WAYNE MEMORIAL HOSPITAL
1. Target Overview & Investment Thesis
WAYNE MEMORIAL HOSPITAL is a 88-bed suburban community hospital in WAYNE, GA with $79.9M in net patient revenue and a 1.7% operating margin. The hospital serves a payer mix of 22.1% Medicare, 5.9% Medicaid, and 72.0% commercial.
Thesis: Turnaround. Our ML models identify $5.9M in annual EBITDA improvement potential from RCM optimization across 5 levers, lifting margin from 1.7% to 9.1% (+736bps).
| Net Revenue HCRIS | $79.9M |
| Current EBITDA COMPUTED | $1.4M |
| Operating Margin COMPUTED | 1.7% |
| Occupancy HCRIS | 35.3% |
| Revenue / Bed COMPUTED | $909K |
| Net-to-Gross HCRIS | 26.1% |
| Distress Probability ML | 51.7% |
2. Market Context & Competitive Position
GA has 165 Medicare-certified hospitals with a median operating margin of -2.8%. The target's margin of 1.7% places it above the state median. Among 62 size-comparable peers (44-176 beds), the median margin is -1.0%. The target performs in line with or above peers.
3. RCM Performance Analysis — Comparable Hospitals
Comps selected by bed count (44-176), prioritizing same-state peers. 62 hospitals in the comp set.
| Hospital | State | Beds | Revenue | Margin |
|---|---|---|---|---|
| WAYNE MEMORIAL HOSPITAL (Target) | GA | 88 | $79.9M | 1.7% |
| TANNER MEDICAL CENTER-VILLA RI | GA | 58 | $289.8M | 33.3% |
| PAULDING MEDICAL CENTER | GA | 112 | $288.5M | 9.0% |
| EMORY JOHNS CREEK HOSPITAL | GA | 154 | $269.1M | 3.5% |
| SHEPHERD CENTER | GA | 130 | $254.9M | -20.8% |
| ST MARYS HEALTH CARE SYSTEM I | GA | 161 | $247.9M | 3.2% |
| PIEDMONT ROCKDALE HOSPITAL | GA | 141 | $217.4M | -4.1% |
| DOUGLAS HOSPITAL | GA | 112 | $217.2M | -0.8% |
| NORTHSIDE HOSPITAL - DULUTH | GA | 87 | $193.2M | -3.1% |
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: $5.9M (736bps margin improvement).
| Lever | Current | Target | EBITDA Impact | Margin | Ramp |
|---|---|---|---|---|---|
| Net Collection Rate | 93.5% | 97.0% | $1.7M | +210bp | 18mo |
| Cost to Collect | 4.5% | 2.5% | $1.6M | +200bp | 12mo |
| Denial Rate Reduction | 12.0% | 6.5% | $1.6M | +198bp | 12mo |
| A/R Days Reduction | 5200.0% | 3800.0% | $973K | +122bp | 9mo |
| Clean Claim Rate | 88.0% | 96.0% | $51K | +6bp | 6mo |
5. EBITDA Bridge
| Current EBITDA | $1.4M |
| + RCM Uplift | +$5.9M |
| Pro Forma EBITDA | $7.2M |
| Current Margin | 1.7% |
| Pro Forma Margin | 9.1% |
| WC Released (1x) | $3.1M |
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 | $2.1M | $67.8M | 32.34x | 100.4% |
| Base (11x exit) | 10.0x | 11.0x | $2.1M | $75.3M | 35.90x | 104.7% |
| Bull Case | 9.0x | 11.0x | $1.9M | $95.4M | 50.54x | 119.1% |
| Bull (12x exit) | 9.0x | 12.0x | $1.9M | $104.6M | 55.43x | 123.2% |
| Bear Case | 11.0x | 10.0x | $2.3M | $37.7M | 16.35x | 74.9% |
| Bear (11x exit) | 11.0x | 11.0x | $2.3M | $42.3M | 18.31x | 78.9% |
7. Key Risks & Mitigants
| Severity | Risk Factor | Mitigant |
|---|---|---|
| High | Elevated distress probability | Model estimates 51.7% 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
- 62 hospitals with 44-176 beds
- Same-state prioritization (n=63)
- Comp margins: P25=-12.1% / P50=-1.0% / P75=8.9%
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.