SSH - DAYTONA BEACH
1. Target Overview & Investment Thesis
SSH - DAYTONA BEACH is a 34-bed community hospital in VOLUSIA, FL with $21.2M in net patient revenue and a 15.5% operating margin. The hospital serves a payer mix of 38.8% Medicare, 0.0% Medicaid, and 61.2% commercial.
Thesis: Turnaround. Our ML models identify $1.6M in annual EBITDA improvement potential from RCM optimization across 5 levers, lifting margin from 15.5% to 22.9% (+736bps).
| Net Revenue HCRIS | $21.2M |
| Current EBITDA COMPUTED | $3.3M |
| Operating Margin COMPUTED | 15.5% |
| Occupancy HCRIS | 91.4% |
| Revenue / Bed COMPUTED | $624K |
| Net-to-Gross HCRIS | 15.0% |
| Distress Probability ML | nan% |
2. Market Context & Competitive Position
FL has 261 Medicare-certified hospitals with a median operating margin of 3.2%. The target's margin of 15.5% places it above the state median. Among 61 size-comparable peers (17-68 beds), the median margin is -1.9%. The target performs in line with or above peers.
3. RCM Performance Analysis — Comparable Hospitals
Comps selected by bed count (17-68), prioritizing same-state peers. 61 hospitals in the comp set.
| Hospital | State | Beds | Revenue | Margin |
|---|---|---|---|---|
| SSH - DAYTONA BEACH (Target) | FL | 34 | $21.2M | 15.5% |
| GULF BREEZE HOSPITAL | FL | 65 | $121.8M | 12.8% |
| OVIEDO MEDICAL CENTER | FL | 64 | $110.9M | 7.4% |
| BAPTIST MEDICAL CTR-NASSAU | FL | 54 | $85.1M | 2.1% |
| UCF LAKE NONA HOSPITAL | FL | 64 | $80.3M | 1.8% |
| JACKSON HOSPITAL MARIANNA | FL | 66 | $75.3M | -9.7% |
| TWIN CITIES HOSPITAL | FL | 65 | $73.6M | 39.7% |
| MEDICAL CENTER OF DELTONA | FL | 43 | $45.4M | -30.2% |
| LEHIGH REGIONAL | FL | 53 | $41.3M | 6.6% |
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: $1.6M (736bps margin improvement).
| Lever | Current | Target | EBITDA Impact | Margin | Ramp |
|---|---|---|---|---|---|
| Net Collection Rate | 93.5% | 97.0% | $446K | +210bp | 18mo |
| Cost to Collect | 4.5% | 2.5% | $425K | +200bp | 12mo |
| Denial Rate Reduction | 12.0% | 6.5% | $420K | +198bp | 12mo |
| A/R Days Reduction | 5200.0% | 3800.0% | $258K | +122bp | 9mo |
| Clean Claim Rate | 88.0% | 96.0% | $14K | +6bp | 6mo |
5. EBITDA Bridge
| Current EBITDA | $3.3M |
| + RCM Uplift | +$1.6M |
| Pro Forma EBITDA | $4.9M |
| Current Margin | 15.5% |
| Pro Forma Margin | 22.9% |
| WC Released (1x) | $814K |
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 | $5.1M | $37.4M | 7.37x | 49.1% |
| Base (11x exit) | 10.0x | 11.0x | $5.1M | $42.8M | 8.43x | 53.2% |
| Bull Case | 9.0x | 11.0x | $4.6M | $49.6M | 10.86x | 61.1% |
| Bull (12x exit) | 9.0x | 12.0x | $4.6M | $55.4M | 12.14x | 64.8% |
| Bear Case | 11.0x | 10.0x | $5.6M | $27.9M | 5.00x | 38.0% |
| Bear (11x exit) | 11.0x | 11.0x | $5.6M | $32.5M | 5.83x | 42.3% |
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
- 61 hospitals with 17-68 beds
- Same-state prioritization (n=62)
- Comp margins: P25=-24.2% / P50=-1.9% / P75=7.5%
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.