EMORY HILLANDALE HOSPITAL
1. Target Overview & Investment Thesis
EMORY HILLANDALE HOSPITAL is a 90-bed suburban community hospital in DEKALB, GA with $101.9M in net patient revenue and a -14.0% operating margin. The hospital serves a payer mix of 14.9% Medicare, 9.5% Medicaid, and 75.6% commercial.
Thesis: Turnaround. Our ML models identify $7.5M in annual EBITDA improvement potential from RCM optimization across 5 levers, lifting margin from -14.0% to -6.6% (+736bps).
| Net Revenue HCRIS | $101.9M |
| Current EBITDA COMPUTED | $-14.3M |
| Operating Margin COMPUTED | -14.0% |
| Occupancy HCRIS | 74.4% |
| Revenue / Bed COMPUTED | $1.1M |
| Net-to-Gross HCRIS | 21.7% |
| Distress Probability ML | 42.5% |
2. Market Context & Competitive Position
GA has 165 Medicare-certified hospitals with a median operating margin of -2.8%. The target's margin of -14.0% places it below the state median. Among 63 size-comparable peers (45-180 beds), the median margin is -0.3%. The target's below-peer margin suggests operational improvement opportunity.
3. RCM Performance Analysis — Comparable Hospitals
Comps selected by bed count (45-180), prioritizing same-state peers. 63 hospitals in the comp set.
| Hospital | State | Beds | Revenue | Margin |
|---|---|---|---|---|
| EMORY HILLANDALE HOSPITAL (Target) | GA | 90 | $101.9M | -14.0% |
| PIEDMONT NEWNAN HOSPITAL INC. | GA | 177 | $366.0M | 19.2% |
| NORTH FULTON REGIONAL HOSPITAL | GA | 178 | $320.1M | 6.6% |
| 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% |
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: $7.5M (736bps margin improvement).
| Lever | Current | Target | EBITDA Impact | Margin | Ramp |
|---|---|---|---|---|---|
| Net Collection Rate | 93.5% | 97.0% | $2.1M | +210bp | 18mo |
| Cost to Collect | 4.5% | 2.5% | $2.0M | +200bp | 12mo |
| Denial Rate Reduction | 12.0% | 6.5% | $2.0M | +198bp | 12mo |
| A/R Days Reduction | 5200.0% | 3800.0% | $1.2M | +122bp | 9mo |
| Clean Claim Rate | 88.0% | 96.0% | $65K | +6bp | 6mo |
5. EBITDA Bridge
| Current EBITDA | $-14.3M |
| + RCM Uplift | +$7.5M |
| Pro Forma EBITDA | $-6.8M |
| Current Margin | -14.0% |
| Pro Forma Margin | -6.6% |
| WC Released (1x) | $3.9M |
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 | $-21.9M | $-19.0M | 0.00x | -100.0% |
| Base (11x exit) | 10.0x | 11.0x | $-21.9M | $-28.0M | 0.00x | -100.0% |
| Bull Case | 9.0x | 11.0x | $-19.7M | $-10.4M | 0.00x | -100.0% |
| Bull (12x exit) | 9.0x | 12.0x | $-19.7M | $-17.2M | 0.00x | -100.0% |
| Bear Case | 11.0x | 10.0x | $-24.1M | $-49.4M | 0.00x | -100.0% |
| Bear (11x exit) | 11.0x | 11.0x | $-24.1M | $-62.2M | 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 |
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
- 63 hospitals with 45-180 beds
- Same-state prioritization (n=64)
- Comp margins: P25=-11.0% / P50=-0.3% / 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.