SSH -NE OHIO
1. Target Overview & Investment Thesis
SSH -NE OHIO is a 30-bed suburban community hospital in STARK, OH with $10.6M in net patient revenue and a 1.3% operating margin. The hospital serves a payer mix of 33.6% Medicare, 8.7% Medicaid, and 57.7% commercial.
Thesis: Turnaround. Our ML models identify $782K in annual EBITDA improvement potential from RCM optimization across 5 levers, lifting margin from 1.3% to 8.7% (+741bps).
| Net Revenue HCRIS | $10.6M |
| Current EBITDA COMPUTED | $136K |
| Operating Margin COMPUTED | 1.3% |
| Occupancy HCRIS | 44.8% |
| Revenue / Bed COMPUTED | $352K |
| Net-to-Gross HCRIS | 15.5% |
| Distress Probability ML | 50.1% |
2. Market Context & Competitive Position
OH has 235 Medicare-certified hospitals with a median operating margin of -0.3%. The target's margin of 1.3% places it above the state median. Among 96 size-comparable peers (15-60 beds), the median margin is -1.7%. The target performs in line with or above peers.
3. RCM Performance Analysis — Comparable Hospitals
Comps selected by bed count (15-60), prioritizing same-state peers. 96 hospitals in the comp set.
| Hospital | State | Beds | Revenue | Margin |
|---|---|---|---|---|
| SSH -NE OHIO (Target) | OH | 30 | $10.6M | 1.3% |
| CRYSTAL CLINIC ORTHOPAEDIC CEN | OH | 59 | $173.3M | -14.9% |
| THE SURGICAL HOSPITAL AT SOUTH | OH | 24 | $166.6M | -3.1% |
| MEMORIAL HOSPITAL OF UNION COU | OH | 51 | $151.0M | 8.0% |
| GRADY MEMORIAL HOSPITAL | OH | 60 | $146.7M | 16.5% |
| GALION COMMUNITY HOSPITAL | OH | 25 | $128.2M | 16.6% |
| MARY RUTAN HOSPITAL | OH | 39 | $113.0M | -12.5% |
| AVITA ONTARIO HOSPITAL | OH | 49 | $109.2M | 16.0% |
| MERCY HEALTH-TIFFIN HOSPITAL | OH | 35 | $103.0M | 18.1% |
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: $782K (741bps margin improvement).
| Lever | Current | Target | EBITDA Impact | Margin | Ramp |
|---|---|---|---|---|---|
| Net Collection Rate | 93.5% | 97.0% | $222K | +210bp | 18mo |
| Denial Rate Reduction | 12.0% | 6.5% | $211K | +200bp | 12mo |
| Cost to Collect | 4.5% | 2.5% | $211K | +200bp | 12mo |
| A/R Days Reduction | 5200.0% | 3800.0% | $128K | +122bp | 9mo |
| Clean Claim Rate | 88.0% | 96.0% | $10K | +9bp | 6mo |
5. EBITDA Bridge
| Current EBITDA | $136K |
| + RCM Uplift | +$782K |
| Pro Forma EBITDA | $918K |
| Current Margin | 1.3% |
| Pro Forma Margin | 8.7% |
| WC Released (1x) | $405K |
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 | $210K | $8.7M | 41.58x | 110.8% |
| Base (11x exit) | 10.0x | 11.0x | $210K | $9.7M | 46.06x | 115.1% |
| Bull Case | 9.0x | 11.0x | $189K | $12.3M | 65.21x | 130.6% |
| Bull (12x exit) | 9.0x | 12.0x | $189K | $13.5M | 71.44x | 134.8% |
| Bear Case | 11.0x | 10.0x | $231K | $4.7M | 20.55x | 83.0% |
| Bear (11x exit) | 11.0x | 11.0x | $231K | $5.3M | 22.93x | 87.1% |
7. Key Risks & Mitigants
| Severity | Risk Factor | Mitigant |
|---|---|---|
| High | Elevated distress probability | Model estimates 50.1% probability of financial distress. Mitigant: distressed entry pricing (7-9x) compensates for risk |
| Low | Low net-to-gross ratio | Large contractual allowances suggest pricing discipline issues. Mitigant: payer renegotiation is an additional upside lever |
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
- 96 hospitals with 15-60 beds
- Same-state prioritization (n=97)
- Comp margins: P25=-11.1% / P50=-1.7% / P75=12.3%
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.