LOGAN HEALTH MEDICAL CENTER
1. Target Overview & Investment Thesis
LOGAN HEALTH MEDICAL CENTER is a 210-bed suburban community hospital in nan, MT with $587.5M in net patient revenue and a 7.7% operating margin. The hospital serves a payer mix of 23.0% Medicare, 24.4% Medicaid, and 52.6% commercial.
Thesis: Platform Growth. Our ML models identify $43.2M in annual EBITDA improvement potential from RCM optimization across 5 levers, lifting margin from 7.7% to 15.1% (+736bps).
| Net Revenue HCRIS | $587.5M |
| Current EBITDA COMPUTED | $45.5M |
| Operating Margin COMPUTED | 7.7% |
| Occupancy HCRIS | 62.1% |
| Revenue / Bed COMPUTED | $2.8M |
| Net-to-Gross HCRIS | 44.1% |
| Distress Probability ML | 49.8% |
2. Market Context & Competitive Position
MT has 66 Medicare-certified hospitals with a median operating margin of -9.6%. The target's margin of 7.7% places it above the state median. Among 8 size-comparable peers (105-420 beds), the median margin is -11.9%. The target performs in line with or above peers.
3. RCM Performance Analysis — Comparable Hospitals
Comps selected by bed count (105-420), prioritizing same-state peers. 8 hospitals in the comp set.
| Hospital | State | Beds | Revenue | Margin |
|---|---|---|---|---|
| LOGAN HEALTH MEDICAL CENTER (Target) | MT | 210 | $587.5M | 7.7% |
| BILLINGS CLINIC | MT | 334 | $871.5M | -17.3% |
| ST VINCENT HEALTHCARE | MT | 226 | $549.8M | -18.4% |
| BENEFIS HOSPITALS INC. | MT | 312 | $528.1M | -5.3% |
| ST PATRICK HOSPITAL | MT | 206 | $396.8M | -6.2% |
| BOZEMAN DEACONESS HEALTH SERVI | MT | 124 | $395.6M | -13.0% |
| ST. PETERS HOSPITAL | MT | 125 | $289.2M | -10.8% |
| COMMUNITY MEDICAL CENTER | MT | 141 | $238.2M | 7.8% |
| MONTANA STATE HOSPITAL | MT | 174 | $39.1M | -16.1% |
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: $43.2M (736bps margin improvement).
| Lever | Current | Target | EBITDA Impact | Margin | Ramp |
|---|---|---|---|---|---|
| Net Collection Rate | 93.5% | 97.0% | $12.3M | +210bp | 18mo |
| Cost to Collect | 4.5% | 2.5% | $11.8M | +200bp | 12mo |
| Denial Rate Reduction | 12.0% | 6.5% | $11.6M | +198bp | 12mo |
| A/R Days Reduction | 5200.0% | 3800.0% | $7.1M | +122bp | 9mo |
| Clean Claim Rate | 88.0% | 96.0% | $376K | +6bp | 6mo |
5. EBITDA Bridge
| Current EBITDA | $45.5M |
| + RCM Uplift | +$43.2M |
| Pro Forma EBITDA | $88.7M |
| Current Margin | 7.7% |
| Pro Forma Margin | 15.1% |
| WC Released (1x) | $22.5M |
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 | $70.0M | $732.4M | 10.47x | 60.0% |
| Base (11x exit) | 10.0x | 11.0x | $70.0M | $828.3M | 11.84x | 63.9% |
| Bull Case | 9.0x | 11.0x | $63.0M | $993.8M | 15.79x | 73.6% |
| Bull (12x exit) | 9.0x | 12.0x | $63.0M | $1.10B | 17.52x | 77.3% |
| Bear Case | 11.0x | 10.0x | $76.9M | $493.4M | 6.41x | 45.0% |
| Bear (11x exit) | 11.0x | 11.0x | $76.9M | $567.8M | 7.38x | 49.1% |
7. Key Risks & Mitigants
| Severity | Risk Factor | Mitigant |
|---|---|---|
| Medium | Elevated Medicaid exposure (24.4%) | 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
- 8 hospitals with 105-420 beds
- Same-state prioritization (n=9)
- Comp margins: P25=-16.4% / P50=-11.9% / P75=-6.0%
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.