JEFFERSON HOSPITAL
1. Target Overview & Investment Thesis
JEFFERSON HOSPITAL is a 37-bed under-performing / distressed in JEFFERSON, GA with $14.4M in net patient revenue and a -36.4% operating margin. The hospital serves a payer mix of 38.5% Medicare, 3.9% Medicaid, and 57.6% commercial.
Thesis: Turnaround. Our ML models identify $1.1M in annual EBITDA improvement potential from RCM optimization across 5 levers, lifting margin from -36.4% to -29.0% (+737bps).
| Net Revenue HCRIS | $14.4M |
| Current EBITDA COMPUTED | $-5.2M |
| Operating Margin COMPUTED | -36.4% |
| Occupancy HCRIS | 10.0% |
| Revenue / Bed COMPUTED | $390K |
| Net-to-Gross HCRIS | 41.0% |
| Distress Probability ML | 59.9% |
2. Market Context & Competitive Position
GA has 165 Medicare-certified hospitals with a median operating margin of -2.8%. The target's margin of -36.4% places it below the state median. Among 81 size-comparable peers (18-74 beds), the median margin is -3.3%. The target's below-peer margin suggests operational improvement opportunity.
3. RCM Performance Analysis — Comparable Hospitals
Comps selected by bed count (18-74), prioritizing same-state peers. 81 hospitals in the comp set.
| Hospital | State | Beds | Revenue | Margin |
|---|---|---|---|---|
| JEFFERSON HOSPITAL (Target) | GA | 37 | $14.4M | -36.4% |
| TANNER MEDICAL CENTER-VILLA RI | GA | 58 | $289.8M | 33.3% |
| ADVENTHEALTH GORDON | GA | 69 | $188.5M | -3.4% |
| KENNESTONE HOSPITAL AT WINDY H | GA | 55 | $160.5M | 0.7% |
| PIEDMONT COLUMBUS REGIONAL NOR | GA | 71 | $135.5M | 21.7% |
| PIEDMONT MOUNTAINSIDE HOSPITAL | GA | 52 | $131.2M | 10.5% |
| CRISP REGIONAL HOSPITAL INC. | GA | 65 | $115.2M | -8.7% |
| UNION GENERAL HOSPITAL | GA | 39 | $108.6M | 2.4% |
| TATTNALL HOSPITAL COMPANY LLC | GA | 25 | $101.7M | 41.9% |
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: $1.1M (737bps margin improvement).
| Lever | Current | Target | EBITDA Impact | Margin | Ramp |
|---|---|---|---|---|---|
| Net Collection Rate | 93.5% | 97.0% | $303K | +210bp | 18mo |
| Cost to Collect | 4.5% | 2.5% | $288K | +200bp | 12mo |
| Denial Rate Reduction | 12.0% | 6.5% | $286K | +198bp | 12mo |
| A/R Days Reduction | 5200.0% | 3800.0% | $175K | +122bp | 9mo |
| Clean Claim Rate | 88.0% | 96.0% | $10K | +7bp | 6mo |
5. EBITDA Bridge
| Current EBITDA | $-5.2M |
| + RCM Uplift | +$1.1M |
| Pro Forma EBITDA | $-4.2M |
| Current Margin | -36.4% |
| Pro Forma Margin | -29.0% |
| WC Released (1x) | $553K |
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 | $-8.1M | $-24.0M | 0.00x | -100.0% |
| Base (11x exit) | 10.0x | 11.0x | $-8.1M | $-29.0M | 0.00x | -100.0% |
| Bull Case | 9.0x | 11.0x | $-7.3M | $-28.1M | 0.00x | -100.0% |
| Bull (12x exit) | 9.0x | 12.0x | $-7.3M | $-32.8M | 0.00x | -100.0% |
| Bear Case | 11.0x | 10.0x | $-8.9M | $-26.7M | 0.00x | -100.0% |
| Bear (11x exit) | 11.0x | 11.0x | $-8.9M | $-32.2M | 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 |
| Medium | Low occupancy | At 10.0%, 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 59.9% probability of financial distress. Mitigant: distressed entry pricing (7-9x) compensates for risk |
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
- 81 hospitals with 18-74 beds
- Same-state prioritization (n=82)
- Comp margins: P25=-17.1% / P50=-3.3% / 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.