BELLEVUE MEDICAL CENTER
1. Target Overview & Investment Thesis
BELLEVUE MEDICAL CENTER is a 69-bed suburban community hospital in SARPY, NE with $112.8M in net patient revenue and a 11.2% operating margin. The hospital serves a payer mix of 45.9% Medicare, 1.4% Medicaid, and 52.7% commercial.
Thesis: Turnaround. Our ML models identify $8.3M in annual EBITDA improvement potential from RCM optimization across 5 levers, lifting margin from 11.2% to 18.5% (+736bps).
| Net Revenue HCRIS | $112.8M |
| Current EBITDA COMPUTED | $12.6M |
| Operating Margin COMPUTED | 11.2% |
| Occupancy HCRIS | 69.0% |
| Revenue / Bed COMPUTED | $1.6M |
| Net-to-Gross HCRIS | 25.4% |
| Distress Probability ML | 42.6% |
2. Market Context & Competitive Position
NE has 98 Medicare-certified hospitals with a median operating margin of -6.3%. The target's margin of 11.2% places it above the state median. Among 18 size-comparable peers (34-138 beds), the median margin is -8.8%. The target performs in line with or above peers.
3. RCM Performance Analysis — Comparable Hospitals
Comps selected by bed count (34-138), prioritizing same-state peers. 18 hospitals in the comp set.
| Hospital | State | Beds | Revenue | Margin |
|---|---|---|---|---|
| BELLEVUE MEDICAL CENTER (Target) | NE | 69 | $112.8M | 11.2% |
| GREAT PLAINS HEALTH | NE | 96 | $268.8M | 3.9% |
| REGIONAL WEST MEDICAL CENTER | NE | 122 | $218.4M | -12.9% |
| CHI HEALTH LAKESIDE | NE | 125 | $200.3M | 15.3% |
| MARY LANNING MEMORIAL HOSPITAL | NE | 97 | $200.0M | -8.9% |
| FAITH REGIONAL HEALTH SERVICES | NE | 122 | $198.1M | 10.1% |
| MADONNA REHABILITATION LTC HOS | NE | 77 | $177.1M | -8.8% |
| MADONNA REHAB OMAHA LTC HOSPIT | NE | 67 | $177.1M | -8.8% |
| MADONNA REHABILITATION HOSPITA | NE | 67 | $177.1M | -8.8% |
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: $8.3M (736bps margin improvement).
| Lever | Current | Target | EBITDA Impact | Margin | Ramp |
|---|---|---|---|---|---|
| Net Collection Rate | 93.5% | 97.0% | $2.4M | +210bp | 18mo |
| Cost to Collect | 4.5% | 2.5% | $2.3M | +200bp | 12mo |
| Denial Rate Reduction | 12.0% | 6.5% | $2.2M | +198bp | 12mo |
| A/R Days Reduction | 5200.0% | 3800.0% | $1.4M | +122bp | 9mo |
| Clean Claim Rate | 88.0% | 96.0% | $72K | +6bp | 6mo |
5. EBITDA Bridge
| Current EBITDA | $12.6M |
| + RCM Uplift | +$8.3M |
| Pro Forma EBITDA | $20.9M |
| Current Margin | 11.2% |
| Pro Forma Margin | 18.5% |
| WC Released (1x) | $4.3M |
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 | $19.4M | $166.1M | 8.57x | 53.7% |
| Base (11x exit) | 10.0x | 11.0x | $19.4M | $188.9M | 9.76x | 57.7% |
| Bull Case | 9.0x | 11.0x | $17.4M | $222.6M | 12.77x | 66.4% |
| Bull (12x exit) | 9.0x | 12.0x | $17.4M | $248.0M | 14.23x | 70.1% |
| Bear Case | 11.0x | 10.0x | $21.3M | $118.3M | 5.55x | 40.9% |
| Bear (11x exit) | 11.0x | 11.0x | $21.3M | $137.0M | 6.43x | 45.1% |
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
- 18 hospitals with 34-138 beds
- Same-state prioritization (n=19)
- Comp margins: P25=-12.3% / P50=-8.8% / P75=2.6%
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.