CHRISTUS DUBUIS - ALEXANDRIA
1. Target Overview & Investment Thesis
CHRISTUS DUBUIS - ALEXANDRIA is a 25-bed rural/critical access in RAPIDES PARISH, LA with $7.2M in net patient revenue and a -1.9% operating margin. The hospital serves a payer mix of 55.9% Medicare, 15.1% Medicaid, and 29.0% commercial.
Thesis: Turnaround. Our ML models identify $543K in annual EBITDA improvement potential from RCM optimization across 5 levers, lifting margin from -1.9% to 5.6% (+749bps).
| Net Revenue HCRIS | $7.2M |
| Current EBITDA COMPUTED | $-138K |
| Operating Margin COMPUTED | -1.9% |
| Occupancy HCRIS | 53.8% |
| Revenue / Bed COMPUTED | $290K |
| Net-to-Gross HCRIS | 39.3% |
| Distress Probability ML | 53.3% |
2. Market Context & Competitive Position
LA has 212 Medicare-certified hospitals with a median operating margin of -3.5%. The target's margin of -1.9% places it above the state median. Among 130 size-comparable peers (12-50 beds), the median margin is -3.3%. The target performs in line with or above peers.
3. RCM Performance Analysis — Comparable Hospitals
Comps selected by bed count (12-50), prioritizing same-state peers. 130 hospitals in the comp set.
| Hospital | State | Beds | Revenue | Margin |
|---|---|---|---|---|
| CHRISTUS DUBUIS - ALEXANDRIA (Target) | LA | 25 | $7.2M | -1.9% |
| SPECIALISTS HOSPITAL OF SHREVE | LA | 15 | $79.1M | 21.3% |
| OCHSNER BAYOU LLC | LA | 25 | $76.5M | -0.9% |
| OUR LADY OF THE ANGELS HOSPITA | LA | 36 | $76.2M | -4.9% |
| CENTRAL LOUISIANA SURGICAL HOS | LA | 24 | $69.1M | 7.7% |
| ABBEVILLE GENERAL HOSPITAL | LA | 44 | $68.5M | 3.4% |
| ST. CHARLES PARISH HOSPITAL | LA | 27 | $64.0M | -5.1% |
| AVALA | LA | 21 | $64.0M | 7.4% |
| BYRD REGIONAL HOSPITAL | LA | 39 | $61.1M | 2.5% |
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: $543K (749bps margin improvement).
| Lever | Current | Target | EBITDA Impact | Margin | Ramp |
|---|---|---|---|---|---|
| Net Collection Rate | 93.5% | 97.0% | $152K | +210bp | 18mo |
| Denial Rate Reduction | 12.0% | 6.5% | $148K | +204bp | 12mo |
| Cost to Collect | 4.5% | 2.5% | $145K | +200bp | 12mo |
| A/R Days Reduction | 5200.0% | 3800.0% | $88K | +122bp | 9mo |
| Clean Claim Rate | 88.0% | 96.0% | $10K | +13bp | 6mo |
5. EBITDA Bridge
| Current EBITDA | $-138K |
| + RCM Uplift | +$543K |
| Pro Forma EBITDA | $405K |
| Current Margin | -1.9% |
| Pro Forma Margin | 5.6% |
| WC Released (1x) | $278K |
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 | $-212K | $4.5M | 0.00x | -100.0% |
| Base (11x exit) | 10.0x | 11.0x | $-212K | $4.9M | 0.00x | -100.0% |
| Bull Case | 9.0x | 11.0x | $-191K | $6.6M | 0.00x | -100.0% |
| Bull (12x exit) | 9.0x | 12.0x | $-191K | $7.2M | 0.00x | -100.0% |
| Bear Case | 11.0x | 10.0x | $-233K | $1.9M | 0.00x | -100.0% |
| Bear (11x exit) | 11.0x | 11.0x | $-233K | $2.0M | 0.00x | -100.0% |
7. Key Risks & Mitigants
| Severity | Risk Factor | Mitigant |
|---|---|---|
| High | Negative operating margin | RCM uplift bridge shows clear path to profitability; working capital release provides near-term cash cushion |
| Medium | Heavy Medicare dependence | Medicare comprises 55.9% of days; rate updates may lag inflation. Mitigant: CDI/CMI lever directly increases Medicare reimbursement |
| High | Elevated distress probability | Model estimates 53.3% 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
- 130 hospitals with 12-50 beds
- Same-state prioritization (n=131)
- Comp margins: P25=-15.8% / P50=-3.3% / P75=6.0%
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.