ADVENTHEALTH MURRAY
1. Target Overview & Investment Thesis
ADVENTHEALTH MURRAY is a 29-bed suburban community hospital in MURRAY, GA with $39.3M in net patient revenue and a 0.8% operating margin. The hospital serves a payer mix of 35.8% Medicare, 7.0% Medicaid, and 57.3% commercial.
Thesis: Turnaround. Our ML models identify $2.9M in annual EBITDA improvement potential from RCM optimization across 5 levers, lifting margin from 0.8% to 8.1% (+736bps).
| Net Revenue HCRIS | $39.3M |
| Current EBITDA COMPUTED | $297K |
| Operating Margin COMPUTED | 0.8% |
| Occupancy HCRIS | 26.4% |
| Revenue / Bed COMPUTED | $1.4M |
| Net-to-Gross HCRIS | 17.8% |
| Distress Probability ML | 52.8% |
2. Market Context & Competitive Position
GA has 165 Medicare-certified hospitals with a median operating margin of -2.8%. The target's margin of 0.8% places it above the state median. Among 75 size-comparable peers (14-58 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 (14-58), prioritizing same-state peers. 75 hospitals in the comp set.
| Hospital | State | Beds | Revenue | Margin |
|---|---|---|---|---|
| ADVENTHEALTH MURRAY (Target) | GA | 29 | $39.3M | 0.8% |
| TANNER MEDICAL CENTER-VILLA RI | GA | 58 | $289.8M | 33.3% |
| KENNESTONE HOSPITAL AT WINDY H | GA | 55 | $160.5M | 0.7% |
| PIEDMONT MOUNTAINSIDE HOSPITAL | GA | 52 | $131.2M | 10.5% |
| UNION GENERAL HOSPITAL | GA | 39 | $108.6M | 2.4% |
| TATTNALL HOSPITAL COMPANY LLC | GA | 25 | $101.7M | 41.9% |
| PHOEBE SUMTER MEDICAL CENTER | GA | 54 | $101.0M | -1.6% |
| MEADOWS REGIONAL MEDICAL CENTE | GA | 57 | $91.8M | -18.8% |
| MILLER COUNTY HOSPITAL | GA | 25 | $81.6M | -1.1% |
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: $2.9M (736bps margin improvement).
| Lever | Current | Target | EBITDA Impact | Margin | Ramp |
|---|---|---|---|---|---|
| Net Collection Rate | 93.5% | 97.0% | $825K | +210bp | 18mo |
| Cost to Collect | 4.5% | 2.5% | $786K | +200bp | 12mo |
| Denial Rate Reduction | 12.0% | 6.5% | $778K | +198bp | 12mo |
| A/R Days Reduction | 5200.0% | 3800.0% | $478K | +122bp | 9mo |
| Clean Claim Rate | 88.0% | 96.0% | $25K | +6bp | 6mo |
5. EBITDA Bridge
| Current EBITDA | $297K |
| + RCM Uplift | +$2.9M |
| Pro Forma EBITDA | $3.2M |
| Current Margin | 0.8% |
| Pro Forma Margin | 8.1% |
| WC Released (1x) | $1.5M |
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 | $456K | $30.9M | 67.64x | 132.3% |
| Base (11x exit) | 10.0x | 11.0x | $456K | $34.1M | 74.73x | 137.0% |
| Bull Case | 9.0x | 11.0x | $411K | $43.8M | 106.63x | 154.4% |
| Bull (12x exit) | 9.0x | 12.0x | $411K | $47.9M | 116.62x | 159.0% |
| Bear Case | 11.0x | 10.0x | $502K | $16.3M | 32.40x | 100.5% |
| Bear (11x exit) | 11.0x | 11.0x | $502K | $18.1M | 35.97x | 104.7% |
7. Key Risks & Mitigants
| Severity | Risk Factor | Mitigant |
|---|---|---|
| Medium | Low occupancy | At 26.4%, 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 52.8% 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
- 75 hospitals with 14-58 beds
- Same-state prioritization (n=76)
- Comp margins: P25=-20.1% / P50=-3.8% / P75=5.5%
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.