SAINT FRANCIS HOSPITAL SOUTH
1. Target Overview & Investment Thesis
SAINT FRANCIS HOSPITAL SOUTH is a 104-bed suburban community hospital in TULSA, OK with $198.3M in net patient revenue and a 34.4% operating margin. The hospital serves a payer mix of 25.6% Medicare, 24.2% Medicaid, and 50.2% commercial.
Thesis: Turnaround. Our ML models identify $14.6M in annual EBITDA improvement potential from RCM optimization across 5 levers, lifting margin from 34.4% to 41.7% (+736bps).
| Net Revenue HCRIS | $198.3M |
| Current EBITDA COMPUTED | $68.1M |
| Operating Margin COMPUTED | 34.4% |
| Occupancy HCRIS | 67.7% |
| Revenue / Bed COMPUTED | $1.9M |
| Net-to-Gross HCRIS | 28.3% |
| Distress Probability ML | 47.8% |
2. Market Context & Competitive Position
OK has 147 Medicare-certified hospitals with a median operating margin of -8.8%. The target's margin of 34.4% places it above the state median. Among 41 size-comparable peers (52-208 beds), the median margin is -3.8%. The target performs in line with or above peers.
3. RCM Performance Analysis — Comparable Hospitals
Comps selected by bed count (52-208), prioritizing same-state peers. 41 hospitals in the comp set.
| Hospital | State | Beds | Revenue | Margin |
|---|---|---|---|---|
| SAINT FRANCIS HOSPITAL SOUTH (Target) | OK | 104 | $198.3M | 34.4% |
| OKLAHOMA HEART HOSPITAL | OK | 97 | $342.0M | -2.8% |
| COMANCHE COUNTY MEMORIAL HOSPI | OK | 201 | $304.2M | -7.9% |
| STILLWATER MEDICAL CENTER | OK | 52 | $270.2M | -9.9% |
| INTEGRIS SOUTHWEST MEDICAL CEN | OK | 169 | $267.6M | -13.5% |
| HILLCREST HOSPITAL SOUTH | OK | 152 | $218.9M | 4.9% |
| ST ANTHONY SHAWNEE HOSPITAL | OK | 57 | $169.2M | -6.1% |
| MCBRIDE CLINIC ORTHOPEDIC HOSP | OK | 68 | $166.9M | -5.0% |
| MERCY HOSPITAL ARDMORE | OK | 140 | $158.8M | -1.1% |
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: $14.6M (736bps margin improvement).
| Lever | Current | Target | EBITDA Impact | Margin | Ramp |
|---|---|---|---|---|---|
| Net Collection Rate | 93.5% | 97.0% | $4.2M | +210bp | 18mo |
| Cost to Collect | 4.5% | 2.5% | $4.0M | +200bp | 12mo |
| Denial Rate Reduction | 12.0% | 6.5% | $3.9M | +198bp | 12mo |
| A/R Days Reduction | 5200.0% | 3800.0% | $2.4M | +122bp | 9mo |
| Clean Claim Rate | 88.0% | 96.0% | $127K | +6bp | 6mo |
5. EBITDA Bridge
| Current EBITDA | $68.1M |
| + RCM Uplift | +$14.6M |
| Pro Forma EBITDA | $82.7M |
| Current Margin | 34.4% |
| Pro Forma Margin | 41.7% |
| WC Released (1x) | $7.6M |
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 | $104.8M | $595.4M | 5.68x | 41.5% |
| Base (11x exit) | 10.0x | 11.0x | $104.8M | $689.0M | 6.57x | 45.7% |
| Bull Case | 9.0x | 11.0x | $94.3M | $771.2M | 8.17x | 52.2% |
| Bull (12x exit) | 9.0x | 12.0x | $94.3M | $869.2M | 9.21x | 55.9% |
| Bear Case | 11.0x | 10.0x | $115.3M | $488.4M | 4.24x | 33.5% |
| Bear (11x exit) | 11.0x | 11.0x | $115.3M | $574.7M | 4.98x | 37.9% |
7. Key Risks & Mitigants
| Severity | Risk Factor | Mitigant |
|---|---|---|
| Medium | Elevated Medicaid exposure (24.2%) | Medicaid reimburses below cost in most states. Mitigant: denial reduction lever has highest impact on Medicaid claims |
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
- 41 hospitals with 52-208 beds
- Same-state prioritization (n=42)
- Comp margins: P25=-15.2% / P50=-3.8% / P75=6.0%
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.