NASH HOSPITALS INC
1. Target Overview & Investment Thesis
NASH HOSPITALS INC is a 322-bed suburban community hospital in NASH, NC with $320.5M in net patient revenue and a 12.8% operating margin. The hospital serves a payer mix of 25.0% Medicare, 5.0% Medicaid, and 70.0% commercial.
Thesis: Platform Growth. Our ML models identify $23.6M in annual EBITDA improvement potential from RCM optimization across 5 levers, lifting margin from 12.8% to 20.1% (+736bps).
| Net Revenue HCRIS | $320.5M |
| Current EBITDA COMPUTED | $40.9M |
| Operating Margin COMPUTED | 12.8% |
| Occupancy HCRIS | 50.9% |
| Revenue / Bed COMPUTED | $995K |
| Net-to-Gross HCRIS | 27.3% |
| Distress Probability ML | 48.8% |
2. Market Context & Competitive Position
NC has 129 Medicare-certified hospitals with a median operating margin of -2.0%. The target's margin of 12.8% places it above the state median. Among 29 size-comparable peers (161-644 beds), the median margin is 1.4%. The target performs in line with or above peers.
3. RCM Performance Analysis — Comparable Hospitals
Comps selected by bed count (161-644), prioritizing same-state peers. 29 hospitals in the comp set.
| Hospital | State | Beds | Revenue | Margin |
|---|---|---|---|---|
| NASH HOSPITALS INC (Target) | NC | 322 | $320.5M | 12.8% |
| REX HOSPITAL | NC | 489 | $1.51B | -0.8% |
| PRESBYTERIAN HOSPITAL | NC | 561 | $1.33B | 1.0% |
| WAKEMED RALEIGH CAMPUS | NC | 609 | $1.15B | -1.4% |
| CAPE FEAR VALLEY MEDICAL CENTE | NC | 627 | $880.9M | -9.6% |
| FIRSTHEALTH MOORE REGIONAL HOS | NC | 412 | $813.8M | 8.8% |
| ATRIUM HEALTH CABARRUS | NC | 447 | $758.9M | 13.9% |
| DUKE RALEIGH HOSPITAL | NC | 186 | $683.0M | 3.7% |
| GASTON MEMORIAL HOSPITAL | NC | 424 | $641.8M | 7.0% |
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: $23.6M (736bps margin improvement).
| Lever | Current | Target | EBITDA Impact | Margin | Ramp |
|---|---|---|---|---|---|
| Net Collection Rate | 93.5% | 97.0% | $6.7M | +210bp | 18mo |
| Cost to Collect | 4.5% | 2.5% | $6.4M | +200bp | 12mo |
| Denial Rate Reduction | 12.0% | 6.5% | $6.3M | +198bp | 12mo |
| A/R Days Reduction | 5200.0% | 3800.0% | $3.9M | +122bp | 9mo |
| Clean Claim Rate | 88.0% | 96.0% | $205K | +6bp | 6mo |
5. EBITDA Bridge
| Current EBITDA | $40.9M |
| + RCM Uplift | +$23.6M |
| Pro Forma EBITDA | $64.5M |
| Current Margin | 12.8% |
| Pro Forma Margin | 20.1% |
| WC Released (1x) | $12.3M |
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 | $63.0M | $505.9M | 8.03x | 51.7% |
| Base (11x exit) | 10.0x | 11.0x | $63.0M | $577.0M | 9.16x | 55.7% |
| Bull Case | 9.0x | 11.0x | $56.7M | $675.3M | 11.91x | 64.1% |
| Bull (12x exit) | 9.0x | 12.0x | $56.7M | $753.4M | 13.29x | 67.8% |
| Bear Case | 11.0x | 10.0x | $69.3M | $367.5M | 5.31x | 39.6% |
| Bear (11x exit) | 11.0x | 11.0x | $69.3M | $426.8M | 6.16x | 43.9% |
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
- 29 hospitals with 161-644 beds
- Same-state prioritization (n=30)
- Comp margins: P25=-4.7% / P50=1.4% / P75=7.5%
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.