ACADIA SONORA BEHAVIORAL HOSPITAL
1. Target Overview & Investment Thesis
ACADIA SONORA BEHAVIORAL HOSPITAL is a 140-bed community hospital in PIMA, AZ with $45.6M in net patient revenue and a 16.0% operating margin. The hospital serves a payer mix of 5.7% Medicare, 0.0% Medicaid, and 94.3% commercial.
Thesis: Turnaround. Our ML models identify $3.4M in annual EBITDA improvement potential from RCM optimization across 5 levers, lifting margin from 16.0% to 23.4% (+736bps).
| Net Revenue HCRIS | $45.6M |
| Current EBITDA COMPUTED | $7.3M |
| Operating Margin COMPUTED | 16.0% |
| Occupancy HCRIS | 88.5% |
| Revenue / Bed COMPUTED | $326K |
| Net-to-Gross HCRIS | 40.1% |
| Distress Probability ML | nan% |
2. Market Context & Competitive Position
AZ has 124 Medicare-certified hospitals with a median operating margin of -0.8%. The target's margin of 16.0% places it above the state median. Among 48 size-comparable peers (70-280 beds), the median margin is -0.8%. The target performs in line with or above peers.
3. RCM Performance Analysis — Comparable Hospitals
Comps selected by bed count (70-280), prioritizing same-state peers. 48 hospitals in the comp set.
| Hospital | State | Beds | Revenue | Margin |
|---|---|---|---|---|
| ACADIA SONORA BEHAVIORAL HOSPI (Target) | AZ | 140 | $45.6M | 16.0% |
| HONORHEALTH JOHN C. LINCOLN ME | AZ | 258 | $618.4M | -7.9% |
| BANNER GATEWAY MEDICAL CENTER | AZ | 185 | $573.8M | 5.2% |
| FLAGSTAFF MEDICAL CENTER | AZ | 242 | $477.9M | -0.8% |
| YAVAPAI REGIONAL MEDICAL CENTE | AZ | 218 | $456.9M | -2.2% |
| ABRAZO ARROWHEAD CAMPUS | AZ | 270 | $406.4M | 11.7% |
| MERCY GILBERT MEDICAL CENTER | AZ | 197 | $381.9M | 6.3% |
| KINGMAN REGIONAL MEDICAL CENTE | AZ | 196 | $373.6M | -6.0% |
| HONORHEALTH DEER VALLEY MED CT | AZ | 204 | $372.1M | 3.3% |
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: $3.4M (736bps margin improvement).
| Lever | Current | Target | EBITDA Impact | Margin | Ramp |
|---|---|---|---|---|---|
| Net Collection Rate | 93.5% | 97.0% | $958K | +210bp | 18mo |
| Cost to Collect | 4.5% | 2.5% | $912K | +200bp | 12mo |
| Denial Rate Reduction | 12.0% | 6.5% | $903K | +198bp | 12mo |
| A/R Days Reduction | 5200.0% | 3800.0% | $555K | +122bp | 9mo |
| Clean Claim Rate | 88.0% | 96.0% | $29K | +6bp | 6mo |
5. EBITDA Bridge
| Current EBITDA | $7.3M |
| + RCM Uplift | +$3.4M |
| Pro Forma EBITDA | $10.7M |
| Current Margin | 16.0% |
| Pro Forma Margin | 23.4% |
| WC Released (1x) | $1.7M |
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 | $11.2M | $81.7M | 7.28x | 48.7% |
| Base (11x exit) | 10.0x | 11.0x | $11.2M | $93.5M | 8.33x | 52.8% |
| Bull Case | 9.0x | 11.0x | $10.1M | $108.3M | 10.71x | 60.7% |
| Bull (12x exit) | 9.0x | 12.0x | $10.1M | $121.1M | 11.98x | 64.3% |
| Bear Case | 11.0x | 10.0x | $12.4M | $61.3M | 4.96x | 37.8% |
| Bear (11x exit) | 11.0x | 11.0x | $12.4M | $71.4M | 5.78x | 42.0% |
7. Key Risks & Mitigants
| Severity | Risk Factor | Mitigant |
|---|---|---|
| Medium | Standard execution risk | RCM improvement requires management buy-in and 12-18 month implementation timeline |
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
- 48 hospitals with 70-280 beds
- Same-state prioritization (n=49)
- Comp margins: P25=-6.6% / P50=-0.8% / P75=10.2%
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.