BEACON BEHAVIORAL HOSP CENTRAL
1. Target Overview & Investment Thesis
BEACON BEHAVIORAL HOSP CENTRAL is a 18-bed community hospital in AVOYELLES PARISH, LA with $5.2M in net patient revenue and a 12.3% operating margin. The hospital serves a payer mix of 11.1% Medicare, 0.0% Medicaid, and 88.9% commercial.
Thesis: Turnaround. Our ML models identify $393K in annual EBITDA improvement potential from RCM optimization across 5 levers, lifting margin from 12.3% to 19.8% (+759bps).
| Net Revenue HCRIS | $5.2M |
| Current EBITDA COMPUTED | $636K |
| Operating Margin COMPUTED | 12.3% |
| Occupancy HCRIS | 83.7% |
| Revenue / Bed COMPUTED | $288K |
| Net-to-Gross HCRIS | 49.3% |
| 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 12.3% places it above the state median. Among 106 size-comparable peers (9-36 beds), the median margin is -1.8%. The target performs in line with or above peers.
3. RCM Performance Analysis — Comparable Hospitals
Comps selected by bed count (9-36), prioritizing same-state peers. 106 hospitals in the comp set.
| Hospital | State | Beds | Revenue | Margin |
|---|---|---|---|---|
| BEACON BEHAVIORAL HOSP CENTRAL (Target) | LA | 18 | $5.2M | 12.3% |
| 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% |
| THE SPINE HOSPITAL OF LOUISIAN | LA | 23 | $57.4M | 35.4% |
| PARK PLACE SURGERY CENTER | LA | 10 | $51.6M | 15.4% |
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: $393K (759bps margin improvement).
| Lever | Current | Target | EBITDA Impact | Margin | Ramp |
|---|---|---|---|---|---|
| Net Collection Rate | 93.5% | 97.0% | $109K | +210bp | 18mo |
| Denial Rate Reduction | 12.0% | 6.5% | $108K | +208bp | 12mo |
| Cost to Collect | 4.5% | 2.5% | $104K | +200bp | 12mo |
| A/R Days Reduction | 5200.0% | 3800.0% | $63K | +122bp | 9mo |
| Clean Claim Rate | 88.0% | 96.0% | $10K | +19bp | 6mo |
5. EBITDA Bridge
| Current EBITDA | $636K |
| + RCM Uplift | +$393K |
| Pro Forma EBITDA | $1.0M |
| Current Margin | 12.3% |
| Pro Forma Margin | 19.8% |
| WC Released (1x) | $199K |
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 | $978K | $8.1M | 8.31x | 52.7% |
| Base (11x exit) | 10.0x | 11.0x | $978K | $9.3M | 9.47x | 56.8% |
| Bull Case | 9.0x | 11.0x | $880K | $10.9M | 12.35x | 65.3% |
| Bull (12x exit) | 9.0x | 12.0x | $880K | $12.1M | 13.77x | 69.0% |
| Bear Case | 11.0x | 10.0x | $1.1M | $5.8M | 5.43x | 40.3% |
| Bear (11x exit) | 11.0x | 11.0x | $1.1M | $6.8M | 6.30x | 44.5% |
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
- 106 hospitals with 9-36 beds
- Same-state prioritization (n=108)
- Comp margins: P25=-14.2% / P50=-1.8% / P75=7.5%
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.