ANIMAS SURGICAL HOSPITAL
1. Target Overview & Investment Thesis
ANIMAS SURGICAL HOSPITAL is a 12-bed suburban community hospital in LA PLATA, CO with $47.4M in net patient revenue and a 13.7% operating margin. The hospital serves a payer mix of 20.6% Medicare, 1.5% Medicaid, and 77.9% commercial.
Thesis: Turnaround. Our ML models identify $3.5M in annual EBITDA improvement potential from RCM optimization across 5 levers, lifting margin from 13.7% to 21.0% (+736bps).
| Net Revenue HCRIS | $47.4M |
| Current EBITDA COMPUTED | $6.5M |
| Operating Margin COMPUTED | 13.7% |
| Occupancy HCRIS | 26.5% |
| Revenue / Bed COMPUTED | $4.0M |
| Net-to-Gross HCRIS | 27.9% |
| Distress Probability ML | 48.0% |
2. Market Context & Competitive Position
CO has 108 Medicare-certified hospitals with a median operating margin of -3.6%. The target's margin of 13.7% places it above the state median. Among 21 size-comparable peers (6-24 beds), the median margin is -7.9%. The target performs in line with or above peers.
3. RCM Performance Analysis — Comparable Hospitals
Comps selected by bed count (6-24), prioritizing same-state peers. 21 hospitals in the comp set.
| Hospital | State | Beds | Revenue | Margin |
|---|---|---|---|---|
| ANIMAS SURGICAL HOSPITAL (Target) | CO | 12 | $47.4M | 13.7% |
| NATIONAL JEWISH HEALTH | CO | 13 | $150.4M | -50.0% |
| SOUTHWEST MEMORIAL HOSPITAL | CO | 23 | $74.6M | -4.5% |
| GUNNISON VALLEY HOSPITAL | CO | 20 | $63.3M | 2.8% |
| UCHEALTH BROOMFIELD HOSPITAL | CO | 20 | $60.3M | -8.5% |
| KREMMLING MEMORIAL HOSPITAL DI | CO | 22 | $50.0M | 0.6% |
| PIONEERS MEDICAL CENTER | CO | 16 | $43.9M | -5.9% |
| UCHEALTH GRANDVIEW HOSPITAL | CO | 22 | $43.5M | -13.2% |
| ARKANSAS VALLEY REGL MED CTR | CO | 20 | $37.1M | -5.1% |
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: $3.5M (736bps margin improvement).
| Lever | Current | Target | EBITDA Impact | Margin | Ramp |
|---|---|---|---|---|---|
| Net Collection Rate | 93.5% | 97.0% | $996K | +210bp | 18mo |
| Cost to Collect | 4.5% | 2.5% | $949K | +200bp | 12mo |
| Denial Rate Reduction | 12.0% | 6.5% | $939K | +198bp | 12mo |
| A/R Days Reduction | 5200.0% | 3800.0% | $577K | +122bp | 9mo |
| Clean Claim Rate | 88.0% | 96.0% | $30K | +6bp | 6mo |
5. EBITDA Bridge
| Current EBITDA | $6.5M |
| + RCM Uplift | +$3.5M |
| Pro Forma EBITDA | $10.0M |
| Current Margin | 13.7% |
| Pro Forma Margin | 21.0% |
| WC Released (1x) | $1.8M |
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 | $10.0M | $77.7M | 7.79x | 50.7% |
| Base (11x exit) | 10.0x | 11.0x | $10.0M | $88.7M | 8.89x | 54.8% |
| Bull Case | 9.0x | 11.0x | $9.0M | $103.5M | 11.52x | 63.0% |
| Bull (12x exit) | 9.0x | 12.0x | $9.0M | $115.6M | 12.86x | 66.7% |
| Bear Case | 11.0x | 10.0x | $11.0M | $57.0M | 5.19x | 39.0% |
| Bear (11x exit) | 11.0x | 11.0x | $11.0M | $66.3M | 6.04x | 43.3% |
7. Key Risks & Mitigants
| Severity | Risk Factor | Mitigant |
|---|---|---|
| Medium | Low occupancy | At 26.5%, fixed costs are spread over fewer patient days. Mitigant: volume growth is an additional upside lever not modeled in base case |
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
- 21 hospitals with 6-24 beds
- Same-state prioritization (n=24)
- Comp margins: P25=-15.7% / P50=-7.9% / P75=-2.4%
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.