COOKEVILLE REGIONAL MEDICAL CENTER
1. Target Overview & Investment Thesis
COOKEVILLE REGIONAL MEDICAL CENTER is a 212-bed suburban community hospital in PUTNAM, TN with $372.5M in net patient revenue and a 2.1% operating margin. The hospital serves a payer mix of 35.2% Medicare, 16.2% Medicaid, and 48.6% commercial.
Thesis: Undervalued. Our ML models identify $27.4M in annual EBITDA improvement potential from RCM optimization across 5 levers, lifting margin from 2.1% to 9.5% (+736bps).
| Net Revenue HCRIS | $372.5M |
| Current EBITDA COMPUTED | $7.8M |
| Operating Margin COMPUTED | 2.1% |
| Occupancy HCRIS | 76.4% |
| Revenue / Bed COMPUTED | $1.8M |
| Net-to-Gross HCRIS | 32.8% |
| Distress Probability ML | 45.2% |
2. Market Context & Competitive Position
TN has 141 Medicare-certified hospitals with a median operating margin of -0.6%. The target's margin of 2.1% places it above the state median. Among 33 size-comparable peers (106-424 beds), the median margin is 1.4%. The target performs in line with or above peers.
3. RCM Performance Analysis — Comparable Hospitals
Comps selected by bed count (106-424), prioritizing same-state peers. 33 hospitals in the comp set.
| Hospital | State | Beds | Revenue | Margin |
|---|---|---|---|---|
| COOKEVILLE REGIONAL MEDICAL CE (Target) | TN | 212 | $372.5M | 2.1% |
| SAINT THOMAS RUTHERFORD HOSPIT | TN | 354 | $447.4M | 1.3% |
| PARKRIDGE MEDICAL CENTER | TN | 396 | $433.4M | 30.1% |
| REGIONAL ONE HEALTH | TN | 291 | $407.9M | -50.0% |
| PARKWEST MEDICAL CENTER | TN | 361 | $396.4M | -5.5% |
| SKYLINE MEDICAL CENTER | TN | 350 | $360.4M | 15.1% |
| FORT SANDERS REGIONAL MEDICAL | TN | 304 | $346.2M | -9.4% |
| HOLSTON VALLEY HOSP & MED CTR | TN | 286 | $344.6M | -7.4% |
| MAURY REGIONAL HOSPITAL | TN | 244 | $334.0M | -9.7% |
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: $27.4M (736bps margin improvement).
| Lever | Current | Target | EBITDA Impact | Margin | Ramp |
|---|---|---|---|---|---|
| Net Collection Rate | 93.5% | 97.0% | $7.8M | +210bp | 18mo |
| Cost to Collect | 4.5% | 2.5% | $7.4M | +200bp | 12mo |
| Denial Rate Reduction | 12.0% | 6.5% | $7.4M | +198bp | 12mo |
| A/R Days Reduction | 5200.0% | 3800.0% | $4.5M | +122bp | 9mo |
| Clean Claim Rate | 88.0% | 96.0% | $238K | +6bp | 6mo |
5. EBITDA Bridge
| Current EBITDA | $7.8M |
| + RCM Uplift | +$27.4M |
| Pro Forma EBITDA | $35.2M |
| Current Margin | 2.1% |
| Pro Forma Margin | 9.5% |
| WC Released (1x) | $14.3M |
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 | $12.0M | $325.7M | 27.10x | 93.5% |
| Base (11x exit) | 10.0x | 11.0x | $12.0M | $362.2M | 30.13x | 97.6% |
| Bull Case | 9.0x | 11.0x | $10.8M | $456.5M | 42.21x | 111.4% |
| Bull (12x exit) | 9.0x | 12.0x | $10.8M | $501.2M | 46.34x | 115.4% |
| Bear Case | 11.0x | 10.0x | $13.2M | $184.7M | 13.97x | 69.5% |
| Bear (11x exit) | 11.0x | 11.0x | $13.2M | $207.5M | 15.69x | 73.4% |
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 106-424 beds
- Same-state prioritization (n=34)
- Comp margins: P25=-8.2% / P50=1.4% / P75=12.1%
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.