BELTON REGIONAL MEDICAL CENTER
1. Target Overview & Investment Thesis
BELTON REGIONAL MEDICAL CENTER is a 62-bed suburban community hospital in CASS, MO with $92.1M in net patient revenue and a 17.2% operating margin. The hospital serves a payer mix of 30.5% Medicare, 9.3% Medicaid, and 60.1% commercial.
Thesis: Turnaround. Our ML models identify $6.8M in annual EBITDA improvement potential from RCM optimization across 5 levers, lifting margin from 17.2% to 24.5% (+736bps).
| Net Revenue HCRIS | $92.1M |
| Current EBITDA COMPUTED | $15.8M |
| Operating Margin COMPUTED | 17.2% |
| Occupancy HCRIS | 59.0% |
| Revenue / Bed COMPUTED | $1.5M |
| Net-to-Gross HCRIS | 11.7% |
| Distress Probability ML | 44.9% |
2. Market Context & Competitive Position
MO has 138 Medicare-certified hospitals with a median operating margin of -6.2%. The target's margin of 17.2% places it above the state median. Among 48 size-comparable peers (31-124 beds), the median margin is -7.4%. The target performs in line with or above peers.
3. RCM Performance Analysis — Comparable Hospitals
Comps selected by bed count (31-124), prioritizing same-state peers. 48 hospitals in the comp set.
| Hospital | State | Beds | Revenue | Margin |
|---|---|---|---|---|
| BELTON REGIONAL MEDICAL CENTER (Target) | MO | 62 | $92.1M | 17.2% |
| LAKE REGIONAL HEALTH SYSTEM | MO | 105 | $226.8M | -2.7% |
| HANNIBAL REGIONAL HOSPITAL | MO | 86 | $226.2M | -6.8% |
| CAPITAL REGION MEDICAL CENTER | MO | 100 | $224.0M | -17.7% |
| BARNES JEWISH WEST COUNTY HOSP | MO | 68 | $221.1M | 4.9% |
| SAINT LUKES NORTH HOSPITAL | MO | 108 | $183.6M | -6.4% |
| CITIZENS MEMORIAL HOSPITAL DIS | MO | 52 | $178.3M | -19.3% |
| BARNES JEWISH ST. PETERS HOSPI | MO | 110 | $177.0M | 2.7% |
| UNIVERSITY HEALTH LAKEWOOD MED | MO | 117 | $158.8M | -34.6% |
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: $6.8M (736bps margin improvement).
| Lever | Current | Target | EBITDA Impact | Margin | Ramp |
|---|---|---|---|---|---|
| Net Collection Rate | 93.5% | 97.0% | $1.9M | +210bp | 18mo |
| Cost to Collect | 4.5% | 2.5% | $1.8M | +200bp | 12mo |
| Denial Rate Reduction | 12.0% | 6.5% | $1.8M | +198bp | 12mo |
| A/R Days Reduction | 5200.0% | 3800.0% | $1.1M | +122bp | 9mo |
| Clean Claim Rate | 88.0% | 96.0% | $59K | +6bp | 6mo |
5. EBITDA Bridge
| Current EBITDA | $15.8M |
| + RCM Uplift | +$6.8M |
| Pro Forma EBITDA | $22.6M |
| Current Margin | 17.2% |
| Pro Forma Margin | 24.5% |
| WC Released (1x) | $3.5M |
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 | $24.3M | $172.0M | 7.08x | 47.9% |
| Base (11x exit) | 10.0x | 11.0x | $24.3M | $197.1M | 8.11x | 52.0% |
| Bull Case | 9.0x | 11.0x | $21.9M | $227.3M | 10.39x | 59.7% |
| Bull (12x exit) | 9.0x | 12.0x | $21.9M | $254.4M | 11.63x | 63.4% |
| Bear Case | 11.0x | 10.0x | $26.7M | $130.2M | 4.87x | 37.2% |
| Bear (11x exit) | 11.0x | 11.0x | $26.7M | $151.9M | 5.68x | 41.5% |
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
- 48 hospitals with 31-124 beds
- Same-state prioritization (n=49)
- Comp margins: P25=-16.7% / P50=-7.4% / P75=8.7%
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.