SSH -SAGINAW INC.
1. Target Overview & Investment Thesis
SSH -SAGINAW INC. is a 32-bed community hospital in SAGINAW, MI with $15.8M in net patient revenue and a 9.9% operating margin. The hospital serves a payer mix of 35.7% Medicare, 0.0% Medicaid, and 64.3% commercial.
Thesis: Turnaround. Our ML models identify $1.2M in annual EBITDA improvement potential from RCM optimization across 5 levers, lifting margin from 9.9% to 17.2% (+736bps).
| Net Revenue HCRIS | $15.8M |
| Current EBITDA COMPUTED | $1.6M |
| Operating Margin COMPUTED | 9.9% |
| Occupancy HCRIS | 63.5% |
| Revenue / Bed COMPUTED | $493K |
| Net-to-Gross HCRIS | 14.2% |
| Distress Probability ML | nan% |
2. Market Context & Competitive Position
MI has 163 Medicare-certified hospitals with a median operating margin of -5.2%. The target's margin of 9.9% places it above the state median. Among 71 size-comparable peers (16-64 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 (16-64), prioritizing same-state peers. 71 hospitals in the comp set.
| Hospital | State | Beds | Revenue | Margin |
|---|---|---|---|---|
| SSH -SAGINAW INC. (Target) | MI | 32 | $15.8M | 9.9% |
| TRINITY HEALTH LIVINGSTON | MI | 42 | $200.4M | 15.2% |
| MYMICHIGAN MEDICAL CENTER ALMA | MI | 49 | $142.2M | -5.9% |
| SPECTRUM HEALTH UNITED MEMORIA | MI | 45 | $129.4M | 9.7% |
| DICKINSON COUNTY HEALTHCARE SY | MI | 49 | $126.3M | -4.7% |
| PROMEDICA HICKMAN HOSPITAL | MI | 58 | $124.7M | 5.5% |
| MUNSON HEALTHCARE CADILLAC HOS | MI | 49 | $122.7M | 1.0% |
| MCLAREN CENTRAL MICHIGAN | MI | 49 | $118.9M | -35.3% |
| SPECTRUM HEALTH GERBER | MI | 25 | $116.2M | 16.0% |
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: $1.2M (736bps margin improvement).
| Lever | Current | Target | EBITDA Impact | Margin | Ramp |
|---|---|---|---|---|---|
| Net Collection Rate | 93.5% | 97.0% | $331K | +210bp | 18mo |
| Cost to Collect | 4.5% | 2.5% | $316K | +200bp | 12mo |
| Denial Rate Reduction | 12.0% | 6.5% | $312K | +198bp | 12mo |
| A/R Days Reduction | 5200.0% | 3800.0% | $192K | +122bp | 9mo |
| Clean Claim Rate | 88.0% | 96.0% | $10K | +6bp | 6mo |
5. EBITDA Bridge
| Current EBITDA | $1.6M |
| + RCM Uplift | +$1.2M |
| Pro Forma EBITDA | $2.7M |
| Current Margin | 9.9% |
| Pro Forma Margin | 17.2% |
| WC Released (1x) | $605K |
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 | $2.4M | $21.9M | 9.14x | 55.7% |
| Base (11x exit) | 10.0x | 11.0x | $2.4M | $24.8M | 10.38x | 59.7% |
| Bull Case | 9.0x | 11.0x | $2.2M | $29.5M | 13.67x | 68.7% |
| Bull (12x exit) | 9.0x | 12.0x | $2.2M | $32.8M | 15.21x | 72.4% |
| Bear Case | 11.0x | 10.0x | $2.6M | $15.3M | 5.81x | 42.2% |
| Bear (11x exit) | 11.0x | 11.0x | $2.6M | $17.7M | 6.71x | 46.4% |
7. Key Risks & Mitigants
| Severity | Risk Factor | Mitigant |
|---|---|---|
| Low | Low net-to-gross ratio | Large contractual allowances suggest pricing discipline issues. Mitigant: payer renegotiation is an additional upside lever |
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
- 71 hospitals with 16-64 beds
- Same-state prioritization (n=72)
- Comp margins: P25=-11.1% / P50=-3.3% / P75=8.3%
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.