HIALEAH HOSPITAL
1. Target Overview & Investment Thesis
HIALEAH HOSPITAL is a 340-bed suburban community hospital in MIAMI-DADE, FL with $124.6M in net patient revenue and a 6.6% operating margin. The hospital serves a payer mix of 17.2% Medicare, 6.1% Medicaid, and 76.7% commercial.
Thesis: Platform Growth. Our ML models identify $9.2M in annual EBITDA improvement potential from RCM optimization across 5 levers, lifting margin from 6.6% to 13.9% (+736bps).
| Net Revenue HCRIS | $124.6M |
| Current EBITDA COMPUTED | $8.2M |
| Operating Margin COMPUTED | 6.6% |
| Occupancy HCRIS | 23.7% |
| Revenue / Bed COMPUTED | $366K |
| Net-to-Gross HCRIS | 9.8% |
| Distress Probability ML | 54.1% |
2. Market Context & Competitive Position
FL has 261 Medicare-certified hospitals with a median operating margin of 3.2%. The target's margin of 6.6% places it above the state median. Among 98 size-comparable peers (170-680 beds), the median margin is 5.0%. The target performs in line with or above peers.
3. RCM Performance Analysis — Comparable Hospitals
Comps selected by bed count (170-680), prioritizing same-state peers. 98 hospitals in the comp set.
| Hospital | State | Beds | Revenue | Margin |
|---|---|---|---|---|
| HIALEAH HOSPITAL (Target) | FL | 340 | $124.6M | 6.6% |
| 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: $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 | $8.2M |
| + RCM Uplift | +$9.2M |
| Pro Forma EBITDA | $17.3M |
| Current Margin | 6.6% |
| Pro Forma Margin | 13.9% |
| 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 | $12.6M | $145.5M | 11.59x | 63.2% |
| Base (11x exit) | 10.0x | 11.0x | $12.6M | $164.1M | 13.07x | 67.2% |
| Bull Case | 9.0x | 11.0x | $11.3M | $198.5M | 17.57x | 77.4% |
| Bull (12x exit) | 9.0x | 12.0x | $11.3M | $219.9M | 19.46x | 81.1% |
| Bear Case | 11.0x | 10.0x | $13.8M | $95.6M | 6.92x | 47.2% |
| Bear (11x exit) | 11.0x | 11.0x | $13.8M | $109.6M | 7.94x | 51.3% |
7. Key Risks & Mitigants
| Severity | Risk Factor | Mitigant |
|---|---|---|
| Medium | Low occupancy | At 23.7%, fixed costs are spread over fewer patient days. Mitigant: volume growth is an additional upside lever not modeled in base case |
| High | Elevated distress probability | Model estimates 54.1% probability of financial distress. Mitigant: distressed entry pricing (7-9x) compensates for risk |
| 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
- 98 hospitals with 170-680 beds
- Same-state prioritization (n=99)
- Comp margins: P25=-4.8% / P50=5.0% / P75=18.8%
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.