UPMC CARLISLE
1. Target Overview & Investment Thesis
UPMC CARLISLE is a 72-bed suburban community hospital in CUMBERLAND, PA with $165.0M in net patient revenue and a 19.5% operating margin. The hospital serves a payer mix of 32.4% Medicare, 1.7% Medicaid, and 66.0% commercial.
Thesis: Turnaround. Our ML models identify $12.1M in annual EBITDA improvement potential from RCM optimization across 5 levers, lifting margin from 19.5% to 26.8% (+736bps).
| Net Revenue HCRIS | $165.0M |
| Current EBITDA COMPUTED | $32.1M |
| Operating Margin COMPUTED | 19.5% |
| Occupancy HCRIS | 73.8% |
| Revenue / Bed COMPUTED | $2.3M |
| Net-to-Gross HCRIS | 28.2% |
| Distress Probability ML | 40.4% |
2. Market Context & Competitive Position
PA has 225 Medicare-certified hospitals with a median operating margin of -4.4%. The target's margin of 19.5% places it above the state median. Among 99 size-comparable peers (36-144 beds), the median margin is -1.1%. The target performs in line with or above peers.
3. RCM Performance Analysis — Comparable Hospitals
Comps selected by bed count (36-144), prioritizing same-state peers. 99 hospitals in the comp set.
| Hospital | State | Beds | Revenue | Margin |
|---|---|---|---|---|
| UPMC CARLISLE (Target) | PA | 72 | $165.0M | 19.5% |
| THE GETTYSBURG HOSPITAL | PA | 76 | $341.8M | 18.4% |
| ST. JOSEPH MEDICAL CENTER | PA | 132 | $334.8M | 13.2% |
| EPHRATA COMMUNITY HOSPITAL | PA | 115 | $291.8M | 3.8% |
| AMERICAN ONCOLOGIC HOSPIAL | PA | 100 | $229.8M | -11.1% |
| EVANGELICAL COMMUNITY HOSPITAL | PA | 119 | $223.6M | 5.1% |
| ST. LUKES HOSPITAL - MONROE CA | PA | 98 | $221.8M | 7.8% |
| GEISINGER LEWISTOWN HOSPITAL | PA | 107 | $210.8M | 11.2% |
| UPMC HANOVER | PA | 73 | $200.8M | 18.2% |
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: $12.1M (736bps margin improvement).
| Lever | Current | Target | EBITDA Impact | Margin | Ramp |
|---|---|---|---|---|---|
| Net Collection Rate | 93.5% | 97.0% | $3.5M | +210bp | 18mo |
| Cost to Collect | 4.5% | 2.5% | $3.3M | +200bp | 12mo |
| Denial Rate Reduction | 12.0% | 6.5% | $3.3M | +198bp | 12mo |
| A/R Days Reduction | 5200.0% | 3800.0% | $2.0M | +122bp | 9mo |
| Clean Claim Rate | 88.0% | 96.0% | $106K | +6bp | 6mo |
5. EBITDA Bridge
| Current EBITDA | $32.1M |
| + RCM Uplift | +$12.1M |
| Pro Forma EBITDA | $44.3M |
| Current Margin | 19.5% |
| Pro Forma Margin | 26.8% |
| WC Released (1x) | $6.3M |
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 | $49.4M | $333.4M | 6.74x | 46.5% |
| Base (11x exit) | 10.0x | 11.0x | $49.4M | $382.8M | 7.74x | 50.6% |
| Bull Case | 9.0x | 11.0x | $44.5M | $439.0M | 9.87x | 58.1% |
| Bull (12x exit) | 9.0x | 12.0x | $44.5M | $492.0M | 11.06x | 61.7% |
| Bear Case | 11.0x | 10.0x | $54.4M | $256.6M | 4.72x | 36.4% |
| Bear (11x exit) | 11.0x | 11.0x | $54.4M | $300.0M | 5.52x | 40.7% |
7. Key Risks & Mitigants
| Severity | Risk Factor | Mitigant |
|---|---|---|
| Medium | Standard execution risk | RCM improvement requires management buy-in and 12-18 month implementation timeline |
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
- 99 hospitals with 36-144 beds
- Same-state prioritization (n=100)
- Comp margins: P25=-18.5% / P50=-1.1% / P75=8.8%
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.