HCA FLORIDA LAKE CITY HOSPITAL
1. Target Overview & Investment Thesis
HCA FLORIDA LAKE CITY HOSPITAL is a 113-bed suburban community hospital in COLUMBIA, FL with $168.8M in net patient revenue and a 34.4% operating margin. The hospital serves a payer mix of 37.3% Medicare, 1.8% Medicaid, and 60.9% commercial.
Thesis: Turnaround. Our ML models identify $12.4M in annual EBITDA improvement potential from RCM optimization across 5 levers, lifting margin from 34.4% to 41.8% (+736bps).
| Net Revenue HCRIS | $168.8M |
| Current EBITDA COMPUTED | $58.1M |
| Operating Margin COMPUTED | 34.4% |
| Occupancy HCRIS | 80.7% |
| Revenue / Bed COMPUTED | $1.5M |
| Net-to-Gross HCRIS | 10.0% |
| Distress Probability ML | 38.4% |
2. Market Context & Competitive Position
FL has 261 Medicare-certified hospitals with a median operating margin of 3.2%. The target's margin of 34.4% places it above the state median. Among 118 size-comparable peers (56-226 beds), the median margin is 4.8%. The target performs in line with or above peers.
3. RCM Performance Analysis — Comparable Hospitals
Comps selected by bed count (56-226), prioritizing same-state peers. 118 hospitals in the comp set.
| Hospital | State | Beds | Revenue | Margin |
|---|---|---|---|---|
| HCA FLORIDA LAKE CITY HOSPITAL (Target) | FL | 113 | $168.8M | 34.4% |
| MOFFITT CANCER CENTER | FL | 218 | $1.91B | 16.0% |
| WEST KENDALL BAPTIST HOSPITAL | FL | 127 | $361.6M | 18.5% |
| ADVENTHEALTH WESLEY CHAPEL | FL | 169 | $360.1M | 17.0% |
| ORLANDO HEALTH SOUTH LAKE HOSP | FL | 167 | $331.8M | 7.2% |
| ADVENTHEALTH PALM COAST | FL | 99 | $285.7M | 8.1% |
| ADVENTHEALTH SEBRING | FL | 204 | $279.7M | -3.1% |
| HOMESTEAD HOSPITAL | FL | 159 | $270.4M | -11.1% |
| NEMOURS CHILDRENS HOSPITAL | FL | 130 | $268.7M | -10.2% |
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: $12.4M (736bps margin improvement).
| Lever | Current | Target | EBITDA Impact | Margin | Ramp |
|---|---|---|---|---|---|
| Net Collection Rate | 93.5% | 97.0% | $3.5M | +210bp | 18mo |
| Cost to Collect | 4.5% | 2.5% | $3.4M | +200bp | 12mo |
| Denial Rate Reduction | 12.0% | 6.5% | $3.3M | +198bp | 12mo |
| A/R Days Reduction | 5200.0% | 3800.0% | $2.1M | +122bp | 9mo |
| Clean Claim Rate | 88.0% | 96.0% | $108K | +6bp | 6mo |
5. EBITDA Bridge
| Current EBITDA | $58.1M |
| + RCM Uplift | +$12.4M |
| Pro Forma EBITDA | $70.6M |
| Current Margin | 34.4% |
| Pro Forma Margin | 41.8% |
| WC Released (1x) | $6.5M |
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 | $89.4M | $507.7M | 5.68x | 41.5% |
| Base (11x exit) | 10.0x | 11.0x | $89.4M | $587.6M | 6.57x | 45.7% |
| Bull Case | 9.0x | 11.0x | $80.5M | $657.6M | 8.17x | 52.2% |
| Bull (12x exit) | 9.0x | 12.0x | $80.5M | $741.2M | 9.21x | 55.9% |
| Bear Case | 11.0x | 10.0x | $98.4M | $416.6M | 4.23x | 33.5% |
| Bear (11x exit) | 11.0x | 11.0x | $98.4M | $490.2M | 4.98x | 37.9% |
7. Key Risks & Mitigants
| Severity | Risk Factor | Mitigant |
|---|---|---|
| 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
- 118 hospitals with 56-226 beds
- Same-state prioritization (n=119)
- Comp margins: P25=-6.5% / P50=4.8% / P75=14.1%
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.