CENTURA PARKER ADVENTIST HOSPITAL
1. Target Overview & Investment Thesis
CENTURA PARKER ADVENTIST HOSPITAL is a 162-bed suburban community hospital in DOUGLAS, CO with $351.5M in net patient revenue and a 12.9% operating margin. The hospital serves a payer mix of 24.3% Medicare, 15.9% Medicaid, and 59.8% commercial.
Thesis: Turnaround. Our ML models identify $25.9M in annual EBITDA improvement potential from RCM optimization across 5 levers, lifting margin from 12.9% to 20.3% (+736bps).
| Net Revenue HCRIS | $351.5M |
| Current EBITDA COMPUTED | $45.3M |
| Operating Margin COMPUTED | 12.9% |
| Occupancy HCRIS | 62.1% |
| Revenue / Bed COMPUTED | $2.2M |
| Net-to-Gross HCRIS | 21.3% |
| Distress Probability ML | 45.9% |
2. Market Context & Competitive Position
CO has 108 Medicare-certified hospitals with a median operating margin of -3.6%. The target's margin of 12.9% places it above the state median. Among 33 size-comparable peers (81-324 beds), the median margin is -1.3%. The target performs in line with or above peers.
3. RCM Performance Analysis — Comparable Hospitals
Comps selected by bed count (81-324), prioritizing same-state peers. 33 hospitals in the comp set.
| Hospital | State | Beds | Revenue | Margin |
|---|---|---|---|---|
| CENTURA PARKER ADVENTIST HOSPI (Target) | CO | 162 | $351.5M | 12.9% |
| POUDRE VALLEY HOSPITAL | CO | 218 | $722.4M | 10.8% |
| PRESBYTERIAN ST. LUKES MEDICAL | CO | 287 | $646.0M | 27.6% |
| ST. MARYS HOSPITAL & MEDICAL C | CO | 237 | $554.0M | -11.0% |
| SKY RIDGE MEDICAL CENTER | CO | 273 | $544.7M | 28.9% |
| MEDICAL CENTER OF THE ROCKIES | CO | 180 | $541.1M | 11.6% |
| PARKVIEW MEDICAL CENTER | CO | 253 | $522.9M | 4.1% |
| CENTURA ST ANTHONY HOSPITAL | CO | 220 | $483.2M | 1.2% |
| BOULDER COMMUNITY HOSPITAL | CO | 139 | $418.3M | -1.6% |
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: $25.9M (736bps margin improvement).
| Lever | Current | Target | EBITDA Impact | Margin | Ramp |
|---|---|---|---|---|---|
| Net Collection Rate | 93.5% | 97.0% | $7.4M | +210bp | 18mo |
| Cost to Collect | 4.5% | 2.5% | $7.0M | +200bp | 12mo |
| Denial Rate Reduction | 12.0% | 6.5% | $7.0M | +198bp | 12mo |
| A/R Days Reduction | 5200.0% | 3800.0% | $4.3M | +122bp | 9mo |
| Clean Claim Rate | 88.0% | 96.0% | $225K | +6bp | 6mo |
5. EBITDA Bridge
| Current EBITDA | $45.3M |
| + RCM Uplift | +$25.9M |
| Pro Forma EBITDA | $71.2M |
| Current Margin | 12.9% |
| Pro Forma Margin | 20.3% |
| WC Released (1x) | $13.5M |
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 | $69.7M | $557.7M | 8.00x | 51.6% |
| Base (11x exit) | 10.0x | 11.0x | $69.7M | $636.1M | 9.12x | 55.6% |
| Bull Case | 9.0x | 11.0x | $62.8M | $744.1M | 11.86x | 64.0% |
| Bull (12x exit) | 9.0x | 12.0x | $62.8M | $830.3M | 13.23x | 67.6% |
| Bear Case | 11.0x | 10.0x | $76.7M | $405.7M | 5.29x | 39.5% |
| Bear (11x exit) | 11.0x | 11.0x | $76.7M | $471.2M | 6.14x | 43.8% |
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
- 33 hospitals with 81-324 beds
- Same-state prioritization (n=34)
- Comp margins: P25=-10.6% / P50=-1.3% / P75=8.5%
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.