HCA FLORIDA BRANDON HOSPITAL
1. Target Overview & Investment Thesis
HCA FLORIDA BRANDON HOSPITAL is a 403-bed suburban community hospital in HILLSBOROUGH, FL with $480.9M in net patient revenue and a 34.8% operating margin. The hospital serves a payer mix of 16.9% Medicare, 3.9% Medicaid, and 79.1% commercial.
Thesis: Platform Growth. Our ML models identify $35.4M in annual EBITDA improvement potential from RCM optimization across 5 levers, lifting margin from 34.8% to 42.1% (+736bps).
| Net Revenue HCRIS | $480.9M |
| Current EBITDA COMPUTED | $167.2M |
| Operating Margin COMPUTED | 34.8% |
| Occupancy HCRIS | 63.2% |
| Revenue / Bed COMPUTED | $1.2M |
| Net-to-Gross HCRIS | 8.9% |
| Distress Probability ML | 43.3% |
2. Market Context & Competitive Position
FL has 261 Medicare-certified hospitals with a median operating margin of 3.2%. The target's margin of 34.8% places it above the state median. Among 91 size-comparable peers (202-806 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 (202-806), prioritizing same-state peers. 91 hospitals in the comp set.
| Hospital | State | Beds | Revenue | Margin |
|---|---|---|---|---|
| HCA FLORIDA BRANDON HOSPITAL (Target) | FL | 403 | $480.9M | 34.8% |
| UNIVERSITY OF MIAMI HOSP & CLI | FL | 532 | $2.36B | 0.9% |
| MOFFITT CANCER CENTER | FL | 218 | $1.91B | 16.0% |
| LEE MEMORIAL HOSPITAL | FL | 748 | $1.28B | 17.4% |
| SARASOTA MEMORIAL HOSPITAL | FL | 787 | $1.10B | 8.1% |
| MAYO CLINIC FLORIDA | FL | 304 | $1.09B | 21.6% |
| ASCENSION SACRED HEART PENSACO | FL | 559 | $1.04B | -10.0% |
| LAKELAND REGIONAL MED CTR | FL | 764 | $928.0M | 4.2% |
| MOUNT SINAI MEDICAL CENTER OF | FL | 481 | $904.2M | 12.2% |
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: $35.4M (736bps margin improvement).
| Lever | Current | Target | EBITDA Impact | Margin | Ramp |
|---|---|---|---|---|---|
| Net Collection Rate | 93.5% | 97.0% | $10.1M | +210bp | 18mo |
| Cost to Collect | 4.5% | 2.5% | $9.6M | +200bp | 12mo |
| Denial Rate Reduction | 12.0% | 6.5% | $9.5M | +198bp | 12mo |
| A/R Days Reduction | 5200.0% | 3800.0% | $5.9M | +122bp | 9mo |
| Clean Claim Rate | 88.0% | 96.0% | $308K | +6bp | 6mo |
5. EBITDA Bridge
| Current EBITDA | $167.2M |
| + RCM Uplift | +$35.4M |
| Pro Forma EBITDA | $202.6M |
| Current Margin | 34.8% |
| Pro Forma Margin | 42.1% |
| WC Released (1x) | $18.4M |
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 | $257.2M | $1.46B | 5.66x | 41.5% |
| Base (11x exit) | 10.0x | 11.0x | $257.2M | $1.69B | 6.55x | 45.6% |
| Bull Case | 9.0x | 11.0x | $231.5M | $1.89B | 8.15x | 52.1% |
| Bull (12x exit) | 9.0x | 12.0x | $231.5M | $2.13B | 9.18x | 55.8% |
| Bear Case | 11.0x | 10.0x | $283.0M | $1.20B | 4.23x | 33.4% |
| Bear (11x exit) | 11.0x | 11.0x | $283.0M | $1.41B | 4.98x | 37.8% |
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
- 91 hospitals with 202-806 beds
- Same-state prioritization (n=92)
- Comp margins: P25=-4.8% / P50=4.1% / P75=17.1%
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.