PARK PLACE SURGERY CENTER
1. Target Overview & Investment Thesis
PARK PLACE SURGERY CENTER is a 10-bed suburban community hospital in LAFAYETTE, LA with $51.6M in net patient revenue and a 15.4% operating margin. The hospital serves a payer mix of 16.5% Medicare, 1.6% Medicaid, and 81.9% commercial.
Thesis: Turnaround. Our ML models identify $3.8M in annual EBITDA improvement potential from RCM optimization across 5 levers, lifting margin from 15.4% to 22.7% (+736bps).
| Net Revenue HCRIS | $51.6M |
| Current EBITDA COMPUTED | $7.9M |
| Operating Margin COMPUTED | 15.4% |
| Occupancy HCRIS | 13.8% |
| Revenue / Bed COMPUTED | $5.2M |
| Net-to-Gross HCRIS | 25.5% |
| Distress Probability ML | 48.8% |
2. Market Context & Competitive Position
LA has 212 Medicare-certified hospitals with a median operating margin of -3.5%. The target's margin of 15.4% places it above the state median. Among 36 size-comparable peers (5-20 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 (5-20), prioritizing same-state peers. 36 hospitals in the comp set.
| Hospital | State | Beds | Revenue | Margin |
|---|---|---|---|---|
| PARK PLACE SURGERY CENTER (Target) | LA | 10 | $51.6M | 15.4% |
| SPECIALISTS HOSPITAL OF SHREVE | LA | 15 | $79.1M | 21.3% |
| SURGICAL SPECIALTY CENTER BATO | LA | 16 | $49.8M | 16.9% |
| LAFAYETTE SURGICAL SPECIALTY H | LA | 20 | $48.9M | 9.1% |
| REEVES MEMORIAL MEDICAL CENTER | LA | 15 | $34.0M | 64.5% |
| MONROE SURGICAL HOSPITAL | LA | 10 | $25.8M | -11.9% |
| DOCTORS HOSPITAL OF SLIDELL LL | LA | 10 | $20.7M | 21.0% |
| UNION GENERAL HOSPITAL INC. | LA | 20 | $20.4M | 2.2% |
| ACADIA-ST. LANDRY HOSPITAL | LA | 15 | $15.5M | -6.3% |
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: $3.8M (736bps margin improvement).
| Lever | Current | Target | EBITDA Impact | Margin | Ramp |
|---|---|---|---|---|---|
| Net Collection Rate | 93.5% | 97.0% | $1.1M | +210bp | 18mo |
| Cost to Collect | 4.5% | 2.5% | $1.0M | +200bp | 12mo |
| Denial Rate Reduction | 12.0% | 6.5% | $1.0M | +198bp | 12mo |
| A/R Days Reduction | 5200.0% | 3800.0% | $628K | +122bp | 9mo |
| Clean Claim Rate | 88.0% | 96.0% | $33K | +6bp | 6mo |
5. EBITDA Bridge
| Current EBITDA | $7.9M |
| + RCM Uplift | +$3.8M |
| Pro Forma EBITDA | $11.7M |
| Current Margin | 15.4% |
| Pro Forma Margin | 22.7% |
| WC Released (1x) | $2.0M |
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 | $12.2M | $90.3M | 7.40x | 49.2% |
| Base (11x exit) | 10.0x | 11.0x | $12.2M | $103.3M | 8.47x | 53.3% |
| Bull Case | 9.0x | 11.0x | $11.0M | $119.8M | 10.91x | 61.3% |
| Bull (12x exit) | 9.0x | 12.0x | $11.0M | $134.0M | 12.20x | 64.9% |
| Bear Case | 11.0x | 10.0x | $13.4M | $67.4M | 5.02x | 38.1% |
| Bear (11x exit) | 11.0x | 11.0x | $13.4M | $78.5M | 5.85x | 42.4% |
7. Key Risks & Mitigants
| Severity | Risk Factor | Mitigant |
|---|---|---|
| Medium | Low occupancy | At 13.8%, fixed costs are spread over fewer patient days. Mitigant: volume growth is an additional upside lever not modeled in base case |
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
- 36 hospitals with 5-20 beds
- Same-state prioritization (n=38)
- Comp margins: P25=-4.8% / P50=3.4% / P75=17.1%
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.