OCEANS BEHAVIORAL HOSPITAL OF DERIDD
1. Target Overview & Investment Thesis
OCEANS BEHAVIORAL HOSPITAL OF DERIDD is a 20-bed community hospital in BEAUREGARD PARISH, LA with $5.6M in net patient revenue and a 20.7% operating margin. The hospital serves a payer mix of 48.2% Medicare, 0.0% Medicaid, and 51.8% commercial.
Thesis: Turnaround. Our ML models identify $422K in annual EBITDA improvement potential from RCM optimization across 5 levers, lifting margin from 20.7% to 28.3% (+756bps).
| Net Revenue HCRIS | $5.6M |
| Current EBITDA COMPUTED | $1.2M |
| Operating Margin COMPUTED | 20.7% |
| Occupancy HCRIS | 82.6% |
| Revenue / Bed COMPUTED | $279K |
| Net-to-Gross HCRIS | 47.9% |
| Distress Probability ML | nan% |
2. Market Context & Competitive Position
LA has 212 Medicare-certified hospitals with a median operating margin of -3.5%. The target's margin of 20.7% places it above the state median. Among 126 size-comparable peers (10-40 beds), the median margin is -2.9%. The target performs in line with or above peers.
3. RCM Performance Analysis — Comparable Hospitals
Comps selected by bed count (10-40), prioritizing same-state peers. 126 hospitals in the comp set.
| Hospital | State | Beds | Revenue | Margin |
|---|---|---|---|---|
| OCEANS BEHAVIORAL HOSPITAL OF (Target) | LA | 20 | $5.6M | 20.7% |
| 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% |
| 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% |
| THE SPINE HOSPITAL OF LOUISIAN | LA | 23 | $57.4M | 35.4% |
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: $422K (756bps margin improvement).
| Lever | Current | Target | EBITDA Impact | Margin | Ramp |
|---|---|---|---|---|---|
| Net Collection Rate | 93.5% | 97.0% | $117K | +210bp | 18mo |
| Denial Rate Reduction | 12.0% | 6.5% | $116K | +207bp | 12mo |
| Cost to Collect | 4.5% | 2.5% | $112K | +200bp | 12mo |
| A/R Days Reduction | 5200.0% | 3800.0% | $68K | +122bp | 9mo |
| Clean Claim Rate | 88.0% | 96.0% | $10K | +17bp | 6mo |
5. EBITDA Bridge
| Current EBITDA | $1.2M |
| + RCM Uplift | +$422K |
| Pro Forma EBITDA | $1.6M |
| Current Margin | 20.7% |
| Pro Forma Margin | 28.3% |
| WC Released (1x) | $214K |
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 | $1.8M | $11.8M | 6.66x | 46.1% |
| Base (11x exit) | 10.0x | 11.0x | $1.8M | $13.6M | 7.65x | 50.2% |
| Bull Case | 9.0x | 11.0x | $1.6M | $15.6M | 9.73x | 57.6% |
| Bull (12x exit) | 9.0x | 12.0x | $1.6M | $17.5M | 10.91x | 61.3% |
| Bear Case | 11.0x | 10.0x | $2.0M | $9.2M | 4.68x | 36.2% |
| Bear (11x exit) | 11.0x | 11.0x | $2.0M | $10.7M | 5.47x | 40.5% |
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
- 126 hospitals with 10-40 beds
- Same-state prioritization (n=127)
- Comp margins: P25=-15.8% / P50=-2.9% / P75=6.9%
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.