COOPERSTOWN MEDICAL CENTER
1. Target Overview & Investment Thesis
COOPERSTOWN MEDICAL CENTER is a 9-bed rural/critical access in GRIGGS, ND with $5.3M in net patient revenue and a -32.3% operating margin. The hospital serves a payer mix of 55.3% Medicare, 2.9% Medicaid, and 41.8% commercial.
Thesis: Turnaround. Our ML models identify $403K in annual EBITDA improvement potential from RCM optimization across 5 levers, lifting margin from -32.3% to -24.7% (+758bps).
| Net Revenue HCRIS | $5.3M |
| Current EBITDA COMPUTED | $-1.7M |
| Operating Margin COMPUTED | -32.3% |
| Occupancy HCRIS | 16.2% |
| Revenue / Bed COMPUTED | $591K |
| Net-to-Gross HCRIS | 80.5% |
| Distress Probability ML | 62.8% |
2. Market Context & Competitive Position
ND has 52 Medicare-certified hospitals with a median operating margin of -9.3%. The target's margin of -32.3% places it below the state median. Among 9 size-comparable peers (4-18 beds), the median margin is -4.8%. The target's below-peer margin suggests operational improvement opportunity.
3. RCM Performance Analysis — Comparable Hospitals
Comps selected by bed count (4-18), prioritizing same-state peers. 9 hospitals in the comp set.
| Hospital | State | Beds | Revenue | Margin |
|---|---|---|---|---|
| COOPERSTOWN MEDICAL CENTER (Target) | ND | 9 | $5.3M | -32.3% |
| UNITY MEDICAL CENTER | ND | 14 | $25.7M | -0.5% |
| FIRST CARE HEALTH CENTER | ND | 14 | $17.9M | -2.2% |
| SAKAKAWEA MEDICAL CENTER | ND | 13 | $15.5M | -5.1% |
| SANFORD HILLSBORO | ND | 16 | $15.4M | 2.2% |
| NORTHWOOD DEACONESS HEALTH CEN | ND | 12 | $14.7M | -4.8% |
| MOUNTRAIL COUNTY MEDICAL CENTE | ND | 11 | $13.3M | -12.2% |
| LINTON HOSPITAL | ND | 14 | $9.1M | -22.0% |
| STANDING ROCK IHS HOSPITAL | ND | 12 | $nan | nan% |
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: $403K (758bps margin improvement).
| Lever | Current | Target | EBITDA Impact | Margin | Ramp |
|---|---|---|---|---|---|
| Net Collection Rate | 93.5% | 97.0% | $112K | +210bp | 18mo |
| Denial Rate Reduction | 12.0% | 6.5% | $111K | +208bp | 12mo |
| Cost to Collect | 4.5% | 2.5% | $106K | +200bp | 12mo |
| A/R Days Reduction | 5200.0% | 3800.0% | $65K | +122bp | 9mo |
| Clean Claim Rate | 88.0% | 96.0% | $10K | +18bp | 6mo |
5. EBITDA Bridge
| Current EBITDA | $-1.7M |
| + RCM Uplift | +$403K |
| Pro Forma EBITDA | $-1.3M |
| Current Margin | -32.3% |
| Pro Forma Margin | -24.7% |
| WC Released (1x) | $204K |
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 | $-2.6M | $-7.3M | 0.00x | -100.0% |
| Base (11x exit) | 10.0x | 11.0x | $-2.6M | $-8.9M | 0.00x | -100.0% |
| Bull Case | 9.0x | 11.0x | $-2.4M | $-8.4M | 0.00x | -100.0% |
| Bull (12x exit) | 9.0x | 12.0x | $-2.4M | $-9.9M | 0.00x | -100.0% |
| Bear Case | 11.0x | 10.0x | $-2.9M | $-8.4M | 0.00x | -100.0% |
| Bear (11x exit) | 11.0x | 11.0x | $-2.9M | $-10.2M | 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 55.3% of days; rate updates may lag inflation. Mitigant: CDI/CMI lever directly increases Medicare reimbursement |
| Medium | Low occupancy | At 16.2%, 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 62.8% 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
- 9 hospitals with 4-18 beds
- Same-state prioritization (n=10)
- Comp margins: P25=-8.6% / P50=-4.8% / P75=-1.4%
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.