BAPTIST MEM HOSPITAL GOLDEN TRIANGLE
1. Target Overview & Investment Thesis
BAPTIST MEM HOSPITAL GOLDEN TRIANGLE is a 154-bed suburban community hospital in LOWNDES, MS with $221.1M in net patient revenue and a 6.9% operating margin. The hospital serves a payer mix of 43.9% Medicare, 6.6% Medicaid, and 49.5% commercial.
Thesis: Turnaround. Our ML models identify $16.3M in annual EBITDA improvement potential from RCM optimization across 5 levers, lifting margin from 6.9% to 14.3% (+736bps).
| Net Revenue HCRIS | $221.1M |
| Current EBITDA COMPUTED | $15.3M |
| Operating Margin COMPUTED | 6.9% |
| Occupancy HCRIS | 53.7% |
| Revenue / Bed COMPUTED | $1.4M |
| Net-to-Gross HCRIS | 22.6% |
| Distress Probability ML | 47.6% |
2. Market Context & Competitive Position
MS has 110 Medicare-certified hospitals with a median operating margin of -12.5%. The target's margin of 6.9% places it above the state median. Among 29 size-comparable peers (77-308 beds), the median margin is -4.7%. The target performs in line with or above peers.
3. RCM Performance Analysis — Comparable Hospitals
Comps selected by bed count (77-308), prioritizing same-state peers. 29 hospitals in the comp set.
| Hospital | State | Beds | Revenue | Margin |
|---|---|---|---|---|
| BAPTIST MEM HOSPITAL GOLDEN TR (Target) | MS | 154 | $221.1M | 6.9% |
| MEMORIAL HOSPITAL AT GULFPORT | MS | 278 | $700.2M | -15.7% |
| SINGING RIVER HEALTH SYSTEM | MS | 294 | $415.9M | -12.8% |
| BAPTIST MEM HOSPITAL DESOTO | MS | 298 | $301.6M | -5.2% |
| BAPTIST MEM HOSPITAL NORTH MIS | MS | 195 | $229.4M | 0.7% |
| JEFF ANDERSON REGIONAL MEDICAL | MS | 270 | $213.3M | -25.9% |
| MAGNOLIA HOSPITAL | MS | 158 | $161.6M | -4.7% |
| SOUTH CENTRAL REGIONAL MEDICAL | MS | 268 | $146.9M | -1.3% |
| CENTRAL MISSISSIPPI MEDICAL CE | MS | 226 | $142.2M | -12.4% |
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: $16.3M (736bps margin improvement).
| Lever | Current | Target | EBITDA Impact | Margin | Ramp |
|---|---|---|---|---|---|
| Net Collection Rate | 93.5% | 97.0% | $4.6M | +210bp | 18mo |
| Cost to Collect | 4.5% | 2.5% | $4.4M | +200bp | 12mo |
| Denial Rate Reduction | 12.0% | 6.5% | $4.4M | +198bp | 12mo |
| A/R Days Reduction | 5200.0% | 3800.0% | $2.7M | +122bp | 9mo |
| Clean Claim Rate | 88.0% | 96.0% | $141K | +6bp | 6mo |
5. EBITDA Bridge
| Current EBITDA | $15.3M |
| + RCM Uplift | +$16.3M |
| Pro Forma EBITDA | $31.6M |
| Current Margin | 6.9% |
| Pro Forma Margin | 14.3% |
| WC Released (1x) | $8.5M |
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 | $23.6M | $263.9M | 11.18x | 62.1% |
| Base (11x exit) | 10.0x | 11.0x | $23.6M | $298.0M | 12.63x | 66.1% |
| Bull Case | 9.0x | 11.0x | $21.2M | $359.3M | 16.92x | 76.1% |
| Bull (12x exit) | 9.0x | 12.0x | $21.2M | $398.3M | 18.75x | 79.7% |
| Bear Case | 11.0x | 10.0x | $26.0M | $174.9M | 6.74x | 46.5% |
| Bear (11x exit) | 11.0x | 11.0x | $26.0M | $200.8M | 7.74x | 50.6% |
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
- 29 hospitals with 77-308 beds
- Same-state prioritization (n=30)
- Comp margins: P25=-15.7% / P50=-4.7% / P75=1.4%
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.