ELLENVILLE REGIONAL HOSPITAL
1. Target Overview & Investment Thesis
ELLENVILLE REGIONAL HOSPITAL is a 25-bed rural/critical access in ULSTER, NY with $24.8M in net patient revenue and a -4.6% operating margin. The hospital serves a payer mix of 72.9% Medicare, 2.7% Medicaid, and 24.4% commercial.
Thesis: Turnaround. Our ML models identify $1.8M in annual EBITDA improvement potential from RCM optimization across 5 levers, lifting margin from -4.6% to 2.8% (+736bps).
| Net Revenue HCRIS | $24.8M |
| Current EBITDA COMPUTED | $-1.1M |
| Operating Margin COMPUTED | -4.6% |
| Occupancy HCRIS | 62.7% |
| Revenue / Bed COMPUTED | $994K |
| Net-to-Gross HCRIS | 45.3% |
| Distress Probability ML | 48.5% |
2. Market Context & Competitive Position
NY has 196 Medicare-certified hospitals with a median operating margin of -17.5%. The target's margin of -4.6% places it above the state median. Among 30 size-comparable peers (12-50 beds), the median margin is -17.8%. 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. 30 hospitals in the comp set.
| Hospital | State | Beds | Revenue | Margin |
|---|---|---|---|---|
| ELLENVILLE REGIONAL HOSPITAL (Target) | NY | 25 | $24.8M | -4.6% |
| NEW YORK EYE AND EAR INFIRMARY | NY | 15 | $112.8M | -28.0% |
| CLAXTON HEPBURN MEDICAL CENTER | NY | 38 | $106.9M | -16.0% |
| ALICE HYDE MEDICAL CENTER | NY | 40 | $79.7M | -29.4% |
| LEWIS COUNTY GENERAL HOSPITAL | NY | 25 | $70.3M | -17.6% |
| JONES MEMORIAL HOSPITAL | NY | 49 | $60.7M | -22.3% |
| CARTHAGE AREA HOSPITAL | NY | 25 | $59.4M | -12.3% |
| WYOMING COUNTY COMMUNITY HOSPI | NY | 47 | $58.1M | -42.1% |
| SUNNYVIEW HOSPITAL AND REHABIL | NY | 17 | $56.6M | -9.4% |
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: $1.8M (736bps margin improvement).
| Lever | Current | Target | EBITDA Impact | Margin | Ramp |
|---|---|---|---|---|---|
| Net Collection Rate | 93.5% | 97.0% | $522K | +210bp | 18mo |
| Cost to Collect | 4.5% | 2.5% | $497K | +200bp | 12mo |
| Denial Rate Reduction | 12.0% | 6.5% | $492K | +198bp | 12mo |
| A/R Days Reduction | 5200.0% | 3800.0% | $302K | +122bp | 9mo |
| Clean Claim Rate | 88.0% | 96.0% | $16K | +6bp | 6mo |
5. EBITDA Bridge
| Current EBITDA | $-1.1M |
| + RCM Uplift | +$1.8M |
| Pro Forma EBITDA | $693K |
| Current Margin | -4.6% |
| Pro Forma Margin | 2.8% |
| WC Released (1x) | $953K |
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 | $-1.7M | $10.8M | 0.00x | -100.0% |
| Base (11x exit) | 10.0x | 11.0x | $-1.7M | $11.3M | 0.00x | -100.0% |
| Bull Case | 9.0x | 11.0x | $-1.6M | $16.8M | 0.00x | -100.0% |
| Bull (12x exit) | 9.0x | 12.0x | $-1.6M | $17.8M | 0.00x | -100.0% |
| Bear Case | 11.0x | 10.0x | $-1.9M | $2.2M | 0.00x | -100.0% |
| Bear (11x exit) | 11.0x | 11.0x | $-1.9M | $1.8M | 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 | Heavy Medicare dependence | Medicare comprises 72.9% of days; rate updates may lag inflation. Mitigant: CDI/CMI lever directly increases Medicare reimbursement |
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
- 30 hospitals with 12-50 beds
- Same-state prioritization (n=31)
- Comp margins: P25=-28.0% / P50=-17.8% / P75=-10.5%
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.