CARNEGIE TRI-COUNTY MUNICIPAL HOSPIT
1. Target Overview & Investment Thesis
CARNEGIE TRI-COUNTY MUNICIPAL HOSPIT is a 17-bed rural/critical access in CADDO, OK with $18.2M in net patient revenue and a -16.6% operating margin. The hospital serves a payer mix of 74.3% Medicare, 6.2% Medicaid, and 19.5% commercial.
Thesis: Turnaround. Our ML models identify $1.3M in annual EBITDA improvement potential from RCM optimization across 5 levers, lifting margin from -16.6% to -9.2% (+736bps).
| Net Revenue HCRIS | $18.2M |
| Current EBITDA COMPUTED | $-3.0M |
| Operating Margin COMPUTED | -16.6% |
| Occupancy HCRIS | 46.0% |
| Revenue / Bed COMPUTED | $1.1M |
| Net-to-Gross HCRIS | 97.1% |
| Distress Probability ML | 58.9% |
2. Market Context & Competitive Position
OK has 147 Medicare-certified hospitals with a median operating margin of -8.8%. The target's margin of -16.6% places it below the state median. Among 62 size-comparable peers (8-34 beds), the median margin is -18.2%. The target performs in line with or above peers.
3. RCM Performance Analysis — Comparable Hospitals
Comps selected by bed count (8-34), prioritizing same-state peers. 62 hospitals in the comp set.
| Hospital | State | Beds | Revenue | Margin |
|---|---|---|---|---|
| CARNEGIE TRI-COUNTY MUNICIPAL (Target) | OK | 17 | $18.2M | -16.6% |
| OKLAHOMA SPINE HOSPITAL | OK | 23 | $79.0M | 8.4% |
| BAILEY MEDICAL CENTER | OK | 33 | $54.6M | 13.3% |
| BRISTOW MEDICAL CENTER | OK | 25 | $48.5M | -12.6% |
| JEFFERSON COUNTY HOSPITAL | OK | 25 | $41.1M | 14.4% |
| PHYSICIANS HOSPITAL AT ANADARK | OK | 25 | $34.1M | -48.1% |
| LAKESIDE WOMENS HOSPITAL | OK | 23 | $33.0M | 16.5% |
| STROUD REGIONAL MEDICAL CENTER | OK | 25 | $31.4M | -50.0% |
| SURGICAL HOSPITAL OF OKLAHOMA | OK | 12 | $31.2M | -13.0% |
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: $1.3M (736bps margin improvement).
| Lever | Current | Target | EBITDA Impact | Margin | Ramp |
|---|---|---|---|---|---|
| Net Collection Rate | 93.5% | 97.0% | $383K | +210bp | 18mo |
| Cost to Collect | 4.5% | 2.5% | $365K | +200bp | 12mo |
| Denial Rate Reduction | 12.0% | 6.5% | $361K | +198bp | 12mo |
| A/R Days Reduction | 5200.0% | 3800.0% | $222K | +122bp | 9mo |
| Clean Claim Rate | 88.0% | 96.0% | $12K | +6bp | 6mo |
5. EBITDA Bridge
| Current EBITDA | $-3.0M |
| + RCM Uplift | +$1.3M |
| Pro Forma EBITDA | $-1.7M |
| Current Margin | -16.6% |
| Pro Forma Margin | -9.2% |
| WC Released (1x) | $699K |
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 | $-4.6M | $-6.5M | 0.00x | -100.0% |
| Base (11x exit) | 10.0x | 11.0x | $-4.6M | $-8.7M | 0.00x | -100.0% |
| Bull Case | 9.0x | 11.0x | $-4.2M | $-5.8M | 0.00x | -100.0% |
| Bull (12x exit) | 9.0x | 12.0x | $-4.2M | $-7.5M | 0.00x | -100.0% |
| Bear Case | 11.0x | 10.0x | $-5.1M | $-11.7M | 0.00x | -100.0% |
| Bear (11x exit) | 11.0x | 11.0x | $-5.1M | $-14.5M | 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 | Heavy Medicare dependence | Medicare comprises 74.3% of days; rate updates may lag inflation. Mitigant: CDI/CMI lever directly increases Medicare reimbursement |
| High | Elevated distress probability | Model estimates 58.9% 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
- 62 hospitals with 8-34 beds
- Same-state prioritization (n=66)
- Comp margins: P25=-29.5% / P50=-18.2% / P75=-5.5%
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.