BON SECOURS ST. FRANCIS XAVIER HOSPI
1. Target Overview & Investment Thesis
BON SECOURS ST. FRANCIS XAVIER HOSPI is a 186-bed suburban community hospital in CHARLESTON, SC with $304.6M in net patient revenue and a 12.2% operating margin. The hospital serves a payer mix of 25.6% Medicare, 5.7% Medicaid, and 68.8% commercial.
Thesis: Turnaround. Our ML models identify $22.4M in annual EBITDA improvement potential from RCM optimization across 5 levers, lifting margin from 12.2% to 19.5% (+736bps).
| Net Revenue HCRIS | $304.6M |
| Current EBITDA COMPUTED | $37.0M |
| Operating Margin COMPUTED | 12.2% |
| Occupancy HCRIS | 64.5% |
| Revenue / Bed COMPUTED | $1.6M |
| Net-to-Gross HCRIS | 26.9% |
| Distress Probability ML | 44.4% |
2. Market Context & Competitive Position
SC has 85 Medicare-certified hospitals with a median operating margin of 1.3%. The target's margin of 12.2% places it above the state median. Among 29 size-comparable peers (93-372 beds), the median margin is -2.6%. The target performs in line with or above peers.
3. RCM Performance Analysis — Comparable Hospitals
Comps selected by bed count (93-372), prioritizing same-state peers. 29 hospitals in the comp set.
| Hospital | State | Beds | Revenue | Margin |
|---|---|---|---|---|
| BON SECOURS ST. FRANCIS XAVIER (Target) | SC | 186 | $304.6M | 12.2% |
| ST. FRANCIS HOSPITAL INC | SC | 327 | $691.4M | 4.9% |
| GRAND STRAND REGIONAL MEDICAL | SC | 336 | $602.2M | 32.8% |
| ANMED HEALTH | SC | 367 | $596.7M | -2.3% |
| SELF REGIONAL HEALTHCARE | SC | 290 | $410.1M | 4.7% |
| ROPER HOSPITAL INC. | SC | 266 | $400.8M | -3.0% |
| PRISMA HEALTH BAPTIST HOSPITAL | SC | 246 | $277.5M | 0.4% |
| BEAUFORT MEMORIAL HOSPITAL | SC | 167 | $269.0M | -7.3% |
| MCLEOD LORIS SEACOAST HOSPITAL | SC | 155 | $262.3M | 10.1% |
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: $22.4M (736bps margin improvement).
| Lever | Current | Target | EBITDA Impact | Margin | Ramp |
|---|---|---|---|---|---|
| Net Collection Rate | 93.5% | 97.0% | $6.4M | +210bp | 18mo |
| Cost to Collect | 4.5% | 2.5% | $6.1M | +200bp | 12mo |
| Denial Rate Reduction | 12.0% | 6.5% | $6.0M | +198bp | 12mo |
| A/R Days Reduction | 5200.0% | 3800.0% | $3.7M | +122bp | 9mo |
| Clean Claim Rate | 88.0% | 96.0% | $195K | +6bp | 6mo |
5. EBITDA Bridge
| Current EBITDA | $37.0M |
| + RCM Uplift | +$22.4M |
| Pro Forma EBITDA | $59.5M |
| Current Margin | 12.2% |
| Pro Forma Margin | 19.5% |
| WC Released (1x) | $11.7M |
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 | $57.0M | $468.5M | 8.22x | 52.4% |
| Base (11x exit) | 10.0x | 11.0x | $57.0M | $533.9M | 9.37x | 56.4% |
| Bull Case | 9.0x | 11.0x | $51.3M | $626.4M | 12.22x | 65.0% |
| Bull (12x exit) | 9.0x | 12.0x | $51.3M | $698.5M | 13.62x | 68.6% |
| Bear Case | 11.0x | 10.0x | $62.7M | $337.9M | 5.39x | 40.1% |
| Bear (11x exit) | 11.0x | 11.0x | $62.7M | $392.1M | 6.26x | 44.3% |
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
- 29 hospitals with 93-372 beds
- Same-state prioritization (n=30)
- Comp margins: P25=-14.4% / P50=-2.6% / P75=5.6%
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.