IDAHO FALLS COMMUNITY HOSPITAL
1. Target Overview & Investment Thesis
IDAHO FALLS COMMUNITY HOSPITAL is a 88-bed under-performing / distressed in nan, ID with $98.9M in net patient revenue and a -23.1% operating margin. The hospital serves a payer mix of 41.4% Medicare, 14.9% Medicaid, and 43.7% commercial.
Thesis: Turnaround. Our ML models identify $7.3M in annual EBITDA improvement potential from RCM optimization across 5 levers, lifting margin from -23.1% to -15.7% (+736bps).
| Net Revenue HCRIS | $98.9M |
| Current EBITDA COMPUTED | $-22.8M |
| Operating Margin COMPUTED | -23.1% |
| Occupancy HCRIS | 38.9% |
| Revenue / Bed COMPUTED | $1.1M |
| Net-to-Gross HCRIS | 38.0% |
| Distress Probability ML | 54.9% |
2. Market Context & Competitive Position
ID has 51 Medicare-certified hospitals with a median operating margin of -3.5%. The target's margin of -23.1% places it below the state median. Among 10 size-comparable peers (44-176 beds), the median margin is 7.2%. The target's below-peer margin suggests operational improvement opportunity.
3. RCM Performance Analysis — Comparable Hospitals
Comps selected by bed count (44-176), prioritizing same-state peers. 10 hospitals in the comp set.
| Hospital | State | Beds | Revenue | Margin |
|---|---|---|---|---|
| IDAHO FALLS COMMUNITY HOSPITAL (Target) | ID | 88 | $98.9M | -23.1% |
| ST LUKES MAGIC VALLEY REG MED | ID | 175 | $482.9M | -6.8% |
| PORTNEUF MEDICAL CENTER | ID | 142 | $390.3M | 13.4% |
| ST. ALPHONSUS MEDICAL CENTER - | ID | 96 | $263.3M | 15.2% |
| ST. LUKES NAMPA MEDICAL CENTER | ID | 87 | $255.6M | -10.1% |
| ST JOSEPH REGIONAL MEDICAL CEN | ID | 110 | $168.4M | -3.0% |
| WEST VALLEY MEDICAL CENTER | ID | 112 | $118.1M | 24.6% |
| MADISON MEMORIAL HOSPITAL | ID | 53 | $94.0M | 1.1% |
| INTERMOUNTAIN | ID | 150 | $31.5M | 26.3% |
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: $7.3M (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% | $63K | +6bp | 6mo |
5. EBITDA Bridge
| Current EBITDA | $-22.8M |
| + RCM Uplift | +$7.3M |
| Pro Forma EBITDA | $-15.5M |
| Current Margin | -23.1% |
| Pro Forma Margin | -15.7% |
| WC Released (1x) | $3.8M |
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 | $-35.1M | $-77.7M | 0.00x | -100.0% |
| Base (11x exit) | 10.0x | 11.0x | $-35.1M | $-96.9M | 0.00x | -100.0% |
| Bull Case | 9.0x | 11.0x | $-31.6M | $-84.2M | 0.00x | -100.0% |
| Bull (12x exit) | 9.0x | 12.0x | $-31.6M | $-101.2M | 0.00x | -100.0% |
| Bear Case | 11.0x | 10.0x | $-38.6M | $-102.7M | 0.00x | -100.0% |
| Bear (11x exit) | 11.0x | 11.0x | $-38.6M | $-125.5M | 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 |
| High | Elevated distress probability | Model estimates 54.9% 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
- 10 hospitals with 44-176 beds
- Same-state prioritization (n=11)
- Comp margins: P25=-5.9% / P50=7.2% / P75=14.9%
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.