ASCENSION ST. VINCENTS RIVERSIDE
1. Target Overview & Investment Thesis
ASCENSION ST. VINCENTS RIVERSIDE is a 362-bed suburban community hospital in DUVAL, FL with $449.6M in net patient revenue and a -5.0% operating margin. The hospital serves a payer mix of 25.1% Medicare, 2.4% Medicaid, and 72.5% commercial.
Thesis: Undervalued. Our ML models identify $33.1M in annual EBITDA improvement potential from RCM optimization across 5 levers, lifting margin from -5.0% to 2.4% (+736bps).
| Net Revenue HCRIS | $449.6M |
| Current EBITDA COMPUTED | $-22.5M |
| Operating Margin COMPUTED | -5.0% |
| Occupancy HCRIS | 59.6% |
| Revenue / Bed COMPUTED | $1.2M |
| Net-to-Gross HCRIS | 14.8% |
| Distress Probability ML | 44.5% |
2. Market Context & Competitive Position
FL has 261 Medicare-certified hospitals with a median operating margin of 3.2%. The target's margin of -5.0% places it below the state median. Among 95 size-comparable peers (181-724 beds), the median margin is 5.1%. The target's below-peer margin suggests operational improvement opportunity.
3. RCM Performance Analysis — Comparable Hospitals
Comps selected by bed count (181-724), prioritizing same-state peers. 95 hospitals in the comp set.
| Hospital | State | Beds | Revenue | Margin |
|---|---|---|---|---|
| ASCENSION ST. VINCENTS RIVERSI (Target) | FL | 362 | $449.6M | -5.0% |
| UNIVERSITY OF MIAMI HOSP & CLI | FL | 532 | $2.36B | 0.9% |
| MOFFITT CANCER CENTER | FL | 218 | $1.91B | 16.0% |
| MAYO CLINIC FLORIDA | FL | 304 | $1.09B | 21.6% |
| ASCENSION SACRED HEART PENSACO | FL | 559 | $1.04B | -10.0% |
| MOUNT SINAI MEDICAL CENTER OF | FL | 481 | $904.2M | 12.2% |
| TALLAHASSEE MEMORIAL HOSPITAL | FL | 483 | $871.6M | -4.8% |
| SHANDS JACKSONVILLE MEDICAL CE | FL | 481 | $861.4M | -7.1% |
| MORTON PLANT HOSPITAL | FL | 561 | $773.1M | 7.7% |
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: $33.1M (736bps margin improvement).
| Lever | Current | Target | EBITDA Impact | Margin | Ramp |
|---|---|---|---|---|---|
| Net Collection Rate | 93.5% | 97.0% | $9.4M | +210bp | 18mo |
| Cost to Collect | 4.5% | 2.5% | $9.0M | +200bp | 12mo |
| Denial Rate Reduction | 12.0% | 6.5% | $8.9M | +198bp | 12mo |
| A/R Days Reduction | 5200.0% | 3800.0% | $5.5M | +122bp | 9mo |
| Clean Claim Rate | 88.0% | 96.0% | $288K | +6bp | 6mo |
5. EBITDA Bridge
| Current EBITDA | $-22.5M |
| + RCM Uplift | +$33.1M |
| Pro Forma EBITDA | $10.6M |
| Current Margin | -5.0% |
| Pro Forma Margin | 2.4% |
| WC Released (1x) | $17.2M |
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 | $-34.6M | $182.6M | 0.00x | -100.0% |
| Base (11x exit) | 10.0x | 11.0x | $-34.6M | $189.7M | 0.00x | -100.0% |
| Bull Case | 9.0x | 11.0x | $-31.1M | $287.6M | 0.00x | -100.0% |
| Bull (12x exit) | 9.0x | 12.0x | $-31.1M | $304.6M | 0.00x | -100.0% |
| Bear Case | 11.0x | 10.0x | $-38.0M | $28.4M | 0.00x | -100.0% |
| Bear (11x exit) | 11.0x | 11.0x | $-38.0M | $18.9M | 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 |
| Low | Low net-to-gross ratio | Large contractual allowances suggest pricing discipline issues. Mitigant: payer renegotiation is an additional upside lever |
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
- 95 hospitals with 181-724 beds
- Same-state prioritization (n=96)
- Comp margins: P25=-4.6% / P50=5.1% / P75=19.6%
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.