ACADIA VERMILION HOSPITAL
1. Target Overview & Investment Thesis
ACADIA VERMILION HOSPITAL is a 78-bed suburban community hospital in nan, LA with $17.6M in net patient revenue and a 7.3% operating margin. The hospital serves a payer mix of 3.3% Medicare, 15.4% Medicaid, and 81.3% commercial.
Thesis: Turnaround. Our ML models identify $1.3M in annual EBITDA improvement potential from RCM optimization across 5 levers, lifting margin from 7.3% to 14.7% (+736bps).
| Net Revenue HCRIS | $17.6M |
| Current EBITDA COMPUTED | $1.3M |
| Operating Margin COMPUTED | 7.3% |
| Occupancy HCRIS | 77.7% |
| Revenue / Bed COMPUTED | $226K |
| Net-to-Gross HCRIS | 35.6% |
| Distress Probability ML | 45.5% |
2. Market Context & Competitive Position
LA has 212 Medicare-certified hospitals with a median operating margin of -3.5%. The target's margin of 7.3% places it above the state median. Among 63 size-comparable peers (39-156 beds), the median margin is -4.2%. The target performs in line with or above peers.
3. RCM Performance Analysis — Comparable Hospitals
Comps selected by bed count (39-156), prioritizing same-state peers. 63 hospitals in the comp set.
| Hospital | State | Beds | Revenue | Margin |
|---|---|---|---|---|
| ACADIA VERMILION HOSPITAL (Target) | LA | 78 | $17.6M | 7.3% |
| TERREBONNE GENERAL HEALTH SYST | LA | 139 | $230.6M | -8.3% |
| OCHSNER MEDICAL CENTER - KENNE | LA | 115 | $193.8M | -2.9% |
| ST. PATRICK HOSPITAL | LA | 100 | $189.4M | -7.4% |
| OPELOUSAS GENERAL HOSPITAL | LA | 151 | $168.5M | -12.7% |
| UNIVERSITY HOSPITAL & CLINICS | LA | 52 | $158.9M | -33.4% |
| OCHSNER MEDICAL CENTER -NORTHS | LA | 150 | $107.3M | -5.7% |
| IBERIA MEDICAL CENTER | LA | 133 | $107.0M | 1.3% |
| SOUTHERN REGIONAL MEDICAL CORP | LA | 64 | $97.3M | -50.0% |
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: $1.3M (736bps margin improvement).
| Lever | Current | Target | EBITDA Impact | Margin | Ramp |
|---|---|---|---|---|---|
| Net Collection Rate | 93.5% | 97.0% | $370K | +210bp | 18mo |
| Cost to Collect | 4.5% | 2.5% | $352K | +200bp | 12mo |
| Denial Rate Reduction | 12.0% | 6.5% | $349K | +198bp | 12mo |
| A/R Days Reduction | 5200.0% | 3800.0% | $214K | +122bp | 9mo |
| Clean Claim Rate | 88.0% | 96.0% | $11K | +6bp | 6mo |
5. EBITDA Bridge
| Current EBITDA | $1.3M |
| + RCM Uplift | +$1.3M |
| Pro Forma EBITDA | $2.6M |
| Current Margin | 7.3% |
| Pro Forma Margin | 14.7% |
| WC Released (1x) | $676K |
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 | $2.0M | $21.5M | 10.81x | 61.0% |
| Base (11x exit) | 10.0x | 11.0x | $2.0M | $24.3M | 12.21x | 65.0% |
| Bull Case | 9.0x | 11.0x | $1.8M | $29.2M | 16.32x | 74.8% |
| Bull (12x exit) | 9.0x | 12.0x | $1.8M | $32.4M | 18.10x | 78.5% |
| Bear Case | 11.0x | 10.0x | $2.2M | $14.4M | 6.57x | 45.7% |
| Bear (11x exit) | 11.0x | 11.0x | $2.2M | $16.5M | 7.55x | 49.8% |
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
- 63 hospitals with 39-156 beds
- Same-state prioritization (n=64)
- Comp margins: P25=-28.5% / P50=-4.2% / P75=2.9%
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.