ASCENSION ST. VINCENT HOSPITAL
1. Target Overview & Investment Thesis
ASCENSION ST. VINCENT HOSPITAL is a 756-bed large academic medical center in MARION, IN with $1.41B in net patient revenue and a 4.8% operating margin. The hospital serves a payer mix of 21.4% Medicare, 8.1% Medicaid, and 70.5% commercial.
Thesis: Undervalued. Our ML models identify $103.6M in annual EBITDA improvement potential from RCM optimization across 5 levers, lifting margin from 4.8% to 12.2% (+736bps).
| Net Revenue HCRIS | $1.41B |
| Current EBITDA COMPUTED | $67.7M |
| Operating Margin COMPUTED | 4.8% |
| Occupancy HCRIS | 63.2% |
| Revenue / Bed COMPUTED | $1.9M |
| Net-to-Gross HCRIS | 27.1% |
| Distress Probability ML | 46.7% |
2. Market Context & Competitive Position
IN has 171 Medicare-certified hospitals with a median operating margin of -1.1%. The target's margin of 4.8% places it above the state median. Among 8 size-comparable peers (378-1512 beds), the median margin is 0.2%. The target performs in line with or above peers.
3. RCM Performance Analysis — Comparable Hospitals
Comps selected by bed count (378-1512), prioritizing same-state peers. 8 hospitals in the comp set.
| Hospital | State | Beds | Revenue | Margin |
|---|---|---|---|---|
| ASCENSION ST. VINCENT HOSPITAL (Target) | IN | 756 | $1.41B | 4.8% |
| INDIANA UNIVERSITY HEALTH | IN | 1269 | $3.58B | -38.4% |
| PARKVIEW HOSPITAL | IN | 761 | $1.66B | -6.6% |
| COMMUNITY HEALTH NETWORK INC. | IN | 387 | $1.24B | 16.4% |
| DEACONESS HOSPITAL | IN | 545 | $1.14B | 0.7% |
| FRANCISCAN HEALTH INDIANAPOLIS | IN | 401 | $891.4M | -0.3% |
| MEMORIAL HOSPITAL OF SOUTH BEN | IN | 429 | $631.5M | 9.7% |
| COMMUNITY HOSPITAL | IN | 405 | $615.1M | 6.0% |
| METHODIST HOSPITALS INC | IN | 405 | $390.9M | -7.4% |
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: $103.6M (736bps margin improvement).
| Lever | Current | Target | EBITDA Impact | Margin | Ramp |
|---|---|---|---|---|---|
| Net Collection Rate | 93.5% | 97.0% | $29.5M | +210bp | 18mo |
| Cost to Collect | 4.5% | 2.5% | $28.1M | +200bp | 12mo |
| Denial Rate Reduction | 12.0% | 6.5% | $27.9M | +198bp | 12mo |
| A/R Days Reduction | 5200.0% | 3800.0% | $17.1M | +122bp | 9mo |
| Clean Claim Rate | 88.0% | 96.0% | $900K | +6bp | 6mo |
5. EBITDA Bridge
| Current EBITDA | $67.7M |
| + RCM Uplift | +$103.6M |
| Pro Forma EBITDA | $171.3M |
| Current Margin | 4.8% |
| Pro Forma Margin | 12.2% |
| WC Released (1x) | $54.0M |
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 | $104.2M | $1.48B | 14.23x | 70.1% |
| Base (11x exit) | 10.0x | 11.0x | $104.2M | $1.66B | 15.98x | 74.1% |
| Bull Case | 9.0x | 11.0x | $93.7M | $2.04B | 21.76x | 85.2% |
| Bull (12x exit) | 9.0x | 12.0x | $93.7M | $2.25B | 24.03x | 88.9% |
| Bear Case | 11.0x | 10.0x | $114.6M | $930.5M | 8.12x | 52.0% |
| Bear (11x exit) | 11.0x | 11.0x | $114.6M | $1.06B | 9.26x | 56.1% |
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
- 8 hospitals with 378-1512 beds
- Same-state prioritization (n=9)
- Comp margins: P25=-6.8% / P50=0.2% / P75=6.9%
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.