COBB HOSPITAL AND MEDICAL CENTER
1. Target Overview & Investment Thesis
COBB HOSPITAL AND MEDICAL CENTER is a 367-bed suburban community hospital in COBB, GA with $897.0M in net patient revenue and a 6.1% operating margin. The hospital serves a payer mix of 16.8% Medicare, 8.8% Medicaid, and 74.3% commercial.
Thesis: Platform Growth. Our ML models identify $66.0M in annual EBITDA improvement potential from RCM optimization across 5 levers, lifting margin from 6.1% to 13.4% (+736bps).
| Net Revenue HCRIS | $897.0M |
| Current EBITDA COMPUTED | $54.6M |
| Operating Margin COMPUTED | 6.1% |
| Occupancy HCRIS | 79.8% |
| Revenue / Bed COMPUTED | $2.4M |
| Net-to-Gross HCRIS | 18.3% |
| Distress Probability ML | 39.8% |
2. Market Context & Competitive Position
GA has 165 Medicare-certified hospitals with a median operating margin of -2.8%. The target's margin of 6.1% places it above the state median. Among 43 size-comparable peers (184-734 beds), the median margin is -2.5%. The target performs in line with or above peers.
3. RCM Performance Analysis — Comparable Hospitals
Comps selected by bed count (184-734), prioritizing same-state peers. 43 hospitals in the comp set.
| Hospital | State | Beds | Revenue | Margin |
|---|---|---|---|---|
| COBB HOSPITAL AND MEDICAL CENT (Target) | GA | 367 | $897.0M | 6.1% |
| NORTHSIDE HOSPITAL | GA | 719 | $2.58B | -7.9% |
| NORTHEAST GEORGIA MEDICAL CENT | GA | 645 | $1.55B | 4.4% |
| KENNESTONE HOSPITAL | GA | 642 | $1.50B | 15.3% |
| EMORY UNIVERSITY HOSPITAL | GA | 639 | $1.42B | 5.4% |
| EMORY UNIVERSITY HOSPITAL MIDT | GA | 548 | $1.37B | -15.4% |
| PIEDMONT HOSPITAL INC. | GA | 569 | $1.32B | 4.0% |
| GRADY MEMORIAL HOSPITAL | GA | 694 | $1.19B | -39.6% |
| NORTHSIDE HOSPITAL - GWINNETT | GA | 404 | $1.07B | -2.5% |
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: $66.0M (736bps margin improvement).
| Lever | Current | Target | EBITDA Impact | Margin | Ramp |
|---|---|---|---|---|---|
| Net Collection Rate | 93.5% | 97.0% | $18.8M | +210bp | 18mo |
| Cost to Collect | 4.5% | 2.5% | $17.9M | +200bp | 12mo |
| Denial Rate Reduction | 12.0% | 6.5% | $17.8M | +198bp | 12mo |
| A/R Days Reduction | 5200.0% | 3800.0% | $10.9M | +122bp | 9mo |
| Clean Claim Rate | 88.0% | 96.0% | $574K | +6bp | 6mo |
5. EBITDA Bridge
| Current EBITDA | $54.6M |
| + RCM Uplift | +$66.0M |
| Pro Forma EBITDA | $120.6M |
| Current Margin | 6.1% |
| Pro Forma Margin | 13.4% |
| WC Released (1x) | $34.4M |
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 | $84.0M | $1.02B | 12.15x | 64.8% |
| Base (11x exit) | 10.0x | 11.0x | $84.0M | $1.15B | 13.69x | 68.8% |
| Bull Case | 9.0x | 11.0x | $75.6M | $1.39B | 18.46x | 79.2% |
| Bull (12x exit) | 9.0x | 12.0x | $75.6M | $1.54B | 20.43x | 82.8% |
| Bear Case | 11.0x | 10.0x | $92.4M | $662.9M | 7.18x | 48.3% |
| Bear (11x exit) | 11.0x | 11.0x | $92.4M | $759.2M | 8.22x | 52.4% |
7. Key Risks & Mitigants
| Severity | Risk Factor | Mitigant |
|---|---|---|
| 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
- 43 hospitals with 184-734 beds
- Same-state prioritization (n=44)
- Comp margins: P25=-15.3% / P50=-2.5% / P75=4.8%
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.