SSH - JACKSON INC
1. Target Overview & Investment Thesis
SSH - JACKSON INC is a 53-bed community hospital in HINDS, MS with $29.5M in net patient revenue and a -5.4% operating margin. The hospital serves a payer mix of 48.4% Medicare, 0.0% Medicaid, and 51.6% commercial.
Thesis: Turnaround. Our ML models identify $2.2M in annual EBITDA improvement potential from RCM optimization across 5 levers, lifting margin from -5.4% to 2.0% (+736bps).
| Net Revenue HCRIS | $29.5M |
| Current EBITDA COMPUTED | $-1.6M |
| Operating Margin COMPUTED | -5.4% |
| Occupancy HCRIS | 86.3% |
| Revenue / Bed COMPUTED | $557K |
| Net-to-Gross HCRIS | 14.5% |
| 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 -5.4% places it above the state median. Among 41 size-comparable peers (26-106 beds), the median margin is -12.7%. The target performs in line with or above peers.
3. RCM Performance Analysis — Comparable Hospitals
Comps selected by bed count (26-106), prioritizing same-state peers. 41 hospitals in the comp set.
| Hospital | State | Beds | Revenue | Margin |
|---|---|---|---|---|
| SSH - JACKSON INC (Target) | MS | 53 | $29.5M | -5.4% |
| SOUTHWEST MS REGIONAL MED CENT | MS | 97 | $123.1M | -16.0% |
| BAPTIST MEM HOSPITAL UNION COU | MS | 83 | $117.9M | 3.7% |
| DELTA HEALTH-THE MEDICAL CENTE | MS | 101 | $112.1M | -26.9% |
| SINGING RIVER GULFPORT | MS | 100 | $92.5M | -12.7% |
| METHODIST H/C OLIVE BRANCH HOS | MS | 65 | $75.4M | -25.6% |
| MISSISSIPPI METHODIST REHAB CE | MS | 31 | $68.1M | -0.5% |
| UMMC-GRENADA | MS | 49 | $63.7M | 7.1% |
| OKTIBBEHA COUNTY HOSPITAL | MS | 88 | $63.2M | -16.5% |
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: $2.2M (736bps margin improvement).
| Lever | Current | Target | EBITDA Impact | Margin | Ramp |
|---|---|---|---|---|---|
| Net Collection Rate | 93.5% | 97.0% | $620K | +210bp | 18mo |
| Cost to Collect | 4.5% | 2.5% | $591K | +200bp | 12mo |
| Denial Rate Reduction | 12.0% | 6.5% | $585K | +198bp | 12mo |
| A/R Days Reduction | 5200.0% | 3800.0% | $359K | +122bp | 9mo |
| Clean Claim Rate | 88.0% | 96.0% | $19K | +6bp | 6mo |
5. EBITDA Bridge
| Current EBITDA | $-1.6M |
| + RCM Uplift | +$2.2M |
| Pro Forma EBITDA | $588K |
| Current Margin | -5.4% |
| Pro Forma Margin | 2.0% |
| WC Released (1x) | $1.1M |
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 | $-2.4M | $11.3M | 0.00x | -100.0% |
| Base (11x exit) | 10.0x | 11.0x | $-2.4M | $11.6M | 0.00x | -100.0% |
| Bull Case | 9.0x | 11.0x | $-2.2M | $18.0M | 0.00x | -100.0% |
| Bull (12x exit) | 9.0x | 12.0x | $-2.2M | $19.0M | 0.00x | -100.0% |
| Bear Case | 11.0x | 10.0x | $-2.7M | $1.2M | 0.00x | -100.0% |
| Bear (11x exit) | 11.0x | 11.0x | $-2.7M | $448K | 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 |
| 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
- 41 hospitals with 26-106 beds
- Same-state prioritization (n=42)
- Comp margins: P25=-24.1% / P50=-12.7% / P75=1.7%
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.