HOLY NAME HOSPITAL
1. Target Overview & Investment Thesis
HOLY NAME HOSPITAL is a 289-bed suburban community hospital in BERGEN, NJ with $493.4M in net patient revenue and a 8.1% operating margin. The hospital serves a payer mix of 32.6% Medicare, 0.9% Medicaid, and 66.5% commercial.
Thesis: Platform Growth. Our ML models identify $36.3M in annual EBITDA improvement potential from RCM optimization across 5 levers, lifting margin from 8.1% to 15.5% (+736bps).
| Net Revenue HCRIS | $493.4M |
| Current EBITDA COMPUTED | $39.9M |
| Operating Margin COMPUTED | 8.1% |
| Occupancy HCRIS | 51.5% |
| Revenue / Bed COMPUTED | $1.7M |
| Net-to-Gross HCRIS | 27.8% |
| Distress Probability ML | 46.9% |
2. Market Context & Competitive Position
NJ has 95 Medicare-certified hospitals with a median operating margin of -3.9%. The target's margin of 8.1% places it above the state median. Among 49 size-comparable peers (144-578 beds), the median margin is -5.7%. The target performs in line with or above peers.
3. RCM Performance Analysis — Comparable Hospitals
Comps selected by bed count (144-578), prioritizing same-state peers. 49 hospitals in the comp set.
| Hospital | State | Beds | Revenue | Margin |
|---|---|---|---|---|
| HOLY NAME HOSPITAL (Target) | NJ | 289 | $493.4M | 8.1% |
| COOPERMAN BARNABAS MEDICAL CEN | NJ | 554 | $1.07B | -4.3% |
| ENGLEWOOD HOSPITAL & MED CTR | NJ | 292 | $967.3M | 0.1% |
| THE VALLEY HOSPITAL | NJ | 385 | $951.8M | 17.5% |
| OVERLOOK MEDICAL CENTER | NJ | 440 | $880.2M | 8.9% |
| ATLANTICARE REGIONAL MEDICAL C | NJ | 532 | $791.4M | 2.3% |
| CAPITAL HEALTH MED CENTER - HO | NJ | 209 | $746.8M | 0.8% |
| KENNEDY UNIVERSITY HOSPITAL | NJ | 546 | $724.5M | -8.5% |
| UH - UNIVERSITY HOSPITAL | NJ | 358 | $702.0M | -27.5% |
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: $36.3M (736bps margin improvement).
| Lever | Current | Target | EBITDA Impact | Margin | Ramp |
|---|---|---|---|---|---|
| Net Collection Rate | 93.5% | 97.0% | $10.4M | +210bp | 18mo |
| Cost to Collect | 4.5% | 2.5% | $9.9M | +200bp | 12mo |
| Denial Rate Reduction | 12.0% | 6.5% | $9.8M | +198bp | 12mo |
| A/R Days Reduction | 5200.0% | 3800.0% | $6.0M | +122bp | 9mo |
| Clean Claim Rate | 88.0% | 96.0% | $316K | +6bp | 6mo |
5. EBITDA Bridge
| Current EBITDA | $39.9M |
| + RCM Uplift | +$36.3M |
| Pro Forma EBITDA | $76.2M |
| Current Margin | 8.1% |
| Pro Forma Margin | 15.5% |
| WC Released (1x) | $18.9M |
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 | $61.4M | $626.5M | 10.20x | 59.1% |
| Base (11x exit) | 10.0x | 11.0x | $61.4M | $709.1M | 11.55x | 63.1% |
| Bull Case | 9.0x | 11.0x | $55.3M | $848.9M | 15.36x | 72.7% |
| Bull (12x exit) | 9.0x | 12.0x | $55.3M | $942.4M | 17.05x | 76.3% |
| Bear Case | 11.0x | 10.0x | $67.6M | $424.9M | 6.29x | 44.5% |
| Bear (11x exit) | 11.0x | 11.0x | $67.6M | $489.4M | 7.24x | 48.6% |
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
- 49 hospitals with 144-578 beds
- Same-state prioritization (n=50)
- Comp margins: P25=-14.8% / P50=-5.7% / P75=2.1%
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.