GRAND STRAND REGIONAL MEDICAL CENTER
1. Target Overview & Investment Thesis
GRAND STRAND REGIONAL MEDICAL CENTER is a 336-bed suburban community hospital in HORRY, SC with $602.2M in net patient revenue and a 32.8% operating margin. The hospital serves a payer mix of 31.4% Medicare, 6.2% Medicaid, and 62.4% commercial.
Thesis: Platform Growth. Our ML models identify $44.3M in annual EBITDA improvement potential from RCM optimization across 5 levers, lifting margin from 32.8% to 40.1% (+736bps).
| Net Revenue HCRIS | $602.2M |
| Current EBITDA COMPUTED | $197.3M |
| Operating Margin COMPUTED | 32.8% |
| Occupancy HCRIS | 87.0% |
| Revenue / Bed COMPUTED | $1.8M |
| Net-to-Gross HCRIS | 12.2% |
| Distress Probability ML | 38.4% |
2. Market Context & Competitive Position
SC has 85 Medicare-certified hospitals with a median operating margin of 1.3%. The target's margin of 32.8% places it above the state median. Among 19 size-comparable peers (168-672 beds), the median margin is -0.0%. The target performs in line with or above peers.
3. RCM Performance Analysis — Comparable Hospitals
Comps selected by bed count (168-672), prioritizing same-state peers. 19 hospitals in the comp set.
| Hospital | State | Beds | Revenue | Margin |
|---|---|---|---|---|
| GRAND STRAND REGIONAL MEDICAL (Target) | SC | 336 | $602.2M | 32.8% |
| LEXINGTON MEDICAL CENTER | SC | 541 | $1.43B | 1.1% |
| SPARTANBURG REGIONAL MEDICAL C | SC | 665 | $1.18B | 7.2% |
| PRISMA HEALTH RICHLAND HOSPITA | SC | 600 | $913.3M | 0.4% |
| MCLEOD REGIONAL MEDICAL CENTER | SC | 524 | $792.5M | -4.9% |
| ST. FRANCIS HOSPITAL INC | SC | 327 | $691.4M | 4.9% |
| TRIDENT REGIONAL MEDICAL CENTE | SC | 388 | $637.5M | 16.1% |
| ANMED HEALTH | SC | 367 | $596.7M | -2.3% |
| SELF REGIONAL HEALTHCARE | SC | 290 | $410.1M | 4.7% |
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: $44.3M (736bps margin improvement).
| Lever | Current | Target | EBITDA Impact | Margin | Ramp |
|---|---|---|---|---|---|
| Net Collection Rate | 93.5% | 97.0% | $12.6M | +210bp | 18mo |
| Cost to Collect | 4.5% | 2.5% | $12.0M | +200bp | 12mo |
| Denial Rate Reduction | 12.0% | 6.5% | $11.9M | +198bp | 12mo |
| A/R Days Reduction | 5200.0% | 3800.0% | $7.3M | +122bp | 9mo |
| Clean Claim Rate | 88.0% | 96.0% | $385K | +6bp | 6mo |
5. EBITDA Bridge
| Current EBITDA | $197.3M |
| + RCM Uplift | +$44.3M |
| Pro Forma EBITDA | $241.6M |
| Current Margin | 32.8% |
| Pro Forma Margin | 40.1% |
| WC Released (1x) | $23.1M |
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 | $303.6M | $1.74B | 5.75x | 41.9% |
| Base (11x exit) | 10.0x | 11.0x | $303.6M | $2.02B | 6.65x | 46.1% |
| Bull Case | 9.0x | 11.0x | $273.2M | $2.26B | 8.28x | 52.6% |
| Bull (12x exit) | 9.0x | 12.0x | $273.2M | $2.55B | 9.33x | 56.3% |
| Bear Case | 11.0x | 10.0x | $333.9M | $1.42B | 4.27x | 33.7% |
| Bear (11x exit) | 11.0x | 11.0x | $333.9M | $1.68B | 5.02x | 38.1% |
7. Key Risks & Mitigants
| Severity | Risk Factor | Mitigant |
|---|---|---|
| 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
- 19 hospitals with 168-672 beds
- Same-state prioritization (n=20)
- Comp margins: P25=-10.8% / P50=-0.0% / P75=4.8%
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.