IBERIA MEDICAL CENTER
1. Target Overview & Investment Thesis
IBERIA MEDICAL CENTER is a 133-bed suburban community hospital in nan, LA with $107.0M in net patient revenue and a 1.3% operating margin. The hospital serves a payer mix of 31.7% Medicare, 1.5% Medicaid, and 66.8% commercial.
Thesis: Undervalued. Our ML models identify $7.9M in annual EBITDA improvement potential from RCM optimization across 5 levers, lifting margin from 1.3% to 8.7% (+736bps).
| Net Revenue HCRIS | $107.0M |
| Current EBITDA COMPUTED | $1.4M |
| Operating Margin COMPUTED | 1.3% |
| Occupancy HCRIS | 38.5% |
| Revenue / Bed COMPUTED | $804K |
| Net-to-Gross HCRIS | 24.9% |
| Distress Probability ML | 50.5% |
2. Market Context & Competitive Position
LA has 212 Medicare-certified hospitals with a median operating margin of -3.5%. The target's margin of 1.3% places it above the state median. Among 40 size-comparable peers (66-266 beds), the median margin is -5.7%. The target performs in line with or above peers.
3. RCM Performance Analysis — Comparable Hospitals
Comps selected by bed count (66-266), prioritizing same-state peers. 40 hospitals in the comp set.
| Hospital | State | Beds | Revenue | Margin |
|---|---|---|---|---|
| IBERIA MEDICAL CENTER (Target) | LA | 133 | $107.0M | 1.3% |
| CHILDRENS HOSPITAL | LA | 189 | $523.4M | 6.7% |
| BATON ROUGE GENERAL | LA | 251 | $445.5M | -6.7% |
| ST. TAMMANY PARISH HOSPITAL | LA | 213 | $434.6M | 4.5% |
| OCHSNER MEDICAL CENTER - BATON | LA | 171 | $371.4M | -11.5% |
| WOMANS HOSPITAL | LA | 228 | $345.8M | -8.8% |
| WEST JEFFERSON MEDICAL CENTER | LA | 199 | $329.9M | -11.9% |
| LAKE CHARLES MEMORIAL HOSPITAL | LA | 254 | $324.1M | -2.7% |
| EAST JEFFERSON GENERAL HOSPITA | LA | 250 | $302.6M | -27.0% |
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: $7.9M (736bps margin improvement).
| Lever | Current | Target | EBITDA Impact | Margin | Ramp |
|---|---|---|---|---|---|
| Net Collection Rate | 93.5% | 97.0% | $2.2M | +210bp | 18mo |
| Cost to Collect | 4.5% | 2.5% | $2.1M | +200bp | 12mo |
| Denial Rate Reduction | 12.0% | 6.5% | $2.1M | +198bp | 12mo |
| A/R Days Reduction | 5200.0% | 3800.0% | $1.3M | +122bp | 9mo |
| Clean Claim Rate | 88.0% | 96.0% | $68K | +6bp | 6mo |
5. EBITDA Bridge
| Current EBITDA | $1.4M |
| + RCM Uplift | +$7.9M |
| Pro Forma EBITDA | $9.3M |
| Current Margin | 1.3% |
| Pro Forma Margin | 8.7% |
| WC Released (1x) | $4.1M |
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 | $2.1M | $87.9M | 41.18x | 110.3% |
| Base (11x exit) | 10.0x | 11.0x | $2.1M | $97.4M | 45.62x | 114.7% |
| Bull Case | 9.0x | 11.0x | $1.9M | $124.0M | 64.57x | 130.2% |
| Bull (12x exit) | 9.0x | 12.0x | $1.9M | $135.9M | 70.74x | 134.4% |
| Bear Case | 11.0x | 10.0x | $2.3M | $47.8M | 20.37x | 82.7% |
| Bear (11x exit) | 11.0x | 11.0x | $2.3M | $53.4M | 22.73x | 86.8% |
7. Key Risks & Mitigants
| Severity | Risk Factor | Mitigant |
|---|---|---|
| High | Elevated distress probability | Model estimates 50.5% 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
- 40 hospitals with 66-266 beds
- Same-state prioritization (n=41)
- Comp margins: P25=-12.3% / P50=-5.7% / P75=4.3%
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.