ASCENSION ST. VINCENTS ST. JOHNS COU
1. Target Overview & Investment Thesis
ASCENSION ST. VINCENTS ST. JOHNS COU is a 56-bed under-performing / distressed in ST. JOHNS, FL with $33.6M in net patient revenue and a -30.4% operating margin. The hospital serves a payer mix of 31.9% Medicare, 2.6% Medicaid, and 65.5% commercial.
Thesis: Turnaround. Our ML models identify $2.5M in annual EBITDA improvement potential from RCM optimization across 5 levers, lifting margin from -30.4% to -23.0% (+736bps).
| Net Revenue HCRIS | $33.6M |
| Current EBITDA COMPUTED | $-10.2M |
| Operating Margin COMPUTED | -30.4% |
| Occupancy HCRIS | 28.0% |
| Revenue / Bed COMPUTED | $600K |
| Net-to-Gross HCRIS | 15.8% |
| 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 -30.4% places it below the state median. Among 96 size-comparable peers (28-112 beds), the median margin is 4.3%. The target's below-peer margin suggests operational improvement opportunity.
3. RCM Performance Analysis — Comparable Hospitals
Comps selected by bed count (28-112), prioritizing same-state peers. 96 hospitals in the comp set.
| Hospital | State | Beds | Revenue | Margin |
|---|---|---|---|---|
| ASCENSION ST. VINCENTS ST. JOH (Target) | FL | 56 | $33.6M | -30.4% |
| ADVENTHEALTH PALM COAST | FL | 99 | $285.7M | 8.1% |
| ASCENSION SACRED HEART EMERALD | FL | 80 | $187.9M | 16.1% |
| VIERA HOSPITAL INC | FL | 84 | $162.9M | 16.9% |
| ADVENTHEALTH NEW SMYRNA BEACH | FL | 109 | $152.7M | -6.5% |
| SARASOTA MEMORIAL HOSPITAL VEN | FL | 110 | $134.6M | -29.5% |
| GULF BREEZE HOSPITAL | FL | 65 | $121.8M | 12.8% |
| MELBOURNE REGIONAL MEDICAL CEN | FL | 96 | $120.2M | 7.3% |
| NORTH OKALOOSA MEDICAL CENTER | FL | 110 | $120.0M | 42.3% |
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: $2.5M (736bps margin improvement).
| Lever | Current | Target | EBITDA Impact | Margin | Ramp |
|---|---|---|---|---|---|
| Net Collection Rate | 93.5% | 97.0% | $705K | +210bp | 18mo |
| Cost to Collect | 4.5% | 2.5% | $672K | +200bp | 12mo |
| Denial Rate Reduction | 12.0% | 6.5% | $665K | +198bp | 12mo |
| A/R Days Reduction | 5200.0% | 3800.0% | $409K | +122bp | 9mo |
| Clean Claim Rate | 88.0% | 96.0% | $21K | +6bp | 6mo |
5. EBITDA Bridge
| Current EBITDA | $-10.2M |
| + RCM Uplift | +$2.5M |
| Pro Forma EBITDA | $-7.7M |
| Current Margin | -30.4% |
| Pro Forma Margin | -23.0% |
| WC Released (1x) | $1.3M |
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 | $-15.7M | $-42.6M | 0.00x | -100.0% |
| Base (11x exit) | 10.0x | 11.0x | $-15.7M | $-51.9M | 0.00x | -100.0% |
| Bull Case | 9.0x | 11.0x | $-14.1M | $-48.9M | 0.00x | -100.0% |
| Bull (12x exit) | 9.0x | 12.0x | $-14.1M | $-57.5M | 0.00x | -100.0% |
| Bear Case | 11.0x | 10.0x | $-17.3M | $-49.8M | 0.00x | -100.0% |
| Bear (11x exit) | 11.0x | 11.0x | $-17.3M | $-60.4M | 0.00x | -100.0% |
7. Key Risks & Mitigants
| Severity | Risk Factor | Mitigant |
|---|---|---|
| High | Negative operating margin | RCM uplift bridge shows clear path to profitability; working capital release provides near-term cash cushion |
| Medium | Low occupancy | At 28.0%, fixed costs are spread over fewer patient days. Mitigant: volume growth is an additional upside lever not modeled in base case |
| High | Elevated distress probability | Model estimates 52.2% 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
- 96 hospitals with 28-112 beds
- Same-state prioritization (n=97)
- Comp margins: P25=-10.9% / P50=4.3% / P75=12.5%
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.