MAPLE GROVE HOSPITAL
1. Target Overview & Investment Thesis
MAPLE GROVE HOSPITAL is a 148-bed suburban community hospital in HENNEPIN, MN with $249.5M in net patient revenue and a 13.5% operating margin. The hospital serves a payer mix of 8.6% Medicare, 9.3% Medicaid, and 82.1% commercial.
Thesis: Turnaround. Our ML models identify $18.4M in annual EBITDA improvement potential from RCM optimization across 5 levers, lifting margin from 13.5% to 20.9% (+736bps).
| Net Revenue HCRIS | $249.5M |
| Current EBITDA COMPUTED | $33.8M |
| Operating Margin COMPUTED | 13.5% |
| Occupancy HCRIS | 81.2% |
| Revenue / Bed COMPUTED | $1.7M |
| Net-to-Gross HCRIS | 43.6% |
| Distress Probability ML | 42.4% |
2. Market Context & Competitive Position
MN has 141 Medicare-certified hospitals with a median operating margin of -3.6%. The target's margin of 13.5% places it above the state median. Among 16 size-comparable peers (74-296 beds), the median margin is -7.1%. The target performs in line with or above peers.
3. RCM Performance Analysis — Comparable Hospitals
Comps selected by bed count (74-296), prioritizing same-state peers. 16 hospitals in the comp set.
| Hospital | State | Beds | Revenue | Margin |
|---|---|---|---|---|
| MAPLE GROVE HOSPITAL (Target) | MN | 148 | $249.5M | 13.5% |
| SMDC MEDICAL CENTER | MN | 118 | $519.2M | -7.1% |
| ST. LUKES HOSPITAL OF DULUTH | MN | 238 | $494.0M | -9.3% |
| MCHS - SOUTHWEST MINNESOTA REG | MN | 118 | $473.6M | -9.8% |
| HEALTHEAST ST JOHNS HOSPITAL | MN | 184 | $375.8M | -7.7% |
| FAIRVIEW RIDGES HOSPITAL | MN | 172 | $316.2M | 7.0% |
| SANFORD BEMIDJI | MN | 94 | $312.6M | -19.6% |
| RIDGEVIEW MEDICAL CENTER | MN | 109 | $287.8M | -14.2% |
| ST. JOSEPHS MEDICAL CENTER | MN | 127 | $283.3M | -0.0% |
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: $18.4M (736bps margin improvement).
| Lever | Current | Target | EBITDA Impact | Margin | Ramp |
|---|---|---|---|---|---|
| Net Collection Rate | 93.5% | 97.0% | $5.2M | +210bp | 18mo |
| Cost to Collect | 4.5% | 2.5% | $5.0M | +200bp | 12mo |
| Denial Rate Reduction | 12.0% | 6.5% | $4.9M | +198bp | 12mo |
| A/R Days Reduction | 5200.0% | 3800.0% | $3.0M | +122bp | 9mo |
| Clean Claim Rate | 88.0% | 96.0% | $160K | +6bp | 6mo |
5. EBITDA Bridge
| Current EBITDA | $33.8M |
| + RCM Uplift | +$18.4M |
| Pro Forma EBITDA | $52.2M |
| Current Margin | 13.5% |
| Pro Forma Margin | 20.9% |
| WC Released (1x) | $9.6M |
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 | $52.0M | $406.6M | 7.82x | 50.9% |
| Base (11x exit) | 10.0x | 11.0x | $52.0M | $464.1M | 8.93x | 54.9% |
| Bull Case | 9.0x | 11.0x | $46.8M | $541.6M | 11.58x | 63.2% |
| Bull (12x exit) | 9.0x | 12.0x | $46.8M | $604.6M | 12.92x | 66.8% |
| Bear Case | 11.0x | 10.0x | $57.2M | $297.8M | 5.21x | 39.1% |
| Bear (11x exit) | 11.0x | 11.0x | $57.2M | $346.2M | 6.05x | 43.4% |
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
- 16 hospitals with 74-296 beds
- Same-state prioritization (n=17)
- Comp margins: P25=-10.6% / P50=-7.1% / P75=-1.0%
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.