GOOD SAMARITAN HOSPITAL
1. Target Overview & Investment Thesis
GOOD SAMARITAN HOSPITAL is a 333-bed suburban community hospital in PALM BEACH, FL with $240.4M in net patient revenue and a 5.0% operating margin. The hospital serves a payer mix of 24.0% Medicare, 7.3% Medicaid, and 68.7% commercial.
Thesis: Undervalued. Our ML models identify $17.7M in annual EBITDA improvement potential from RCM optimization across 5 levers, lifting margin from 5.0% to 12.3% (+736bps).
| Net Revenue HCRIS | $240.4M |
| Current EBITDA COMPUTED | $12.0M |
| Operating Margin COMPUTED | 5.0% |
| Occupancy HCRIS | 39.1% |
| Revenue / Bed COMPUTED | $722K |
| Net-to-Gross HCRIS | 8.5% |
| Distress Probability ML | 50.4% |
2. Market Context & Competitive Position
FL has 261 Medicare-certified hospitals with a median operating margin of 3.2%. The target's margin of 5.0% places it above the state median. Among 102 size-comparable peers (166-666 beds), the median margin is 5.5%. The target's below-peer margin suggests operational improvement opportunity.
3. RCM Performance Analysis — Comparable Hospitals
Comps selected by bed count (166-666), prioritizing same-state peers. 102 hospitals in the comp set.
| Hospital | State | Beds | Revenue | Margin |
|---|---|---|---|---|
| GOOD SAMARITAN HOSPITAL (Target) | FL | 333 | $240.4M | 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: $17.7M (736bps margin improvement).
| Lever | Current | Target | EBITDA Impact | Margin | Ramp |
|---|---|---|---|---|---|
| Net Collection Rate | 93.5% | 97.0% | $5.0M | +210bp | 18mo |
| Cost to Collect | 4.5% | 2.5% | $4.8M | +200bp | 12mo |
| Denial Rate Reduction | 12.0% | 6.5% | $4.8M | +198bp | 12mo |
| A/R Days Reduction | 5200.0% | 3800.0% | $2.9M | +122bp | 9mo |
| Clean Claim Rate | 88.0% | 96.0% | $154K | +6bp | 6mo |
5. EBITDA Bridge
| Current EBITDA | $12.0M |
| + RCM Uplift | +$17.7M |
| Pro Forma EBITDA | $29.7M |
| Current Margin | 5.0% |
| Pro Forma Margin | 12.3% |
| WC Released (1x) | $9.2M |
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 | $18.4M | $255.8M | 13.90x | 69.3% |
| Base (11x exit) | 10.0x | 11.0x | $18.4M | $287.4M | 15.62x | 73.3% |
| Bull Case | 9.0x | 11.0x | $16.6M | $351.7M | 21.24x | 84.3% |
| Bull (12x exit) | 9.0x | 12.0x | $16.6M | $388.6M | 23.47x | 88.0% |
| Bear Case | 11.0x | 10.0x | $20.2M | $161.4M | 7.97x | 51.5% |
| Bear (11x exit) | 11.0x | 11.0x | $20.2M | $184.1M | 9.10x | 55.5% |
7. Key Risks & Mitigants
| Severity | Risk Factor | Mitigant |
|---|---|---|
| High | Elevated distress probability | Model estimates 50.4% 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
- 102 hospitals with 166-666 beds
- Same-state prioritization (n=103)
- Comp margins: P25=-4.8% / P50=5.5% / 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.