WACCAMAW COMMUNITY HOSPITAL
1. Target Overview & Investment Thesis
WACCAMAW COMMUNITY HOSPITAL is a 124-bed suburban community hospital in GEORGETOWN, SC with $182.8M in net patient revenue and a 2.7% operating margin. The hospital serves a payer mix of 36.8% Medicare, 2.7% Medicaid, and 60.5% commercial.
Thesis: Undervalued. Our ML models identify $13.5M in annual EBITDA improvement potential from RCM optimization across 5 levers, lifting margin from 2.7% to 10.1% (+736bps).
| Net Revenue HCRIS | $182.8M |
| Current EBITDA COMPUTED | $5.0M |
| Operating Margin COMPUTED | 2.7% |
| Occupancy HCRIS | 72.4% |
| Revenue / Bed COMPUTED | $1.5M |
| Net-to-Gross HCRIS | 26.2% |
| Distress Probability ML | 42.3% |
2. Market Context & Competitive Position
SC has 85 Medicare-certified hospitals with a median operating margin of 1.3%. The target's margin of 2.7% places it above the state median. Among 33 size-comparable peers (62-248 beds), the median margin is 2.8%. The target's below-peer margin suggests operational improvement opportunity.
3. RCM Performance Analysis — Comparable Hospitals
Comps selected by bed count (62-248), prioritizing same-state peers. 33 hospitals in the comp set.
| Hospital | State | Beds | Revenue | Margin |
|---|---|---|---|---|
| WACCAMAW COMMUNITY HOSPITAL (Target) | SC | 124 | $182.8M | 2.7% |
| BON SECOURS ST. FRANCIS XAVIER | SC | 186 | $304.6M | 12.2% |
| 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% |
| MUSC HEALTH FLORENCE MEDICAL C | SC | 187 | $252.9M | -6.9% |
| CONWAY HOSPITAL | SC | 171 | $250.2M | -14.7% |
| PH PATEWOOD HOSPITAL | SC | 64 | $229.8M | 38.0% |
| EAST COOPER REGIONAL MEDICAL C | SC | 120 | $206.1M | 28.3% |
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: $13.5M (736bps margin improvement).
| Lever | Current | Target | EBITDA Impact | Margin | Ramp |
|---|---|---|---|---|---|
| Net Collection Rate | 93.5% | 97.0% | $3.8M | +210bp | 18mo |
| Cost to Collect | 4.5% | 2.5% | $3.7M | +200bp | 12mo |
| Denial Rate Reduction | 12.0% | 6.5% | $3.6M | +198bp | 12mo |
| A/R Days Reduction | 5200.0% | 3800.0% | $2.2M | +122bp | 9mo |
| Clean Claim Rate | 88.0% | 96.0% | $117K | +6bp | 6mo |
5. EBITDA Bridge
| Current EBITDA | $5.0M |
| + RCM Uplift | +$13.5M |
| Pro Forma EBITDA | $18.4M |
| Current Margin | 2.7% |
| Pro Forma Margin | 10.1% |
| WC Released (1x) | $7.0M |
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 | $7.7M | $167.4M | 21.85x | 85.3% |
| Base (11x exit) | 10.0x | 11.0x | $7.7M | $186.6M | 24.36x | 89.4% |
| Bull Case | 9.0x | 11.0x | $6.9M | $233.5M | 33.87x | 102.3% |
| Bull (12x exit) | 9.0x | 12.0x | $6.9M | $256.7M | 37.24x | 106.2% |
| Bear Case | 11.0x | 10.0x | $8.4M | $97.6M | 11.59x | 63.2% |
| Bear (11x exit) | 11.0x | 11.0x | $8.4M | $110.1M | 13.07x | 67.2% |
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
- 33 hospitals with 62-248 beds
- Same-state prioritization (n=34)
- Comp margins: P25=-8.1% / P50=2.8% / P75=17.6%
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.