SSH - SAVANNAH INC.
1. Target Overview & Investment Thesis
SSH - SAVANNAH INC. is a 40-bed suburban community hospital in CHATHAM, GA with $21.7M in net patient revenue and a 3.5% operating margin. The hospital serves a payer mix of 46.0% Medicare, 4.6% Medicaid, and 49.4% commercial.
Thesis: Turnaround. Our ML models identify $1.6M in annual EBITDA improvement potential from RCM optimization across 5 levers, lifting margin from 3.5% to 10.8% (+736bps).
| Net Revenue HCRIS | $21.7M |
| Current EBITDA COMPUTED | $752K |
| Operating Margin COMPUTED | 3.5% |
| Occupancy HCRIS | 79.9% |
| Revenue / Bed COMPUTED | $544K |
| Net-to-Gross HCRIS | 13.3% |
| Distress Probability ML | 41.1% |
2. Market Context & Competitive Position
GA has 165 Medicare-certified hospitals with a median operating margin of -2.8%. The target's margin of 3.5% places it above the state median. Among 85 size-comparable peers (20-80 beds), the median margin is -3.4%. The target performs in line with or above peers.
3. RCM Performance Analysis — Comparable Hospitals
Comps selected by bed count (20-80), prioritizing same-state peers. 85 hospitals in the comp set.
| Hospital | State | Beds | Revenue | Margin |
|---|---|---|---|---|
| SSH - SAVANNAH INC. (Target) | GA | 40 | $21.7M | 3.5% |
| 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% |
| PIEDMONT WALTON HOSPITAL | GA | 76 | $128.6M | 29.1% |
| CRISP REGIONAL HOSPITAL INC. | GA | 65 | $115.2M | -8.7% |
| UNION GENERAL HOSPITAL | GA | 39 | $108.6M | 2.4% |
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: $1.6M (736bps margin improvement).
| Lever | Current | Target | EBITDA Impact | Margin | Ramp |
|---|---|---|---|---|---|
| Net Collection Rate | 93.5% | 97.0% | $457K | +210bp | 18mo |
| Cost to Collect | 4.5% | 2.5% | $435K | +200bp | 12mo |
| Denial Rate Reduction | 12.0% | 6.5% | $431K | +198bp | 12mo |
| A/R Days Reduction | 5200.0% | 3800.0% | $265K | +122bp | 9mo |
| Clean Claim Rate | 88.0% | 96.0% | $14K | +6bp | 6mo |
5. EBITDA Bridge
| Current EBITDA | $752K |
| + RCM Uplift | +$1.6M |
| Pro Forma EBITDA | $2.4M |
| Current Margin | 3.5% |
| Pro Forma Margin | 10.8% |
| WC Released (1x) | $834K |
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 | $1.2M | $21.0M | 18.12x | 78.5% |
| Base (11x exit) | 10.0x | 11.0x | $1.2M | $23.4M | 20.26x | 82.5% |
| Bull Case | 9.0x | 11.0x | $1.0M | $29.1M | 27.95x | 94.7% |
| Bull (12x exit) | 9.0x | 12.0x | $1.0M | $32.0M | 30.78x | 98.5% |
| Bear Case | 11.0x | 10.0x | $1.3M | $12.6M | 9.89x | 58.1% |
| Bear (11x exit) | 11.0x | 11.0x | $1.3M | $14.3M | 11.21x | 62.1% |
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
- 85 hospitals with 20-80 beds
- Same-state prioritization (n=86)
- Comp margins: P25=-17.1% / P50=-3.4% / 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.