ROPER ST. FRANCIS MT PLEASANT HOSPIT
1. Target Overview & Investment Thesis
ROPER ST. FRANCIS MT PLEASANT HOSPIT is a 85-bed suburban community hospital in CHARLESTON, SC with $107.3M in net patient revenue and a 9.9% operating margin. The hospital serves a payer mix of 44.3% Medicare, 1.0% Medicaid, and 54.6% commercial.
Thesis: Turnaround. Our ML models identify $7.9M in annual EBITDA improvement potential from RCM optimization across 5 levers, lifting margin from 9.9% to 17.3% (+736bps).
| Net Revenue HCRIS | $107.3M |
| Current EBITDA COMPUTED | $10.6M |
| Operating Margin COMPUTED | 9.9% |
| Occupancy HCRIS | 32.3% |
| Revenue / Bed COMPUTED | $1.3M |
| Net-to-Gross HCRIS | 27.9% |
| Distress Probability ML | 51.8% |
2. Market Context & Competitive Position
SC has 85 Medicare-certified hospitals with a median operating margin of 1.3%. The target's margin of 9.9% places it above the state median. Among 38 size-comparable peers (42-170 beds), the median margin is 10.1%. The target's below-peer margin suggests operational improvement opportunity.
3. RCM Performance Analysis — Comparable Hospitals
Comps selected by bed count (42-170), prioritizing same-state peers. 38 hospitals in the comp set.
| Hospital | State | Beds | Revenue | Margin |
|---|---|---|---|---|
| ROPER ST. FRANCIS MT PLEASANT (Target) | SC | 85 | $107.3M | 9.9% |
| BEAUFORT MEMORIAL HOSPITAL | SC | 167 | $269.0M | -7.3% |
| MCLEOD LORIS SEACOAST HOSPITAL | SC | 155 | $262.3M | 10.1% |
| PH PATEWOOD HOSPITAL | SC | 64 | $229.8M | 38.0% |
| EAST COOPER REGIONAL MEDICAL C | SC | 120 | $206.1M | 28.3% |
| OCONEE MEMORIAL HOSPITAL | SC | 131 | $190.4M | 5.2% |
| WACCAMAW COMMUNITY HOSPITAL | SC | 124 | $182.8M | 2.7% |
| GEORGETOWN MEMORIAL HOSPITAL | SC | 68 | $168.0M | -4.6% |
| HILTON HEAD HOSPITAL | SC | 109 | $165.7M | 29.2% |
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: $7.9M (736bps margin improvement).
| Lever | Current | Target | EBITDA Impact | Margin | Ramp |
|---|---|---|---|---|---|
| Net Collection Rate | 93.5% | 97.0% | $2.3M | +210bp | 18mo |
| Cost to Collect | 4.5% | 2.5% | $2.1M | +200bp | 12mo |
| Denial Rate Reduction | 12.0% | 6.5% | $2.1M | +198bp | 12mo |
| A/R Days Reduction | 5200.0% | 3800.0% | $1.3M | +122bp | 9mo |
| Clean Claim Rate | 88.0% | 96.0% | $69K | +6bp | 6mo |
5. EBITDA Bridge
| Current EBITDA | $10.6M |
| + RCM Uplift | +$7.9M |
| Pro Forma EBITDA | $18.5M |
| Current Margin | 9.9% |
| Pro Forma Margin | 17.3% |
| WC Released (1x) | $4.1M |
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 | $16.3M | $149.0M | 9.12x | 55.6% |
| Base (11x exit) | 10.0x | 11.0x | $16.3M | $169.3M | 10.36x | 59.6% |
| Bull Case | 9.0x | 11.0x | $14.7M | $200.6M | 13.64x | 68.6% |
| Bull (12x exit) | 9.0x | 12.0x | $14.7M | $223.2M | 15.17x | 72.3% |
| Bear Case | 11.0x | 10.0x | $18.0M | $104.3M | 5.80x | 42.1% |
| Bear (11x exit) | 11.0x | 11.0x | $18.0M | $120.5M | 6.70x | 46.3% |
7. Key Risks & Mitigants
| Severity | Risk Factor | Mitigant |
|---|---|---|
| Medium | Low occupancy | At 32.3%, fixed costs are spread over fewer patient days. Mitigant: volume growth is an additional upside lever not modeled in base case |
| High | Elevated distress probability | Model estimates 51.8% 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
- 38 hospitals with 42-170 beds
- Same-state prioritization (n=39)
- Comp margins: P25=-7.0% / P50=10.1% / P75=19.6%
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.