CONCORD HOSPITAL - FRANKLIN
1. Target Overview & Investment Thesis
CONCORD HOSPITAL - FRANKLIN is a 25-bed community hospital in MERRIMACK, NH with $29.0M in net patient revenue and a 7.3% operating margin. The hospital serves a payer mix of 22.7% Medicare, 0.0% Medicaid, and 77.3% commercial.
Thesis: Turnaround. Our ML models identify $2.1M in annual EBITDA improvement potential from RCM optimization across 5 levers, lifting margin from 7.3% to 14.7% (+736bps).
| Net Revenue HCRIS | $29.0M |
| Current EBITDA COMPUTED | $2.1M |
| Operating Margin COMPUTED | 7.3% |
| Occupancy HCRIS | 47.8% |
| Revenue / Bed COMPUTED | $1.2M |
| Net-to-Gross HCRIS | 39.5% |
| Distress Probability ML | nan% |
2. Market Context & Competitive Position
NH has 30 Medicare-certified hospitals with a median operating margin of -2.7%. The target's margin of 7.3% places it above the state median. Among 13 size-comparable peers (12-50 beds), the median margin is -2.3%. The target performs in line with or above peers.
3. RCM Performance Analysis — Comparable Hospitals
Comps selected by bed count (12-50), prioritizing same-state peers. 13 hospitals in the comp set.
| Hospital | State | Beds | Revenue | Margin |
|---|---|---|---|---|
| CONCORD HOSPITAL - FRANKLIN (Target) | NH | 25 | $29.0M | 7.3% |
| LITTLETON REGIONAL HEALTHCARE | NH | 25 | $98.2M | -10.4% |
| MEMORIAL HOSPITAL | NH | 25 | $97.7M | 1.3% |
| ALICE PECK DAY MEMORIAL HOSPIT | NH | 24 | $94.3M | -1.5% |
| NEW LONDON HOSPITAL | NH | 25 | $87.9M | 0.5% |
| HUGGINS HOSPITAL | NH | 25 | $86.3M | -8.3% |
| MONADNOCK COMMUNITY HOSPITAL | NH | 25 | $85.8M | -9.4% |
| ANDROSCOGGIN VALLEY HOSPITAL | NH | 25 | $72.7M | -2.3% |
| SPEARE MEMORIAL HOSPITAL | NH | 25 | $72.5M | -6.1% |
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: $2.1M (736bps margin improvement).
| Lever | Current | Target | EBITDA Impact | Margin | Ramp |
|---|---|---|---|---|---|
| Net Collection Rate | 93.5% | 97.0% | $609K | +210bp | 18mo |
| Cost to Collect | 4.5% | 2.5% | $580K | +200bp | 12mo |
| Denial Rate Reduction | 12.0% | 6.5% | $574K | +198bp | 12mo |
| A/R Days Reduction | 5200.0% | 3800.0% | $353K | +122bp | 9mo |
| Clean Claim Rate | 88.0% | 96.0% | $19K | +6bp | 6mo |
5. EBITDA Bridge
| Current EBITDA | $2.1M |
| + RCM Uplift | +$2.1M |
| Pro Forma EBITDA | $4.3M |
| Current Margin | 7.3% |
| Pro Forma Margin | 14.7% |
| WC Released (1x) | $1.1M |
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 | $3.3M | $35.4M | 10.80x | 61.0% |
| Base (11x exit) | 10.0x | 11.0x | $3.3M | $40.0M | 12.21x | 64.9% |
| Bull Case | 9.0x | 11.0x | $3.0M | $48.1M | 16.31x | 74.8% |
| Bull (12x exit) | 9.0x | 12.0x | $3.0M | $53.4M | 18.09x | 78.4% |
| Bear Case | 11.0x | 10.0x | $3.6M | $23.7M | 6.56x | 45.7% |
| Bear (11x exit) | 11.0x | 11.0x | $3.6M | $27.2M | 7.54x | 49.8% |
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
- 13 hospitals with 12-50 beds
- Same-state prioritization (n=14)
- Comp margins: P25=-8.4% / P50=-2.3% / P75=0.3%
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.