TX HLTH SPECIALTY HOSP FORT WORTH
1. Target Overview & Investment Thesis
TX HLTH SPECIALTY HOSP FORT WORTH is a 15-bed community hospital in TARRANT, TX with $10.2M in net patient revenue and a 8.0% operating margin. The hospital serves a payer mix of 5.6% Medicare, 0.0% Medicaid, and 94.4% commercial.
Thesis: Turnaround. Our ML models identify $757K in annual EBITDA improvement potential from RCM optimization across 5 levers, lifting margin from 8.0% to 15.5% (+742bps).
| Net Revenue HCRIS | $10.2M |
| Current EBITDA COMPUTED | $821K |
| Operating Margin COMPUTED | 8.0% |
| Occupancy HCRIS | 56.6% |
| Revenue / Bed COMPUTED | $681K |
| Net-to-Gross HCRIS | 45.2% |
| Distress Probability ML | nan% |
2. Market Context & Competitive Position
TX has 583 Medicare-certified hospitals with a median operating margin of -0.7%. The target's margin of 8.0% places it above the state median. Among 163 size-comparable peers (8-30 beds), the median margin is -18.9%. The target performs in line with or above peers.
3. RCM Performance Analysis — Comparable Hospitals
Comps selected by bed count (8-30), prioritizing same-state peers. 163 hospitals in the comp set.
| Hospital | State | Beds | Revenue | Margin |
|---|---|---|---|---|
| TX HLTH SPECIALTY HOSP FORT WO (Target) | TX | 15 | $10.2M | 8.0% |
| CORYELL MEMORIAL HOSPITAL | TX | 25 | $305.9M | -1.5% |
| TEXAS SPINE AND JOINT HOSPITAL | TX | 20 | $147.3M | 30.3% |
| NORTH CENTRAL SURGICAL HOSPITA | TX | 24 | $143.6M | 32.0% |
| SCOTT AND WHITE HOSPITAL TAYLO | TX | 25 | $139.7M | -47.5% |
| BAYLOR SURGICAL HOSPITAL AT FO | TX | 30 | $136.0M | 14.8% |
| BAYLOR ORTHOPEDIC AND SPINE HO | TX | 24 | $133.8M | 39.8% |
| UVALDE MEMORIAL HOSPITAL | TX | 21 | $89.9M | 30.1% |
| BAYLOR MEDICAL CENTER AT TROPH | TX | 21 | $89.7M | 31.5% |
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: $757K (742bps margin improvement).
| Lever | Current | Target | EBITDA Impact | Margin | Ramp |
|---|---|---|---|---|---|
| Net Collection Rate | 93.5% | 97.0% | $214K | +210bp | 18mo |
| Denial Rate Reduction | 12.0% | 6.5% | $205K | +201bp | 12mo |
| Cost to Collect | 4.5% | 2.5% | $204K | +200bp | 12mo |
| A/R Days Reduction | 5200.0% | 3800.0% | $124K | +122bp | 9mo |
| Clean Claim Rate | 88.0% | 96.0% | $10K | +9bp | 6mo |
5. EBITDA Bridge
| Current EBITDA | $821K |
| + RCM Uplift | +$757K |
| Pro Forma EBITDA | $1.6M |
| Current Margin | 8.0% |
| Pro Forma Margin | 15.5% |
| WC Released (1x) | $392K |
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 | $1.3M | $13.0M | 10.28x | 59.4% |
| Base (11x exit) | 10.0x | 11.0x | $1.3M | $14.7M | 11.63x | 63.4% |
| Bull Case | 9.0x | 11.0x | $1.1M | $17.6M | 15.48x | 73.0% |
| Bull (12x exit) | 9.0x | 12.0x | $1.1M | $19.5M | 17.19x | 76.6% |
| Bear Case | 11.0x | 10.0x | $1.4M | $8.8M | 6.33x | 44.6% |
| Bear (11x exit) | 11.0x | 11.0x | $1.4M | $10.1M | 7.28x | 48.8% |
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
- 163 hospitals with 8-30 beds
- Same-state prioritization (n=167)
- Comp margins: P25=-46.1% / P50=-18.9% / P75=7.9%
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.