SSH WILLINGBORO
1. Target Overview & Investment Thesis
SSH WILLINGBORO is a 69-bed community hospital in BURLINGTON, NJ with $32.9M in net patient revenue and a 9.2% operating margin. The hospital serves a payer mix of 59.9% Medicare, 0.0% Medicaid, and 40.1% commercial.
Thesis: Turnaround. Our ML models identify $2.4M in annual EBITDA improvement potential from RCM optimization across 5 levers, lifting margin from 9.2% to 16.5% (+736bps).
| Net Revenue HCRIS | $32.9M |
| Current EBITDA COMPUTED | $3.0M |
| Operating Margin COMPUTED | 9.2% |
| Occupancy HCRIS | 53.4% |
| Revenue / Bed COMPUTED | $477K |
| Net-to-Gross HCRIS | 12.6% |
| Distress Probability ML | nan% |
2. Market Context & Competitive Position
NJ has 95 Medicare-certified hospitals with a median operating margin of -3.9%. The target's margin of 9.2% places it above the state median. Among 32 size-comparable peers (34-138 beds), the median margin is -4.6%. 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. 32 hospitals in the comp set.
| Hospital | State | Beds | Revenue | Margin |
|---|---|---|---|---|
| SSH WILLINGBORO (Target) | NJ | 69 | $32.9M | 9.2% |
| DEBORAH HEART AND LUNG CENTER | NJ | 85 | $211.9M | -5.5% |
| ST LUKES WARREN HOSPITAL | NJ | 92 | $200.8M | 28.1% |
| BERGEN NEW BRIDGE MEDICAL CENT | NJ | 101 | $187.0M | -39.4% |
| ST. MARYS HOSPITAL - PASSAIC | NJ | 122 | $173.8M | 0.9% |
| HUDSON REGIONAL HOSPITAL | NJ | 102 | $152.7M | 2.4% |
| CHILDRENS SPECIALIZED HOPSITAL | NJ | 68 | $150.1M | -18.1% |
| HACKENSACK UMC AT PASCACK VALL | NJ | 78 | $148.8M | 15.0% |
| BAYONNE MEDICAL CENTER | NJ | 131 | $141.4M | -25.9% |
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: $2.4M (736bps margin improvement).
| Lever | Current | Target | EBITDA Impact | Margin | Ramp |
|---|---|---|---|---|---|
| Net Collection Rate | 93.5% | 97.0% | $692K | +210bp | 18mo |
| Cost to Collect | 4.5% | 2.5% | $659K | +200bp | 12mo |
| Denial Rate Reduction | 12.0% | 6.5% | $652K | +198bp | 12mo |
| A/R Days Reduction | 5200.0% | 3800.0% | $401K | +122bp | 9mo |
| Clean Claim Rate | 88.0% | 96.0% | $21K | +6bp | 6mo |
5. EBITDA Bridge
| Current EBITDA | $3.0M |
| + RCM Uplift | +$2.4M |
| Pro Forma EBITDA | $5.4M |
| Current Margin | 9.2% |
| Pro Forma Margin | 16.5% |
| WC Released (1x) | $1.3M |
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 | $4.6M | $44.2M | 9.50x | 56.9% |
| Base (11x exit) | 10.0x | 11.0x | $4.6M | $50.1M | 10.78x | 60.9% |
| Bull Case | 9.0x | 11.0x | $4.2M | $59.6M | 14.25x | 70.1% |
| Bull (12x exit) | 9.0x | 12.0x | $4.2M | $66.3M | 15.84x | 73.8% |
| Bear Case | 11.0x | 10.0x | $5.1M | $30.5M | 5.97x | 43.0% |
| Bear (11x exit) | 11.0x | 11.0x | $5.1M | $35.3M | 6.90x | 47.1% |
7. Key Risks & Mitigants
| Severity | Risk Factor | Mitigant |
|---|---|---|
| Medium | Heavy Medicare dependence | Medicare comprises 59.9% of days; rate updates may lag inflation. Mitigant: CDI/CMI lever directly increases Medicare reimbursement |
| Low | Low net-to-gross ratio | Large contractual allowances suggest pricing discipline issues. Mitigant: payer renegotiation is an additional upside lever |
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
- 32 hospitals with 34-138 beds
- Same-state prioritization (n=33)
- Comp margins: P25=-28.9% / P50=-4.6% / P75=2.5%
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.