JEFFERSON COUNTY HOSPITAL
1. Target Overview & Investment Thesis
JEFFERSON COUNTY HOSPITAL is a 12-bed community hospital in JEFFERSON, MS with $6.9M in net patient revenue and a -55.2% operating margin. The hospital serves a payer mix of 35.6% Medicare, 0.0% Medicaid, and 64.4% commercial.
Thesis: Turnaround. Our ML models identify $515K in annual EBITDA improvement potential from RCM optimization across 5 levers, lifting margin from -55.2% to -47.7% (+750bps).
| Net Revenue HCRIS | $6.9M |
| Current EBITDA COMPUTED | $-3.8M |
| Operating Margin COMPUTED | -55.2% |
| Occupancy HCRIS | 50.0% |
| Revenue / Bed COMPUTED | $572K |
| Net-to-Gross HCRIS | 35.6% |
| Distress Probability ML | nan% |
2. Market Context & Competitive Position
MS has 110 Medicare-certified hospitals with a median operating margin of -12.5%. The target's margin of -55.2% places it below the state median. Among 17 size-comparable peers (6-24 beds), the median margin is -21.2%. The target's below-peer margin suggests operational improvement opportunity.
3. RCM Performance Analysis — Comparable Hospitals
Comps selected by bed count (6-24), prioritizing same-state peers. 17 hospitals in the comp set.
| Hospital | State | Beds | Revenue | Margin |
|---|---|---|---|---|
| JEFFERSON COUNTY HOSPITAL (Target) | MS | 12 | $6.9M | -55.2% |
| KINGS DAUGHTERS MEDICAL CENTER | MS | 22 | $91.5M | -8.4% |
| PANOLA MEDICAL CENTER | MS | 21 | $33.4M | -21.8% |
| TALLAHATCHIE CRITICAL ACCESS H | MS | 18 | $30.9M | -6.7% |
| WINSTON MEDICAL CENTER | MS | 14 | $24.4M | -22.6% |
| FIELD MEMORIAL COMMUNITY HOSPI | MS | 16 | $21.3M | -19.6% |
| CHOCTAW REGIONAL MEDICAL CENTE | MS | 15 | $20.5M | -12.5% |
| PEARL RIVER COUNTY HOSPITAL | MS | 24 | $18.4M | -14.0% |
| JASPER GENERAL HOSPITAL | MS | 20 | $15.0M | -13.8% |
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: $515K (750bps margin improvement).
| Lever | Current | Target | EBITDA Impact | Margin | Ramp |
|---|---|---|---|---|---|
| Net Collection Rate | 93.5% | 97.0% | $144K | +210bp | 18mo |
| Denial Rate Reduction | 12.0% | 6.5% | $140K | +205bp | 12mo |
| Cost to Collect | 4.5% | 2.5% | $137K | +200bp | 12mo |
| A/R Days Reduction | 5200.0% | 3800.0% | $84K | +122bp | 9mo |
| Clean Claim Rate | 88.0% | 96.0% | $10K | +14bp | 6mo |
5. EBITDA Bridge
| Current EBITDA | $-3.8M |
| + RCM Uplift | +$515K |
| Pro Forma EBITDA | $-3.3M |
| Current Margin | -55.2% |
| Pro Forma Margin | -47.7% |
| WC Released (1x) | $263K |
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 | $-5.8M | $-19.9M | 0.00x | -100.0% |
| Base (11x exit) | 10.0x | 11.0x | $-5.8M | $-23.7M | 0.00x | -100.0% |
| Bull Case | 9.0x | 11.0x | $-5.3M | $-23.9M | 0.00x | -100.0% |
| Bull (12x exit) | 9.0x | 12.0x | $-5.3M | $-27.7M | 0.00x | -100.0% |
| Bear Case | 11.0x | 10.0x | $-6.4M | $-20.5M | 0.00x | -100.0% |
| Bear (11x exit) | 11.0x | 11.0x | $-6.4M | $-24.7M | 0.00x | -100.0% |
7. Key Risks & Mitigants
| Severity | Risk Factor | Mitigant |
|---|---|---|
| High | Negative operating margin | RCM uplift bridge shows clear path to profitability; working capital release provides near-term cash cushion |
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
- 17 hospitals with 6-24 beds
- Same-state prioritization (n=19)
- Comp margins: P25=-36.4% / P50=-21.2% / P75=-13.5%
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.