WEST KENDALL BAPTIST HOSPITAL
1. Target Overview & Investment Thesis
WEST KENDALL BAPTIST HOSPITAL is a 127-bed suburban community hospital in MIAMI-DADE, FL with $361.6M in net patient revenue and a 18.5% operating margin. The hospital serves a payer mix of 16.6% Medicare, 2.3% Medicaid, and 81.1% commercial.
Thesis: Turnaround. Our ML models identify $26.6M in annual EBITDA improvement potential from RCM optimization across 5 levers, lifting margin from 18.5% to 25.8% (+736bps).
| Net Revenue HCRIS | $361.6M |
| Current EBITDA COMPUTED | $66.8M |
| Operating Margin COMPUTED | 18.5% |
| Occupancy HCRIS | 84.4% |
| Revenue / Bed COMPUTED | $2.8M |
| Net-to-Gross HCRIS | 22.5% |
| Distress Probability ML | 36.4% |
2. Market Context & Competitive Position
FL has 261 Medicare-certified hospitals with a median operating margin of 3.2%. The target's margin of 18.5% places it above the state median. Among 122 size-comparable peers (64-254 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 (64-254), prioritizing same-state peers. 122 hospitals in the comp set.
| Hospital | State | Beds | Revenue | Margin |
|---|---|---|---|---|
| WEST KENDALL BAPTIST HOSPITAL (Target) | FL | 127 | $361.6M | 18.5% |
| MOFFITT CANCER CENTER | FL | 218 | $1.91B | 16.0% |
| LARGO MEDICAL CENTER | FL | 245 | $386.4M | 24.1% |
| HCA FL FT WALTON-DESTIN HOSP | FL | 231 | $361.3M | 38.1% |
| ADVENTHEALTH WESLEY CHAPEL | FL | 169 | $360.1M | 17.0% |
| JUPITER MEDICAL CENTER | FL | 242 | $333.2M | -10.7% |
| ORLANDO HEALTH SOUTH LAKE HOSP | FL | 167 | $331.8M | 7.2% |
| HCA FLORIDA WESTSIDE HOSPITAL | FL | 250 | $317.3M | 34.8% |
| ADVENTHEALTH PALM COAST | FL | 99 | $285.7M | 8.1% |
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: $26.6M (736bps margin improvement).
| Lever | Current | Target | EBITDA Impact | Margin | Ramp |
|---|---|---|---|---|---|
| Net Collection Rate | 93.5% | 97.0% | $7.6M | +210bp | 18mo |
| Cost to Collect | 4.5% | 2.5% | $7.2M | +200bp | 12mo |
| Denial Rate Reduction | 12.0% | 6.5% | $7.2M | +198bp | 12mo |
| A/R Days Reduction | 5200.0% | 3800.0% | $4.4M | +122bp | 9mo |
| Clean Claim Rate | 88.0% | 96.0% | $231K | +6bp | 6mo |
5. EBITDA Bridge
| Current EBITDA | $66.8M |
| + RCM Uplift | +$26.6M |
| Pro Forma EBITDA | $93.4M |
| Current Margin | 18.5% |
| Pro Forma Margin | 25.8% |
| WC Released (1x) | $13.9M |
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 | $102.7M | $706.6M | 6.88x | 47.1% |
| Base (11x exit) | 10.0x | 11.0x | $102.7M | $810.7M | 7.89x | 51.2% |
| Bull Case | 9.0x | 11.0x | $92.5M | $931.9M | 10.08x | 58.7% |
| Bull (12x exit) | 9.0x | 12.0x | $92.5M | $1.04B | 11.29x | 62.4% |
| Bear Case | 11.0x | 10.0x | $113.0M | $540.2M | 4.78x | 36.7% |
| Bear (11x exit) | 11.0x | 11.0x | $113.0M | $630.9M | 5.58x | 41.0% |
7. Key Risks & Mitigants
| Severity | Risk Factor | Mitigant |
|---|---|---|
| Medium | Standard execution risk | RCM improvement requires management buy-in and 12-18 month implementation timeline |
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
- 122 hospitals with 64-254 beds
- Same-state prioritization (n=123)
- Comp margins: P25=-5.5% / P50=4.8% / P75=15.4%
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.