WILSON MEMORIAL HOSPITAL
1. Target Overview & Investment Thesis
WILSON MEMORIAL HOSPITAL is a 71-bed under-performing / distressed in SHELBY, OH with $88.3M in net patient revenue and a -6.9% operating margin. The hospital serves a payer mix of 27.8% Medicare, 7.6% Medicaid, and 64.6% commercial.
Thesis: Turnaround. Our ML models identify $6.5M in annual EBITDA improvement potential from RCM optimization across 5 levers, lifting margin from -6.9% to 0.4% (+736bps).
| Net Revenue HCRIS | $88.3M |
| Current EBITDA COMPUTED | $-6.1M |
| Operating Margin COMPUTED | -6.9% |
| Occupancy HCRIS | 26.7% |
| Revenue / Bed COMPUTED | $1.2M |
| Net-to-Gross HCRIS | 31.2% |
| Distress Probability ML | 54.4% |
2. Market Context & Competitive Position
OH has 235 Medicare-certified hospitals with a median operating margin of -0.3%. The target's margin of -6.9% places it below the state median. Among 93 size-comparable peers (36-142 beds), the median margin is 1.4%. The target's below-peer margin suggests operational improvement opportunity.
3. RCM Performance Analysis — Comparable Hospitals
Comps selected by bed count (36-142), prioritizing same-state peers. 93 hospitals in the comp set.
| Hospital | State | Beds | Revenue | Margin |
|---|---|---|---|---|
| WILSON MEMORIAL HOSPITAL (Target) | OH | 71 | $88.3M | -6.9% |
| DUBLIN METHODIST HOSPITAL | OH | 110 | $333.9M | 28.4% |
| SOIN MEDICAL CENTER | OH | 120 | $256.3M | -1.3% |
| LIMA MEMORIAL HOSPITAL | OH | 110 | $253.5M | 6.4% |
| UH ST. JOHN MEDICAL CENTER | OH | 126 | $210.9M | 6.5% |
| KNOX COMMUNITY HOSPITAL | OH | 64 | $196.0M | -16.7% |
| ST. JOSEPH HEALTH CENTER | OH | 135 | $194.2M | 5.8% |
| UH GEAUGA MEDICAL CENTER | OH | 106 | $183.3M | 6.9% |
| CLEVELAND CLINIC AVON HOSPITAL | OH | 126 | $178.3M | 16.3% |
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: $6.5M (736bps margin improvement).
| Lever | Current | Target | EBITDA Impact | Margin | Ramp |
|---|---|---|---|---|---|
| Net Collection Rate | 93.5% | 97.0% | $1.9M | +210bp | 18mo |
| Cost to Collect | 4.5% | 2.5% | $1.8M | +200bp | 12mo |
| Denial Rate Reduction | 12.0% | 6.5% | $1.7M | +198bp | 12mo |
| A/R Days Reduction | 5200.0% | 3800.0% | $1.1M | +122bp | 9mo |
| Clean Claim Rate | 88.0% | 96.0% | $57K | +6bp | 6mo |
5. EBITDA Bridge
| Current EBITDA | $-6.1M |
| + RCM Uplift | +$6.5M |
| Pro Forma EBITDA | $395K |
| Current Margin | -6.9% |
| Pro Forma Margin | 0.4% |
| WC Released (1x) | $3.4M |
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 | $-9.4M | $24.7M | 0.00x | -100.0% |
| Base (11x exit) | 10.0x | 11.0x | $-9.4M | $24.2M | 0.00x | -100.0% |
| Bull Case | 9.0x | 11.0x | $-8.5M | $42.6M | 0.00x | -100.0% |
| Bull (12x exit) | 9.0x | 12.0x | $-8.5M | $43.9M | 0.00x | -100.0% |
| Bear Case | 11.0x | 10.0x | $-10.3M | $-4.7M | 0.00x | -100.0% |
| Bear (11x exit) | 11.0x | 11.0x | $-10.3M | $-8.5M | 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 26.7%, 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 54.4% 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
- 93 hospitals with 36-142 beds
- Same-state prioritization (n=94)
- Comp margins: P25=-14.0% / P50=1.4% / P75=9.6%
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 27, 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.