MYMICHIGAN MEDICAL CENTER ALPENA
1. Target Overview & Investment Thesis
MYMICHIGAN MEDICAL CENTER ALPENA is a 128-bed suburban community hospital in ALPENA, MI with $237.2M in net patient revenue and a 6.0% operating margin. The hospital serves a payer mix of 30.8% Medicare, 4.7% Medicaid, and 64.5% commercial.
Thesis: Turnaround. Our ML models identify $17.5M in annual EBITDA improvement potential from RCM optimization across 5 levers, lifting margin from 6.0% to 13.4% (+736bps).
| Net Revenue HCRIS | $237.2M |
| Current EBITDA COMPUTED | $14.2M |
| Operating Margin COMPUTED | 6.0% |
| Occupancy HCRIS | 33.2% |
| Revenue / Bed COMPUTED | $1.9M |
| Net-to-Gross HCRIS | 35.2% |
| Distress Probability ML | 52.0% |
2. Market Context & Competitive Position
MI has 163 Medicare-certified hospitals with a median operating margin of -5.2%. The target's margin of 6.0% places it above the state median. Among 51 size-comparable peers (64-256 beds), the median margin is -7.0%. The target performs in line with or above peers.
3. RCM Performance Analysis — Comparable Hospitals
Comps selected by bed count (64-256), prioritizing same-state peers. 51 hospitals in the comp set.
| Hospital | State | Beds | Revenue | Margin |
|---|---|---|---|---|
| MYMICHIGAN MEDICAL CENTER ALPE (Target) | MI | 128 | $237.2M | 6.0% |
| MYMICHIGAN MEDICAL CENTER MIDL | MI | 195 | $537.8M | -9.6% |
| METROPOLITAN HOSPITAL | MI | 201 | $512.0M | -11.3% |
| LAKELAND MEDICAL CENTER ST. J | MI | 235 | $488.2M | -3.6% |
| HENRY FORD WEST BLOOMFIELD HOS | MI | 191 | $446.0M | 5.5% |
| BEAUMONT HOSPITAL- FARMINGTON | MI | 225 | $434.2M | 3.3% |
| CHILDRENS HOSPITAL OF MICHIGAN | MI | 227 | $393.0M | -0.4% |
| TRINITY HEALTH - LIVONIA | MI | 239 | $384.4M | -6.7% |
| MCLAREN GREATER LANSING | MI | 185 | $384.2M | -9.8% |
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: $17.5M (736bps margin improvement).
| Lever | Current | Target | EBITDA Impact | Margin | Ramp |
|---|---|---|---|---|---|
| Net Collection Rate | 93.5% | 97.0% | $5.0M | +210bp | 18mo |
| Cost to Collect | 4.5% | 2.5% | $4.7M | +200bp | 12mo |
| Denial Rate Reduction | 12.0% | 6.5% | $4.7M | +198bp | 12mo |
| A/R Days Reduction | 5200.0% | 3800.0% | $2.9M | +122bp | 9mo |
| Clean Claim Rate | 88.0% | 96.0% | $152K | +6bp | 6mo |
5. EBITDA Bridge
| Current EBITDA | $14.2M |
| + RCM Uplift | +$17.5M |
| Pro Forma EBITDA | $31.7M |
| Current Margin | 6.0% |
| Pro Forma Margin | 13.4% |
| WC Released (1x) | $9.1M |
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 | $21.9M | $268.4M | 12.27x | 65.1% |
| Base (11x exit) | 10.0x | 11.0x | $21.9M | $302.4M | 13.82x | 69.1% |
| Bull Case | 9.0x | 11.0x | $19.7M | $367.1M | 18.64x | 79.5% |
| Bull (12x exit) | 9.0x | 12.0x | $19.7M | $406.3M | 20.63x | 83.2% |
| Bear Case | 11.0x | 10.0x | $24.1M | $174.0M | 7.23x | 48.5% |
| Bear (11x exit) | 11.0x | 11.0x | $24.1M | $199.2M | 8.28x | 52.6% |
7. Key Risks & Mitigants
| Severity | Risk Factor | Mitigant |
|---|---|---|
| Medium | Low occupancy | At 33.2%, fixed costs are spread over fewer patient days. Mitigant: volume growth is an additional upside lever not modeled in base case |
| High | Elevated distress probability | Model estimates 52.0% 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
- 51 hospitals with 64-256 beds
- Same-state prioritization (n=52)
- Comp margins: P25=-13.5% / P50=-7.0% / P75=0.0%
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.