OSWEGO HOSPITAL
1. Target Overview & Investment Thesis
OSWEGO HOSPITAL is a 132-bed under-performing / distressed in OSWEGO, NY with $123.3M in net patient revenue and a -28.3% operating margin. The hospital serves a payer mix of 28.6% Medicare, 2.4% Medicaid, and 69.0% commercial.
Thesis: Undervalued. Our ML models identify $9.1M in annual EBITDA improvement potential from RCM optimization across 5 levers, lifting margin from -28.3% to -20.9% (+736bps).
| Net Revenue HCRIS | $123.3M |
| Current EBITDA COMPUTED | $-34.9M |
| Operating Margin COMPUTED | -28.3% |
| Occupancy HCRIS | 30.2% |
| Revenue / Bed COMPUTED | $934K |
| Net-to-Gross HCRIS | 37.8% |
| Distress Probability ML | 53.7% |
2. Market Context & Competitive Position
NY has 196 Medicare-certified hospitals with a median operating margin of -17.5%. The target's margin of -28.3% places it below the state median. Among 88 size-comparable peers (66-264 beds), the median margin is -15.3%. The target's below-peer margin suggests operational improvement opportunity.
3. RCM Performance Analysis — Comparable Hospitals
Comps selected by bed count (66-264), prioritizing same-state peers. 88 hospitals in the comp set.
| Hospital | State | Beds | Revenue | Margin |
|---|---|---|---|---|
| OSWEGO HOSPITAL (Target) | NY | 132 | $123.3M | -28.3% |
| HOSPITAL FOR SPECIAL SURGERY | NY | 200 | $1.12B | -29.3% |
| ROSWELL PARK CANCER INSTITUTE | NY | 142 | $772.3M | -40.1% |
| QUEENS HOSPITAL CENTER | NY | 200 | $637.2M | 4.9% |
| NYC HEALTH + HOSPITAL / SOUTH | NY | 252 | $588.5M | -16.5% |
| WOODHULL HOSPITAL CENTER | NY | 238 | $529.9M | -8.6% |
| MARY IMOGENE BASSETT HOSPITAL | NY | 160 | $529.1M | -31.6% |
| HARLEM HOSPITAL CENTER | NY | 217 | $519.6M | -22.9% |
| HIGHLAND HOSPITAL | NY | 261 | $456.8M | -11.0% |
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: $9.1M (736bps margin improvement).
| Lever | Current | Target | EBITDA Impact | Margin | Ramp |
|---|---|---|---|---|---|
| Net Collection Rate | 93.5% | 97.0% | $2.6M | +210bp | 18mo |
| Cost to Collect | 4.5% | 2.5% | $2.5M | +200bp | 12mo |
| Denial Rate Reduction | 12.0% | 6.5% | $2.4M | +198bp | 12mo |
| A/R Days Reduction | 5200.0% | 3800.0% | $1.5M | +122bp | 9mo |
| Clean Claim Rate | 88.0% | 96.0% | $79K | +6bp | 6mo |
5. EBITDA Bridge
| Current EBITDA | $-34.9M |
| + RCM Uplift | +$9.1M |
| Pro Forma EBITDA | $-25.8M |
| Current Margin | -28.3% |
| Pro Forma Margin | -20.9% |
| WC Released (1x) | $4.7M |
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 | $-53.7M | $-139.3M | 0.00x | -100.0% |
| Base (11x exit) | 10.0x | 11.0x | $-53.7M | $-170.6M | 0.00x | -100.0% |
| Bull Case | 9.0x | 11.0x | $-48.3M | $-158.1M | 0.00x | -100.0% |
| Bull (12x exit) | 9.0x | 12.0x | $-48.3M | $-186.8M | 0.00x | -100.0% |
| Bear Case | 11.0x | 10.0x | $-59.0M | $-167.2M | 0.00x | -100.0% |
| Bear (11x exit) | 11.0x | 11.0x | $-59.0M | $-203.1M | 0.00x | -100.0% |
7. Key Risks & Mitigants
| Severity | Risk Factor | Mitigant |
|---|---|---|
| High | Negative operating margin | RCM uplift bridge shows clear path to profitability; working capital release provides near-term cash cushion |
| Medium | Low occupancy | At 30.2%, fixed costs are spread over fewer patient days. Mitigant: volume growth is an additional upside lever not modeled in base case |
| High | Elevated distress probability | Model estimates 53.7% probability of financial distress. Mitigant: distressed entry pricing (7-9x) compensates for risk |
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
- 88 hospitals with 66-264 beds
- Same-state prioritization (n=89)
- Comp margins: P25=-26.4% / P50=-15.3% / P75=-9.1%
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.