ST. JOSEPHS HOSPITAL
1. Target Overview & Investment Thesis
ST. JOSEPHS HOSPITAL is a 1336-bed large academic medical center in HILLSBOROUGH, FL with $1.56B in net patient revenue and a 8.3% operating margin. The hospital serves a payer mix of 17.9% Medicare, 13.3% Medicaid, and 68.9% commercial.
Thesis: Platform Growth. Our ML models identify $115.1M in annual EBITDA improvement potential from RCM optimization across 5 levers, lifting margin from 8.3% to 15.6% (+736bps).
| Net Revenue HCRIS | $1.56B |
| Current EBITDA COMPUTED | $129.0M |
| Operating Margin COMPUTED | 8.3% |
| Occupancy HCRIS | 56.2% |
| Revenue / Bed COMPUTED | $1.2M |
| Net-to-Gross HCRIS | 24.7% |
| Distress Probability ML | 52.2% |
2. Market Context & Competitive Position
FL has 261 Medicare-certified hospitals with a median operating margin of 3.2%. The target's margin of 8.3% places it above the state median. Among 11 size-comparable peers (668-2672 beds), the median margin is 4.1%. The target performs in line with or above peers.
3. RCM Performance Analysis — Comparable Hospitals
Comps selected by bed count (668-2672), prioritizing same-state peers. 11 hospitals in the comp set.
| Hospital | State | Beds | Revenue | Margin |
|---|---|---|---|---|
| ST. JOSEPHS HOSPITAL (Target) | FL | 1336 | $1.56B | 8.3% |
| ORLANDO HEALTH | FL | 1507 | $2.38B | -20.2% |
| UF HEALTH SHANDS | FL | 994 | $2.24B | 10.4% |
| BAPTIST MEDICAL CENTER | FL | 980 | $1.78B | 0.9% |
| TAMPA GENERAL HOSPITAL | FL | 898 | $1.73B | -9.3% |
| BAPTIST HOSPITAL | FL | 948 | $1.71B | 10.8% |
| JACKSON MEMORIAL | FL | 1893 | $1.47B | -50.0% |
| MEMORIAL REGIONAL HOSPITAL | FL | 838 | $1.45B | -20.7% |
| LEE MEMORIAL HOSPITAL | FL | 748 | $1.28B | 17.4% |
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: $115.1M (736bps margin improvement).
| Lever | Current | Target | EBITDA Impact | Margin | Ramp |
|---|---|---|---|---|---|
| Net Collection Rate | 93.5% | 97.0% | $32.8M | +210bp | 18mo |
| Cost to Collect | 4.5% | 2.5% | $31.3M | +200bp | 12mo |
| Denial Rate Reduction | 12.0% | 6.5% | $31.0M | +198bp | 12mo |
| A/R Days Reduction | 5200.0% | 3800.0% | $19.0M | +122bp | 9mo |
| Clean Claim Rate | 88.0% | 96.0% | $1.0M | +6bp | 6mo |
5. EBITDA Bridge
| Current EBITDA | $129.0M |
| + RCM Uplift | +$115.1M |
| Pro Forma EBITDA | $244.1M |
| Current Margin | 8.3% |
| Pro Forma Margin | 15.6% |
| WC Released (1x) | $60.0M |
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 | $198.5M | $2.00B | 10.08x | 58.8% |
| Base (11x exit) | 10.0x | 11.0x | $198.5M | $2.27B | 11.42x | 62.7% |
| Bull Case | 9.0x | 11.0x | $178.7M | $2.71B | 15.17x | 72.3% |
| Bull (12x exit) | 9.0x | 12.0x | $178.7M | $3.01B | 16.85x | 75.9% |
| Bear Case | 11.0x | 10.0x | $218.4M | $1.36B | 6.24x | 44.2% |
| Bear (11x exit) | 11.0x | 11.0x | $218.4M | $1.57B | 7.19x | 48.4% |
7. Key Risks & Mitigants
| Severity | Risk Factor | Mitigant |
|---|---|---|
| High | Elevated distress probability | Model estimates 52.2% probability of financial distress. Mitigant: distressed entry pricing (7-9x) compensates for risk |
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
- 11 hospitals with 668-2672 beds
- Same-state prioritization (n=12)
- Comp margins: P25=-14.8% / P50=4.1% / P75=9.3%
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.