IRWIN COUNTY HOSPITAL
1. Target Overview & Investment Thesis
IRWIN COUNTY HOSPITAL is a 34-bed under-performing / distressed in IRWIN, GA with $15.1M in net patient revenue and a -26.5% operating margin. The hospital serves a payer mix of 5.2% Medicare, 13.8% Medicaid, and 81.0% commercial.
Thesis: Turnaround. Our ML models identify $1.1M in annual EBITDA improvement potential from RCM optimization across 5 levers, lifting margin from -26.5% to -19.1% (+736bps).
| Net Revenue HCRIS | $15.1M |
| Current EBITDA COMPUTED | $-4.0M |
| Operating Margin COMPUTED | -26.5% |
| Occupancy HCRIS | 17.8% |
| Revenue / Bed COMPUTED | $443K |
| Net-to-Gross HCRIS | 33.2% |
| Distress Probability ML | 58.2% |
2. Market Context & Competitive Position
GA has 165 Medicare-certified hospitals with a median operating margin of -2.8%. The target's margin of -26.5% places it below the state median. Among 76 size-comparable peers (17-68 beds), the median margin is -3.4%. The target's below-peer margin suggests operational improvement opportunity.
3. RCM Performance Analysis — Comparable Hospitals
Comps selected by bed count (17-68), prioritizing same-state peers. 76 hospitals in the comp set.
| Hospital | State | Beds | Revenue | Margin |
|---|---|---|---|---|
| IRWIN COUNTY HOSPITAL (Target) | GA | 34 | $15.1M | -26.5% |
| 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% |
| 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% |
| PHOEBE SUMTER MEDICAL CENTER | GA | 54 | $101.0M | -1.6% |
| MEADOWS REGIONAL MEDICAL CENTE | GA | 57 | $91.8M | -18.8% |
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 (736bps margin improvement).
| Lever | Current | Target | EBITDA Impact | Margin | Ramp |
|---|---|---|---|---|---|
| Net Collection Rate | 93.5% | 97.0% | $317K | +210bp | 18mo |
| Cost to Collect | 4.5% | 2.5% | $301K | +200bp | 12mo |
| Denial Rate Reduction | 12.0% | 6.5% | $298K | +198bp | 12mo |
| A/R Days Reduction | 5200.0% | 3800.0% | $183K | +122bp | 9mo |
| Clean Claim Rate | 88.0% | 96.0% | $10K | +6bp | 6mo |
5. EBITDA Bridge
| Current EBITDA | $-4.0M |
| + RCM Uplift | +$1.1M |
| Pro Forma EBITDA | $-2.9M |
| Current Margin | -26.5% |
| Pro Forma Margin | -19.1% |
| WC Released (1x) | $578K |
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 | $-6.1M | $-15.2M | 0.00x | -100.0% |
| Base (11x exit) | 10.0x | 11.0x | $-6.1M | $-18.8M | 0.00x | -100.0% |
| Bull Case | 9.0x | 11.0x | $-5.5M | $-17.1M | 0.00x | -100.0% |
| Bull (12x exit) | 9.0x | 12.0x | $-5.5M | $-20.3M | 0.00x | -100.0% |
| Bear Case | 11.0x | 10.0x | $-6.8M | $-18.8M | 0.00x | -100.0% |
| Bear (11x exit) | 11.0x | 11.0x | $-6.8M | $-22.9M | 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 17.8%, 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 58.2% 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
- 76 hospitals with 17-68 beds
- Same-state prioritization (n=77)
- Comp margins: P25=-18.5% / P50=-3.4% / P75=5.9%
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.