IU HEALTH WHITE HOSPITAL
1. Target Overview & Investment Thesis
IU HEALTH WHITE HOSPITAL is a 24-bed suburban community hospital in WHITE, IN with $43.9M in net patient revenue and a 8.0% operating margin. The hospital serves a payer mix of 47.6% Medicare, 0.7% Medicaid, and 51.7% commercial.
Thesis: Turnaround. Our ML models identify $3.2M in annual EBITDA improvement potential from RCM optimization across 5 levers, lifting margin from 8.0% to 15.4% (+736bps).
| Net Revenue HCRIS | $43.9M |
| Current EBITDA COMPUTED | $3.5M |
| Operating Margin COMPUTED | 8.0% |
| Occupancy HCRIS | 34.3% |
| Revenue / Bed COMPUTED | $1.8M |
| Net-to-Gross HCRIS | 31.6% |
| Distress Probability ML | 50.8% |
2. Market Context & Competitive Position
IN has 171 Medicare-certified hospitals with a median operating margin of -1.1%. The target's margin of 8.0% places it above the state median. Among 84 size-comparable peers (12-48 beds), the median margin is -4.7%. The target performs in line with or above peers.
3. RCM Performance Analysis — Comparable Hospitals
Comps selected by bed count (12-48), prioritizing same-state peers. 84 hospitals in the comp set.
| Hospital | State | Beds | Revenue | Margin |
|---|---|---|---|---|
| IU HEALTH WHITE HOSPITAL (Target) | IN | 24 | $43.9M | 8.0% |
| INDIANA ORTHOPAEDIC HOSPITAL L | IN | 38 | $196.8M | 31.2% |
| ORTHOPAEDIC HOSPT.AT PARKVIEW | IN | 37 | $175.7M | 36.8% |
| LUTHERAN MUSCULOSKELETAL CENTE | IN | 39 | $168.9M | 25.0% |
| MAJOR HOSPITAL | IN | 46 | $156.9M | -9.2% |
| HENRY COUNTY MEMORIAL HOSPITAL | IN | 48 | $137.8M | -1.7% |
| MARGARET MARY COMMUNITY HOSPIT | IN | 25 | $124.5M | -3.6% |
| KINGS DAUGHTERS HOSPITAL | IN | 43 | $123.4M | -13.8% |
| MEMORIAL HOSPITAL LOGANSPORT | IN | 37 | $103.6M | -17.4% |
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: $3.2M (736bps margin improvement).
| Lever | Current | Target | EBITDA Impact | Margin | Ramp |
|---|---|---|---|---|---|
| Net Collection Rate | 93.5% | 97.0% | $921K | +210bp | 18mo |
| Cost to Collect | 4.5% | 2.5% | $877K | +200bp | 12mo |
| Denial Rate Reduction | 12.0% | 6.5% | $868K | +198bp | 12mo |
| A/R Days Reduction | 5200.0% | 3800.0% | $534K | +122bp | 9mo |
| Clean Claim Rate | 88.0% | 96.0% | $28K | +6bp | 6mo |
5. EBITDA Bridge
| Current EBITDA | $3.5M |
| + RCM Uplift | +$3.2M |
| Pro Forma EBITDA | $6.8M |
| Current Margin | 8.0% |
| Pro Forma Margin | 15.4% |
| WC Released (1x) | $1.7M |
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 | $5.4M | $55.6M | 10.23x | 59.2% |
| Base (11x exit) | 10.0x | 11.0x | $5.4M | $62.9M | 11.58x | 63.2% |
| Bull Case | 9.0x | 11.0x | $4.9M | $75.3M | 15.41x | 72.8% |
| Bull (12x exit) | 9.0x | 12.0x | $4.9M | $83.6M | 17.11x | 76.4% |
| Bear Case | 11.0x | 10.0x | $6.0M | $37.7M | 6.31x | 44.5% |
| Bear (11x exit) | 11.0x | 11.0x | $6.0M | $43.4M | 7.26x | 48.7% |
7. Key Risks & Mitigants
| Severity | Risk Factor | Mitigant |
|---|---|---|
| Medium | Low occupancy | At 34.3%, fixed costs are spread over fewer patient days. Mitigant: volume growth is an additional upside lever not modeled in base case |
| High | Elevated distress probability | Model estimates 50.8% 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
- 84 hospitals with 12-48 beds
- Same-state prioritization (n=85)
- Comp margins: P25=-15.4% / P50=-4.7% / P75=6.8%
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.