WILCOX MEMORIAL HOSPTIAL
1. Target Overview & Investment Thesis
WILCOX MEMORIAL HOSPTIAL is a 72-bed suburban community hospital in KAUAI, HI with $152.0M in net patient revenue and a 2.6% operating margin. The hospital serves a payer mix of 23.0% Medicare, 0.1% Medicaid, and 76.9% commercial.
Thesis: Turnaround. Our ML models identify $11.2M in annual EBITDA improvement potential from RCM optimization across 5 levers, lifting margin from 2.6% to 10.0% (+736bps).
| Net Revenue HCRIS | $152.0M |
| Current EBITDA COMPUTED | $4.0M |
| Operating Margin COMPUTED | 2.6% |
| Occupancy HCRIS | 64.9% |
| Revenue / Bed COMPUTED | $2.1M |
| Net-to-Gross HCRIS | 36.5% |
| Distress Probability ML | 42.8% |
2. Market Context & Competitive Position
HI has 26 Medicare-certified hospitals with a median operating margin of -14.7%. The target's margin of 2.6% places it above the state median. Among 2219 size-comparable peers (36-144 beds), the median margin is -3.2%. The target performs in line with or above peers.
3. RCM Performance Analysis — Comparable Hospitals
Comps selected by bed count (36-144), prioritizing same-state peers. 2219 hospitals in the comp set.
| Hospital | State | Beds | Revenue | Margin |
|---|---|---|---|---|
| WILCOX MEMORIAL HOSPTIAL (Target) | HI | 72 | $152.0M | 2.6% |
| MIDWESTERN REGIONAL MEDICAL CE | IL | 73 | $1.38B | 80.5% |
| ROSWELL PARK CANCER INSTITUTE | NY | 142 | $772.3M | -40.1% |
| CONTRA COSTA REGIONAL MEDICAL | CA | 124 | $595.0M | -29.2% |
| JOHN DEMPSEY HOSPITAL | CT | 141 | $590.3M | -24.8% |
| INNOVIS HEALTH | ND | 142 | $537.9M | -5.3% |
| SMDC MEDICAL CENTER | MN | 118 | $519.2M | -7.1% |
| RANCHO LOS AMIGOS NATL.REHAB.C | CA | 83 | $512.6M | 41.9% |
| WENTWORTH DOUGLASS HOSPITAL | NH | 118 | $500.9M | 10.7% |
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: $11.2M (736bps margin improvement).
| Lever | Current | Target | EBITDA Impact | Margin | Ramp |
|---|---|---|---|---|---|
| Net Collection Rate | 93.5% | 97.0% | $3.2M | +210bp | 18mo |
| Cost to Collect | 4.5% | 2.5% | $3.0M | +200bp | 12mo |
| Denial Rate Reduction | 12.0% | 6.5% | $3.0M | +198bp | 12mo |
| A/R Days Reduction | 5200.0% | 3800.0% | $1.8M | +122bp | 9mo |
| Clean Claim Rate | 88.0% | 96.0% | $97K | +6bp | 6mo |
5. EBITDA Bridge
| Current EBITDA | $4.0M |
| + RCM Uplift | +$11.2M |
| Pro Forma EBITDA | $15.2M |
| Current Margin | 2.6% |
| Pro Forma Margin | 10.0% |
| WC Released (1x) | $5.8M |
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 | $138.2M | 22.50x | 86.4% |
| Base (11x exit) | 10.0x | 11.0x | $6.1M | $154.0M | 25.08x | 90.5% |
| Bull Case | 9.0x | 11.0x | $5.5M | $192.9M | 34.90x | 103.5% |
| Bull (12x exit) | 9.0x | 12.0x | $5.5M | $212.1M | 38.37x | 107.4% |
| Bear Case | 11.0x | 10.0x | $6.8M | $80.3M | 11.88x | 64.0% |
| Bear (11x exit) | 11.0x | 11.0x | $6.8M | $90.5M | 13.39x | 68.0% |
7. Key Risks & Mitigants
| Severity | Risk Factor | Mitigant |
|---|---|---|
| Medium | Standard execution risk | RCM improvement requires management buy-in and 12-18 month implementation timeline |
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
- 2219 hospitals with 36-144 beds
- Same-state prioritization (n=5)
- Comp margins: P25=-16.0% / P50=-3.2% / P75=8.4%
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.