BERGER HOSPITAL
1. Target Overview & Investment Thesis
BERGER HOSPITAL is a 83-bed suburban community hospital in PICKAWAY, OH with $111.6M in net patient revenue and a 14.4% operating margin. The hospital serves a payer mix of 24.3% Medicare, 5.9% Medicaid, and 69.8% commercial.
Thesis: Turnaround. Our ML models identify $8.2M in annual EBITDA improvement potential from RCM optimization across 5 levers, lifting margin from 14.4% to 21.8% (+736bps).
| Net Revenue HCRIS | $111.6M |
| Current EBITDA COMPUTED | $16.1M |
| Operating Margin COMPUTED | 14.4% |
| Occupancy HCRIS | 33.6% |
| Revenue / Bed COMPUTED | $1.3M |
| Net-to-Gross HCRIS | 35.4% |
| Distress Probability ML | 52.6% |
2. Market Context & Competitive Position
OH has 235 Medicare-certified hospitals with a median operating margin of -0.3%. The target's margin of 14.4% places it above the state median. Among 95 size-comparable peers (42-166 beds), the median margin is 2.7%. The target performs in line with or above peers.
3. RCM Performance Analysis — Comparable Hospitals
Comps selected by bed count (42-166), prioritizing same-state peers. 95 hospitals in the comp set.
| Hospital | State | Beds | Revenue | Margin |
|---|---|---|---|---|
| BERGER HOSPITAL (Target) | OH | 83 | $111.6M | 14.4% |
| DUBLIN METHODIST HOSPITAL | OH | 110 | $333.9M | 28.4% |
| WEST CHESTER HOSPITAL LLC | OH | 163 | $318.7M | -12.3% |
| BLANCHARD VALLEY REG. HEALTH C | OH | 152 | $310.1M | 22.8% |
| SOIN MEDICAL CENTER | OH | 120 | $256.3M | -1.3% |
| LIMA MEMORIAL HOSPITAL | OH | 110 | $253.5M | 6.4% |
| UH AHUJA MEDICAL CENTER | OH | 153 | $249.4M | 3.3% |
| TRINITY HOSPITAL HOLDING COMPA | OH | 162 | $244.3M | -13.3% |
| FIRELANDS REGIONAL MEDICAL CEN | OH | 146 | $238.4M | -13.9% |
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: $8.2M (736bps margin improvement).
| Lever | Current | Target | EBITDA Impact | Margin | Ramp |
|---|---|---|---|---|---|
| Net Collection Rate | 93.5% | 97.0% | $2.3M | +210bp | 18mo |
| Cost to Collect | 4.5% | 2.5% | $2.2M | +200bp | 12mo |
| Denial Rate Reduction | 12.0% | 6.5% | $2.2M | +198bp | 12mo |
| A/R Days Reduction | 5200.0% | 3800.0% | $1.4M | +122bp | 9mo |
| Clean Claim Rate | 88.0% | 96.0% | $71K | +6bp | 6mo |
5. EBITDA Bridge
| Current EBITDA | $16.1M |
| + RCM Uplift | +$8.2M |
| Pro Forma EBITDA | $24.3M |
| Current Margin | 14.4% |
| Pro Forma Margin | 21.8% |
| WC Released (1x) | $4.3M |
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 | $24.8M | $188.3M | 7.61x | 50.0% |
| Base (11x exit) | 10.0x | 11.0x | $24.8M | $215.2M | 8.69x | 54.1% |
| Bull Case | 9.0x | 11.0x | $22.3M | $250.3M | 11.23x | 62.2% |
| Bull (12x exit) | 9.0x | 12.0x | $22.3M | $279.7M | 12.55x | 65.9% |
| Bear Case | 11.0x | 10.0x | $27.2M | $139.2M | 5.11x | 38.6% |
| Bear (11x exit) | 11.0x | 11.0x | $27.2M | $162.0M | 5.95x | 42.8% |
7. Key Risks & Mitigants
| Severity | Risk Factor | Mitigant |
|---|---|---|
| Medium | Low occupancy | At 33.6%, 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 52.6% 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
- 95 hospitals with 42-166 beds
- Same-state prioritization (n=96)
- Comp margins: P25=-13.4% / P50=2.7% / P75=9.7%
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.