CCH AT BAPTIST HEALTH CORBIN
1. Target Overview & Investment Thesis
CCH AT BAPTIST HEALTH CORBIN is a 32-bed suburban community hospital in WHITLEY, KY with $13.1M in net patient revenue and a 7.4% operating margin. The hospital serves a payer mix of 33.7% Medicare, 5.4% Medicaid, and 60.9% commercial.
Thesis: Turnaround. Our ML models identify $967K in annual EBITDA improvement potential from RCM optimization across 5 levers, lifting margin from 7.4% to 14.8% (+738bps).
| Net Revenue HCRIS | $13.1M |
| Current EBITDA COMPUTED | $972K |
| Operating Margin COMPUTED | 7.4% |
| Occupancy HCRIS | 66.2% |
| Revenue / Bed COMPUTED | $410K |
| Net-to-Gross HCRIS | 26.8% |
| Distress Probability ML | 45.6% |
2. Market Context & Competitive Position
KY has 114 Medicare-certified hospitals with a median operating margin of -0.6%. The target's margin of 7.4% places it above the state median. Among 59 size-comparable peers (16-64 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 (16-64), prioritizing same-state peers. 59 hospitals in the comp set.
| Hospital | State | Beds | Revenue | Margin |
|---|---|---|---|---|
| CCH AT BAPTIST HEALTH CORBIN (Target) | KY | 32 | $13.1M | 7.4% |
| BAPTIST HEALTH LAGRANGE | KY | 42 | $236.9M | 2.7% |
| CLARK REGIONAL MEDICAL CENTER | KY | 54 | $156.4M | 16.5% |
| BAPTIST HEALTH RICHMOND | KY | 53 | $145.6M | -3.7% |
| HIGHLANDS REGIONAL MEDICAL CEN | KY | 63 | $96.5M | -32.6% |
| FLAGET MEMORIAL HOSPITAL | KY | 40 | $86.2M | -0.6% |
| ROCKCASTLE HOSPT. & RESPIR CAR | KY | 30 | $79.1M | 2.2% |
| ADVENTHEALTH MANCHESTER | KY | 49 | $73.0M | -11.0% |
| HARLAN ARH | KY | 56 | $69.9M | -24.1% |
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: $967K (738bps margin improvement).
| Lever | Current | Target | EBITDA Impact | Margin | Ramp |
|---|---|---|---|---|---|
| Net Collection Rate | 93.5% | 97.0% | $275K | +210bp | 18mo |
| Cost to Collect | 4.5% | 2.5% | $262K | +200bp | 12mo |
| Denial Rate Reduction | 12.0% | 6.5% | $261K | +199bp | 12mo |
| A/R Days Reduction | 5200.0% | 3800.0% | $160K | +122bp | 9mo |
| Clean Claim Rate | 88.0% | 96.0% | $10K | +7bp | 6mo |
5. EBITDA Bridge
| Current EBITDA | $972K |
| + RCM Uplift | +$967K |
| Pro Forma EBITDA | $1.9M |
| Current Margin | 7.4% |
| Pro Forma Margin | 14.8% |
| WC Released (1x) | $503K |
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 | $1.5M | $16.1M | 10.76x | 60.8% |
| Base (11x exit) | 10.0x | 11.0x | $1.5M | $18.2M | 12.16x | 64.8% |
| Bull Case | 9.0x | 11.0x | $1.3M | $21.9M | 16.24x | 74.6% |
| Bull (12x exit) | 9.0x | 12.0x | $1.3M | $24.2M | 18.02x | 78.3% |
| Bear Case | 11.0x | 10.0x | $1.6M | $10.8M | 6.54x | 45.6% |
| Bear (11x exit) | 11.0x | 11.0x | $1.6M | $12.4M | 7.52x | 49.7% |
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
- 59 hospitals with 16-64 beds
- Same-state prioritization (n=60)
- Comp margins: P25=-11.0% / P50=-3.4% / P75=5.7%
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.