BARTLETT REGIONAL HOSPITAL
1. Target Overview & Investment Thesis
BARTLETT REGIONAL HOSPITAL is a 45-bed suburban community hospital in JUNEAU BOROUGH, AK with $125.3M in net patient revenue and a -0.8% operating margin. The hospital serves a payer mix of 45.8% Medicare, 22.6% Medicaid, and 31.6% commercial.
Thesis: Turnaround. Our ML models identify $9.2M in annual EBITDA improvement potential from RCM optimization across 5 levers, lifting margin from -0.8% to 6.5% (+736bps).
| Net Revenue HCRIS | $125.3M |
| Current EBITDA COMPUTED | $-1.0M |
| Operating Margin COMPUTED | -0.8% |
| Occupancy HCRIS | 45.0% |
| Revenue / Bed COMPUTED | $2.8M |
| Net-to-Gross HCRIS | 55.7% |
| Distress Probability ML | 55.0% |
2. Market Context & Competitive Position
AK has 24 Medicare-certified hospitals with a median operating margin of -2.1%. The target's margin of -0.8% places it above the state median. Among 2702 size-comparable peers (22-90 beds), the median margin is -4.1%. The target performs in line with or above peers.
3. RCM Performance Analysis — Comparable Hospitals
Comps selected by bed count (22-90), prioritizing same-state peers. 2702 hospitals in the comp set.
| Hospital | State | Beds | Revenue | Margin |
|---|---|---|---|---|
| BARTLETT REGIONAL HOSPITAL (Target) | AK | 45 | $125.3M | -0.8% |
| DANA-FARBER CANCER INSTITUTE | MA | 30 | $1.88B | -35.1% |
| MIDWESTERN REGIONAL MEDICAL CE | IL | 73 | $1.38B | 80.5% |
| MERCY WALWORTH HOSPITAL | WI | 25 | $616.4M | 4.4% |
| RANCHO LOS AMIGOS NATL.REHAB.C | CA | 83 | $512.6M | 41.9% |
| USC NORRIS CANCER HOSPITAL | CA | 60 | $468.7M | 19.1% |
| ST. JOSEPHS COMM. HOSPT. | WI | 70 | $436.8M | 66.1% |
| LAKEVIEW MEMORIAL | MN | 68 | $411.9M | 60.9% |
| MOUNTAIN VIEW HOSPITAL | ID | 43 | $382.5M | 8.7% |
4. Predicted Improvement Opportunities
Improvement targets set at P75 of comparable peers with 60% gap closure assumption. Coefficients calibrated to published research bands. Total EBITDA uplift: $9.2M (736bps margin improvement).
| Lever | Current | Target | EBITDA Impact | Margin | Ramp |
|---|---|---|---|---|---|
| Net Collection Rate | 93.5% | 97.0% | $2.6M | +210bp | 18mo |
| Cost to Collect | 4.5% | 2.5% | $2.5M | +200bp | 12mo |
| Denial Rate Reduction | 12.0% | 6.5% | $2.5M | +198bp | 12mo |
| A/R Days Reduction | 5200.0% | 3800.0% | $1.5M | +122bp | 9mo |
| Clean Claim Rate | 88.0% | 96.0% | $80K | +6bp | 6mo |
5. EBITDA Bridge
| Current EBITDA | $-1.0M |
| + RCM Uplift | +$9.2M |
| Pro Forma EBITDA | $8.2M |
| Current Margin | -0.8% |
| Pro Forma Margin | 6.5% |
| WC Released (1x) | $4.8M |
6. Returns Analysis — Scenario Matrix
5-year hold, 5.5x leverage, 3% organic growth, 10%/yr debt paydown. Base case uses 100% of predicted RCM uplift. Bull case: 130% uplift at lower entry. Bear case: 50% uplift at higher entry.
| Scenario | Entry | Exit | Equity In | Equity Out | MOIC | IRR |
|---|---|---|---|---|---|---|
| Base Case | 10.0x | 10.0x | $-1.6M | $85.5M | 0.00x | -100.0% |
| Base (11x exit) | 10.0x | 11.0x | $-1.6M | $93.5M | 0.00x | -100.0% |
| Bull Case | 9.0x | 11.0x | $-1.4M | $123.5M | 0.00x | -100.0% |
| Bull (12x exit) | 9.0x | 12.0x | $-1.4M | $134.3M | 0.00x | -100.0% |
| Bear Case | 11.0x | 10.0x | $-1.7M | $39.9M | 0.00x | -100.0% |
| Bear (11x exit) | 11.0x | 11.0x | $-1.7M | $43.3M | 0.00x | -100.0% |
7. Key Risks & Mitigants
| Severity | Risk Factor | Mitigant |
|---|---|---|
| High | Negative operating margin | RCM uplift bridge shows clear path to profitability; working capital release provides near-term cash cushion |
| Medium | Elevated Medicaid exposure (22.6%) | Medicaid reimburses below cost in most states. Mitigant: denial reduction lever has highest impact on Medicaid claims |
| High | Elevated distress probability | Model estimates 55.0% probability of financial distress. Mitigant: distressed entry pricing (7-9x) compensates for risk |
8. Data Sources & Methodology Appendix
Data Sources
- CMS HCRIS Cost Reports (Medicare-certified hospitals)
- CMS Medicare Utilization (DRG-level volumes)
- CMS Chronic Conditions (county-level disease prevalence)
- HCRIS multi-year trend data (financial time series)
Comparable Selection
- 2702 hospitals with 22-90 beds
- Same-state prioritization (n=8)
- Comp margins: P25=-16.8% / P50=-4.1% / P75=6.8%
Bridge Methodology
- Targets: P75 of comparable peers (60% gap closure)
- Denial: avoidable share = 35% of delta × NPR
- AR: bad debt coefficient = $0.65 per day per $1K NPR
- NCR: 60% coefficient on collection rate improvement
- CDI: 0.75% of Medicare revenue per 0.01 CMI point
Returns Assumptions
- Leverage: 5.5x entry (84.6% debt / 15.4% equity)
- Organic growth: 3% annual EBITDA growth
- Debt paydown: 10% of principal per year
- Hold period: 5 years
Generated by SeekingChartis on April 26, 2026. All predictions use public data only. Confidence intervals calibrated via split conformal prediction (90% coverage target). This memo is for informational purposes and does not constitute investment advice.