MEMORIAL SATILLA HEALTH
1. Target Overview & Investment Thesis
MEMORIAL SATILLA HEALTH is a 113-bed suburban community hospital in WARE, GA with $110.8M in net patient revenue and a -5.7% operating margin. The hospital serves a payer mix of 24.5% Medicare, 10.2% Medicaid, and 65.3% commercial.
Thesis: Undervalued. Our ML models identify $8.2M in annual EBITDA improvement potential from RCM optimization across 5 levers, lifting margin from -5.7% to 1.7% (+736bps).
| Net Revenue HCRIS | $110.8M |
| Current EBITDA COMPUTED | $-6.3M |
| Operating Margin COMPUTED | -5.7% |
| Occupancy HCRIS | 60.4% |
| Revenue / Bed COMPUTED | $980K |
| Net-to-Gross HCRIS | 13.1% |
| Distress Probability ML | 45.6% |
2. Market Context & Competitive Position
GA has 165 Medicare-certified hospitals with a median operating margin of -2.8%. The target's margin of -5.7% places it below the state median. Among 56 size-comparable peers (56-226 beds), the median margin is -0.8%. The target's below-peer margin suggests operational improvement opportunity.
3. RCM Performance Analysis — Comparable Hospitals
Comps selected by bed count (56-226), prioritizing same-state peers. 56 hospitals in the comp set.
| Hospital | State | Beds | Revenue | Margin |
|---|---|---|---|---|
| MEMORIAL SATILLA HEALTH (Target) | GA | 113 | $110.8M | -5.7% |
| NORTHSIDE HOSPITAL-CHEROKEE I | GA | 212 | $623.5M | -0.1% |
| TIFT REGIONAL MEDICAL CENTER | GA | 181 | $372.8M | -10.9% |
| PIEDMONT NEWNAN HOSPITAL INC. | GA | 177 | $366.0M | 19.2% |
| SOUTH GEORGIA MEDICAL CENTER | GA | 224 | $359.9M | -16.2% |
| HAMILTON MEDICAL CENTER | GA | 221 | $349.6M | 5.3% |
| NORTH FULTON REGIONAL HOSPITAL | GA | 178 | $320.1M | 6.6% |
| TANNER MEDICAL CENTER | GA | 196 | $307.5M | -42.3% |
| ST. JOSEPHS HOSPITAL INC. | GA | 188 | $300.6M | -15.6% |
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: $8.2M (736bps margin improvement).
| Lever | Current | Target | EBITDA Impact | Margin | Ramp |
|---|---|---|---|---|---|
| Net Collection Rate | 93.5% | 97.0% | $2.3M | +210bp | 18mo |
| Cost to Collect | 4.5% | 2.5% | $2.2M | +200bp | 12mo |
| Denial Rate Reduction | 12.0% | 6.5% | $2.2M | +198bp | 12mo |
| A/R Days Reduction | 5200.0% | 3800.0% | $1.3M | +122bp | 9mo |
| Clean Claim Rate | 88.0% | 96.0% | $71K | +6bp | 6mo |
5. EBITDA Bridge
| Current EBITDA | $-6.3M |
| + RCM Uplift | +$8.2M |
| Pro Forma EBITDA | $1.8M |
| Current Margin | -5.7% |
| Pro Forma Margin | 1.7% |
| WC Released (1x) | $4.2M |
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 | $-9.7M | $39.8M | 0.00x | -100.0% |
| Base (11x exit) | 10.0x | 11.0x | $-9.7M | $40.6M | 0.00x | -100.0% |
| Bull Case | 9.0x | 11.0x | $-8.8M | $64.4M | 0.00x | -100.0% |
| Bull (12x exit) | 9.0x | 12.0x | $-8.8M | $67.7M | 0.00x | -100.0% |
| Bear Case | 11.0x | 10.0x | $-10.7M | $2.2M | 0.00x | -100.0% |
| Bear (11x exit) | 11.0x | 11.0x | $-10.7M | $-1.0M | 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 |
| 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
- 56 hospitals with 56-226 beds
- Same-state prioritization (n=57)
- Comp margins: P25=-11.6% / P50=-0.8% / P75=7.1%
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.