / 26.1x |
| 9.0x | 75% / 16.4x | 79% / 18.5x | 83% / 20.7x | 85% / 21.8x | 87% / 22.9x |
| 10.0x | 70% / 14.4x | 75% / 16.4x | 79% / 18.3x | 81% / 19.3x | 83% / 20.3x |
| 11.0x | 66% / 12.8x | 71% / 14.6x | 75% / 16.4x | 77% / 17.2x | 79% / 18.1x |
| 12.0x | 63% / 11.4x | 67% / 13.1x | 71% / 14.7x | 73% / 15.5x | 75% / 16.4x |
Covenant Headroom (at 10x Entry, 6.5x Max Leverage)
Pro forma EBITDA can decline 54% before the 6.5x covenant trips. RCM uplift reduces leverage from 8.5x to 3.0x, adding 5.5 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 | $505K | — | $505K | 2.8% |
| Year 1 | $520K | +$625K | $1.1M | 6.4% |
| Year 2 | $536K | +$937K | $1.5M | 8.3% |
| Year 3 | $552K | +$937K | $1.5M | 8.4% |
| Year 4 | $568K | +$937K | $1.5M | 8.5% |
| Year 5 | $585K | +$937K | $1.5M | 8.5% |
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% |
|---|---|---|---|---|
| Cost to Collect | $178K | $267K | $356K | $428K |
| Denial Rate Reductio | $176K | $265K | $353K | $423K |
| A/R Days Reduction | $108K | $163K | $217K | $260K |
| Clean Claim Rate | $6K | $9K | $11K | $14K |
| Total | $469K | $703K | $937K | $1.1M |
Peer Context — Where This Hospital Sits
Key metrics vs 126 size-matched peers. Low percentile on margin/efficiency metrics = more room for improvement = larger bridge opportunity.
| Metric | Hospital | P25 | P50 | P75 | Percentile |
|---|---|---|---|---|---|
| Op Margin | 2.8% | -21.2% | -3.8% | 4.9% | P68 |
| Net-to-Gross | 51.4% | 31.5% | 42.0% | 56.1% | P68 |
| Occupancy | 85.7% | 21.3% | 46.5% | 65.1% | P96 |
| Rev/Bed | $445K | $273K | $435K | $868K | P50 |
| Exp/Bed | $433K | $261K | $442K | $965K | P48 |
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.