SGHS - BRUNSWICK CAMPUS
1. Target Overview & Investment Thesis
SGHS - BRUNSWICK CAMPUS is a 300-bed suburban community hospital in GLYNN, GA with $313.9M in net patient revenue and a -3.8% operating margin. The hospital serves a payer mix of 31.2% Medicare, 9.0% Medicaid, and 59.8% commercial.
Thesis: Undervalued. Our ML models identify $23.1M in annual EBITDA improvement potential from RCM optimization across 5 levers, lifting margin from -3.8% to 3.6% (+736bps).
| Net Revenue HCRIS | $313.9M |
| Current EBITDA COMPUTED | $-11.8M |
| Operating Margin COMPUTED | -3.8% |
| Occupancy HCRIS | 57.7% |
| Revenue / Bed COMPUTED | $1.0M |
| Net-to-Gross HCRIS | 33.4% |
| Distress Probability ML | 49.0% |
2. Market Context & Competitive Position
GA has 165 Medicare-certified hospitals with a median operating margin of -2.8%. The target's margin of -3.8% places it below the state median. Among 43 size-comparable peers (150-600 beds), the median margin is -2.5%. The target's below-peer margin suggests operational improvement opportunity.
3. RCM Performance Analysis — Comparable Hospitals
Comps selected by bed count (150-600), prioritizing same-state peers. 43 hospitals in the comp set.
| Hospital | State | Beds | Revenue | Margin |
|---|---|---|---|---|
| SGHS - BRUNSWICK CAMPUS (Target) | GA | 300 | $313.9M | -3.8% |
| EMORY UNIVERSITY HOSPITAL MIDT | GA | 548 | $1.37B | -15.4% |
| PIEDMONT HOSPITAL INC. | GA | 569 | $1.32B | 4.0% |
| 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% |
| MEMORIAL HEALTH UNIV MED CENTE | GA | 564 | $708.4M | -1.0% |
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: $23.1M (736bps margin improvement).
| Lever | Current | Target | EBITDA Impact | Margin | Ramp |
|---|---|---|---|---|---|
| Net Collection Rate | 93.5% | 97.0% | $6.6M | +210bp | 18mo |
| Cost to Collect | 4.5% | 2.5% | $6.3M | +200bp | 12mo |
| Denial Rate Reduction | 12.0% | 6.5% | $6.2M | +198bp | 12mo |
| A/R Days Reduction | 5200.0% | 3800.0% | $3.8M | +122bp | 9mo |
| Clean Claim Rate | 88.0% | 96.0% | $201K | +6bp | 6mo |
5. EBITDA Bridge
| Current EBITDA | $-11.8M |
| + RCM Uplift | +$23.1M |
| Pro Forma EBITDA | $11.3M |
| Current Margin | -3.8% |
| Pro Forma Margin | 3.6% |
| WC Released (1x) | $12.0M |
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 | $-18.1M | $153.4M | 0.00x | -100.0% |
| Base (11x exit) | 10.0x | 11.0x | $-18.1M | $162.8M | 0.00x | -100.0% |
| Bull Case | 9.0x | 11.0x | $-16.3M | $233.2M | 0.00x | -100.0% |
| Bull (12x exit) | 9.0x | 12.0x | $-16.3M | $249.6M | 0.00x | -100.0% |
| Bear Case | 11.0x | 10.0x | $-19.9M | $43.7M | 0.00x | -100.0% |
| Bear (11x exit) | 11.0x | 11.0x | $-19.9M | $41.6M | 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 |
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 150-600 beds
- Same-state prioritization (n=44)
- Comp margins: P25=-14.7% / P50=-2.5% / P75=5.7%
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.