ELLIOT HOSPITAL
1. Target Overview & Investment Thesis
ELLIOT HOSPITAL is a 215-bed suburban community hospital in HILLSBOROUGH, NH with $660.8M in net patient revenue and a 14.5% operating margin. The hospital serves a payer mix of 25.7% Medicare, 5.7% Medicaid, and 68.6% commercial.
Thesis: Platform Growth. Our ML models identify $48.6M in annual EBITDA improvement potential from RCM optimization across 5 levers, lifting margin from 14.5% to 21.9% (+736bps).
| Net Revenue HCRIS | $660.8M |
| Current EBITDA COMPUTED | $95.8M |
| Operating Margin COMPUTED | 14.5% |
| Occupancy HCRIS | 88.3% |
| Revenue / Bed COMPUTED | $3.1M |
| Net-to-Gross HCRIS | 40.1% |
| Distress Probability ML | 38.5% |
2. Market Context & Competitive Position
NH has 30 Medicare-certified hospitals with a median operating margin of -2.7%. The target's margin of 14.5% places it above the state median. Among 8 size-comparable peers (108-430 beds), the median margin is -0.8%. The target performs in line with or above peers.
3. RCM Performance Analysis — Comparable Hospitals
Comps selected by bed count (108-430), prioritizing same-state peers. 8 hospitals in the comp set.
| Hospital | State | Beds | Revenue | Margin |
|---|---|---|---|---|
| ELLIOT HOSPITAL (Target) | NH | 215 | $660.8M | 14.5% |
| CONCORD HOSPITAL INC. | NH | 206 | $553.5M | -5.1% |
| WENTWORTH DOUGLASS HOSPITAL | NH | 118 | $500.9M | 10.7% |
| CATHOLIC MEDICAL CENTER | NH | 262 | $470.4M | -4.2% |
| PORTSMOUTH REGIONAL HOSPITAL | NH | 168 | $347.4M | 45.5% |
| SOUTHERN NH MEDICAL CENTER | NH | 138 | $293.0M | -0.8% |
| ST. JOSEPH HOSPITAL | NH | 160 | $236.2M | -15.1% |
| NORTHEAST REHABILITATION HOSPI | NH | 135 | $102.7M | -0.2% |
| NEW HAMPSHIRE HOSPITAL | NH | 184 | $nan | nan% |
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: $48.6M (736bps margin improvement).
| Lever | Current | Target | EBITDA Impact | Margin | Ramp |
|---|---|---|---|---|---|
| Net Collection Rate | 93.5% | 97.0% | $13.9M | +210bp | 18mo |
| Cost to Collect | 4.5% | 2.5% | $13.2M | +200bp | 12mo |
| Denial Rate Reduction | 12.0% | 6.5% | $13.1M | +198bp | 12mo |
| A/R Days Reduction | 5200.0% | 3800.0% | $8.0M | +122bp | 9mo |
| Clean Claim Rate | 88.0% | 96.0% | $423K | +6bp | 6mo |
5. EBITDA Bridge
| Current EBITDA | $95.8M |
| + RCM Uplift | +$48.6M |
| Pro Forma EBITDA | $144.4M |
| Current Margin | 14.5% |
| Pro Forma Margin | 21.9% |
| WC Released (1x) | $25.3M |
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 | $147.4M | $1.12B | 7.59x | 50.0% |
| Base (11x exit) | 10.0x | 11.0x | $147.4M | $1.28B | 8.67x | 54.0% |
| Bull Case | 9.0x | 11.0x | $132.7M | $1.49B | 11.21x | 62.1% |
| Bull (12x exit) | 9.0x | 12.0x | $132.7M | $1.66B | 12.52x | 65.8% |
| Bear Case | 11.0x | 10.0x | $162.1M | $827.3M | 5.10x | 38.5% |
| Bear (11x exit) | 11.0x | 11.0x | $162.1M | $962.7M | 5.94x | 42.8% |
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
- 8 hospitals with 108-430 beds
- Same-state prioritization (n=9)
- Comp margins: P25=-4.6% / P50=-0.8% / P75=5.3%
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.