WEST GEORGIA MEDICAL CENTER
1. Target Overview & Investment Thesis
WEST GEORGIA MEDICAL CENTER is a 276-bed suburban community hospital in TROUP, GA with $263.8M in net patient revenue and a 0.2% operating margin. The hospital serves a payer mix of 21.3% Medicare, 8.4% Medicaid, and 70.3% commercial.
Thesis: Undervalued. Our ML models identify $19.4M in annual EBITDA improvement potential from RCM optimization across 5 levers, lifting margin from 0.2% to 7.6% (+736bps).
| Net Revenue HCRIS | $263.8M |
| Current EBITDA COMPUTED | $606K |
| Operating Margin COMPUTED | 0.2% |
| Occupancy HCRIS | 33.8% |
| Revenue / Bed COMPUTED | $956K |
| Net-to-Gross HCRIS | 18.0% |
| Distress Probability ML | 52.3% |
2. Market Context & Competitive Position
GA has 165 Medicare-certified hospitals with a median operating margin of -2.8%. The target's margin of 0.2% places it above the state median. Among 43 size-comparable peers (138-552 beds), the median margin is -3.8%. The target performs in line with or above peers.
3. RCM Performance Analysis — Comparable Hospitals
Comps selected by bed count (138-552), prioritizing same-state peers. 43 hospitals in the comp set.
| Hospital | State | Beds | Revenue | Margin |
|---|---|---|---|---|
| WEST GEORGIA MEDICAL CENTER (Target) | GA | 276 | $263.8M | 0.2% |
| EMORY UNIVERSITY HOSPITAL MIDT | GA | 548 | $1.37B | -15.4% |
| NORTHSIDE HOSPITAL - GWINNETT | GA | 404 | $1.07B | -2.5% |
| EGLESTON CHILDRENS HOSPITAL AT | GA | 330 | $941.9M | 41.5% |
| SCOTTISH RITE CHILDRENS MEDICA | GA | 319 | $905.6M | 44.8% |
| COBB HOSPITAL AND MEDICAL CENT | GA | 367 | $897.0M | 6.1% |
| AU MEDICAL CENTER INC | GA | 494 | $789.4M | -35.7% |
| NORTHSIDE HOSPITAL FORSYTH | GA | 388 | $690.1M | -1.0% |
| PHOEBE PUTNEY MEMORIAL HOSPITA | GA | 338 | $665.5M | -7.1% |
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: $19.4M (736bps margin improvement).
| Lever | Current | Target | EBITDA Impact | Margin | Ramp |
|---|---|---|---|---|---|
| Net Collection Rate | 93.5% | 97.0% | $5.5M | +210bp | 18mo |
| Cost to Collect | 4.5% | 2.5% | $5.3M | +200bp | 12mo |
| Denial Rate Reduction | 12.0% | 6.5% | $5.2M | +198bp | 12mo |
| A/R Days Reduction | 5200.0% | 3800.0% | $3.2M | +122bp | 9mo |
| Clean Claim Rate | 88.0% | 96.0% | $169K | +6bp | 6mo |
5. EBITDA Bridge
| Current EBITDA | $606K |
| + RCM Uplift | +$19.4M |
| Pro Forma EBITDA | $20.0M |
| Current Margin | 0.2% |
| Pro Forma Margin | 7.6% |
| WC Released (1x) | $10.1M |
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 | $933K | $198.2M | 212.50x | 192.1% |
| Base (11x exit) | 10.0x | 11.0x | $933K | $218.3M | 234.07x | 197.8% |
| Bull Case | 9.0x | 11.0x | $839K | $282.7M | 336.78x | 220.2% |
| Bull (12x exit) | 9.0x | 12.0x | $839K | $308.7M | 367.70x | 225.9% |
| Bear Case | 11.0x | 10.0x | $1.0M | $100.8M | 98.24x | 150.3% |
| Bear (11x exit) | 11.0x | 11.0x | $1.0M | $111.2M | 108.39x | 155.3% |
7. Key Risks & Mitigants
| Severity | Risk Factor | Mitigant |
|---|---|---|
| Medium | Low occupancy | At 33.8%, 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 52.3% 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
- 43 hospitals with 138-552 beds
- Same-state prioritization (n=44)
- Comp margins: P25=-14.7% / P50=-3.8% / P75=6.4%
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.