OSAGE BEACH CENTER FOR COGNITIVE DIS
1. Target Overview & Investment Thesis
OSAGE BEACH CENTER FOR COGNITIVE DIS is a 16-bed safety-net/medicaid heavy in CAMDEN, MO with $4.7M in net patient revenue and a 11.4% operating margin. The hospital serves a payer mix of 8.5% Medicare, 25.8% Medicaid, and 65.6% commercial.
Thesis: Turnaround. Our ML models identify $361K in annual EBITDA improvement potential from RCM optimization across 5 levers, lifting margin from 11.4% to 19.0% (+762bps).
| Net Revenue HCRIS | $4.7M |
| Current EBITDA COMPUTED | $539K |
| Operating Margin COMPUTED | 11.4% |
| Occupancy HCRIS | 83.7% |
| Revenue / Bed COMPUTED | $296K |
| Net-to-Gross HCRIS | 42.9% |
| Distress Probability ML | 47.4% |
2. Market Context & Competitive Position
MO has 138 Medicare-certified hospitals with a median operating margin of -6.2%. The target's margin of 11.4% places it above the state median. Among 41 size-comparable peers (8-32 beds), the median margin is -9.5%. The target performs in line with or above peers.
3. RCM Performance Analysis — Comparable Hospitals
Comps selected by bed count (8-32), prioritizing same-state peers. 41 hospitals in the comp set.
| Hospital | State | Beds | Revenue | Margin |
|---|---|---|---|---|
| OSAGE BEACH CENTER FOR COGNITI (Target) | MO | 16 | $4.7M | 11.4% |
| CASS REGIONAL MEDICAL CENTER | MO | 25 | $89.9M | 5.4% |
| MISSOURI BAPTIST SULLIVAN HOSP | MO | 25 | $73.4M | 2.7% |
| MOSAIC MEDICAL CENTER - MARYVI | MO | 29 | $73.3M | -40.5% |
| HEDRICK MEDICAL CENTER | MO | 25 | $63.8M | 5.4% |
| COX-MONETT HOSPITAL | MO | 25 | $63.8M | 8.2% |
| STE. GENEVIEVE CO. MEMORIAL HO | MO | 25 | $61.0M | -6.8% |
| PERRY COUNTY MEMORIAL HOSPITAL | MO | 25 | $60.8M | -9.3% |
| MERCY HOSPITAL CARTHAGE | MO | 25 | $58.4M | 7.9% |
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: $361K (762bps margin improvement).
| Lever | Current | Target | EBITDA Impact | Margin | Ramp |
|---|---|---|---|---|---|
| Net Collection Rate | 93.5% | 97.0% | $100K | +210bp | 18mo |
| Denial Rate Reduction | 12.0% | 6.5% | $100K | +210bp | 12mo |
| Cost to Collect | 4.5% | 2.5% | $95K | +200bp | 12mo |
| A/R Days Reduction | 5200.0% | 3800.0% | $58K | +122bp | 9mo |
| Clean Claim Rate | 88.0% | 96.0% | $10K | +20bp | 6mo |
5. EBITDA Bridge
| Current EBITDA | $539K |
| + RCM Uplift | +$361K |
| Pro Forma EBITDA | $901K |
| Current Margin | 11.4% |
| Pro Forma Margin | 19.0% |
| WC Released (1x) | $182K |
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 | $830K | $7.2M | 8.64x | 53.9% |
| Base (11x exit) | 10.0x | 11.0x | $830K | $8.2M | 9.83x | 57.9% |
| Bull Case | 9.0x | 11.0x | $747K | $9.6M | 12.88x | 66.7% |
| Bull (12x exit) | 9.0x | 12.0x | $747K | $10.7M | 14.34x | 70.3% |
| Bear Case | 11.0x | 10.0x | $913K | $5.1M | 5.58x | 41.0% |
| Bear (11x exit) | 11.0x | 11.0x | $913K | $5.9M | 6.46x | 45.2% |
7. Key Risks & Mitigants
| Severity | Risk Factor | Mitigant |
|---|---|---|
| Medium | Elevated Medicaid exposure (25.8%) | Medicaid reimburses below cost in most states. Mitigant: denial reduction lever has highest impact on Medicaid claims |
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 8-32 beds
- Same-state prioritization (n=42)
- Comp margins: P25=-17.8% / P50=-9.5% / P75=-1.6%
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.