KINGS DAUGHTERS MED CENTER OHIO
1. Target Overview & Investment Thesis
KINGS DAUGHTERS MED CENTER OHIO is a 10-bed community hospital in SCIOTO, OH with $36.1M in net patient revenue and a 31.8% operating margin. The hospital serves a payer mix of 14.9% Medicare, 0.0% Medicaid, and 85.1% commercial.
Thesis: Turnaround. Our ML models identify $2.7M in annual EBITDA improvement potential from RCM optimization across 5 levers, lifting margin from 31.8% to 39.2% (+736bps).
| Net Revenue HCRIS | $36.1M |
| Current EBITDA COMPUTED | $11.5M |
| Operating Margin COMPUTED | 31.8% |
| Occupancy HCRIS | 11.6% |
| Revenue / Bed COMPUTED | $3.6M |
| Net-to-Gross HCRIS | 27.8% |
| Distress Probability ML | nan% |
2. Market Context & Competitive Position
OH has 235 Medicare-certified hospitals with a median operating margin of -0.3%. The target's margin of 31.8% places it above the state median. Among 10 size-comparable peers (5-20 beds), the median margin is 5.7%. The target performs in line with or above peers.
3. RCM Performance Analysis — Comparable Hospitals
Comps selected by bed count (5-20), prioritizing same-state peers. 10 hospitals in the comp set.
| Hospital | State | Beds | Revenue | Margin |
|---|---|---|---|---|
| KINGS DAUGHTERS MED CENTER OHI (Target) | OH | 10 | $36.1M | 31.8% |
| INSTITUTE FOR ORTHOPAEDIC SURG | OH | 12 | $55.6M | 39.5% |
| SHELBY MEMORIAL HOSPITAL | OH | 20 | $40.2M | 13.0% |
| FOSTORIA COMMUNITY HOSPITAL | OH | 19 | $40.0M | -3.4% |
| GREENE MEMORIAL HOSPITAL INC. | OH | 13 | $33.4M | -17.9% |
| LODI COMMUNITY HOSPITAL | OH | 20 | $31.5M | 37.8% |
| MERCY HEALTH-WILLARD HOSPITAL | OH | 20 | $28.0M | -1.7% |
| DILEY RIDGE MEDICAL CENTER | OH | 10 | $26.0M | 42.1% |
| MENTAL HEALTH SRVS FOR CLARK C | OH | 16 | $9.8M | -32.9% |
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: $2.7M (736bps margin improvement).
| Lever | Current | Target | EBITDA Impact | Margin | Ramp |
|---|---|---|---|---|---|
| Net Collection Rate | 93.5% | 97.0% | $757K | +210bp | 18mo |
| Cost to Collect | 4.5% | 2.5% | $721K | +200bp | 12mo |
| Denial Rate Reduction | 12.0% | 6.5% | $714K | +198bp | 12mo |
| A/R Days Reduction | 5200.0% | 3800.0% | $439K | +122bp | 9mo |
| Clean Claim Rate | 88.0% | 96.0% | $23K | +6bp | 6mo |
5. EBITDA Bridge
| Current EBITDA | $11.5M |
| + RCM Uplift | +$2.7M |
| Pro Forma EBITDA | $14.1M |
| Current Margin | 31.8% |
| Pro Forma Margin | 39.2% |
| WC Released (1x) | $1.4M |
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 | $17.7M | $102.3M | 5.79x | 42.1% |
| Base (11x exit) | 10.0x | 11.0x | $17.7M | $118.3M | 6.69x | 46.3% |
| Bull Case | 9.0x | 11.0x | $15.9M | $132.8M | 8.35x | 52.9% |
| Bull (12x exit) | 9.0x | 12.0x | $15.9M | $149.5M | 9.40x | 56.5% |
| Bear Case | 11.0x | 10.0x | $19.4M | $83.3M | 4.29x | 33.8% |
| Bear (11x exit) | 11.0x | 11.0x | $19.4M | $97.9M | 5.04x | 38.2% |
7. Key Risks & Mitigants
| Severity | Risk Factor | Mitigant |
|---|---|---|
| Medium | Low occupancy | At 11.6%, fixed costs are spread over fewer patient days. Mitigant: volume growth is an additional upside lever not modeled in base case |
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
- 10 hospitals with 5-20 beds
- Same-state prioritization (n=12)
- Comp margins: P25=-14.3% / P50=5.7% / P75=34.5%
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.