LOGAN REGIONAL HOSPITAL
1. Target Overview & Investment Thesis
LOGAN REGIONAL HOSPITAL is a 114-bed suburban community hospital in CACHE, UT with $320.1M in net patient revenue and a 29.3% operating margin. The hospital serves a payer mix of 16.6% Medicare, 11.4% Medicaid, and 72.0% commercial.
Thesis: Turnaround. Our ML models identify $23.6M in annual EBITDA improvement potential from RCM optimization across 5 levers, lifting margin from 29.3% to 36.6% (+736bps).
| Net Revenue HCRIS | $320.1M |
| Current EBITDA COMPUTED | $93.7M |
| Operating Margin COMPUTED | 29.3% |
| Occupancy HCRIS | 46.1% |
| Revenue / Bed COMPUTED | $2.8M |
| Net-to-Gross HCRIS | 51.0% |
| Distress Probability ML | 50.4% |
2. Market Context & Competitive Position
UT has 59 Medicare-certified hospitals with a median operating margin of 8.0%. The target's margin of 29.3% places it above the state median. Among 16 size-comparable peers (57-228 beds), the median margin is 19.3%. The target performs in line with or above peers.
3. RCM Performance Analysis — Comparable Hospitals
Comps selected by bed count (57-228), prioritizing same-state peers. 16 hospitals in the comp set.
| Hospital | State | Beds | Revenue | Margin |
|---|---|---|---|---|
| LOGAN REGIONAL HOSPITAL (Target) | UT | 114 | $320.1M | 29.3% |
| LDS HOSPITAL | UT | 216 | $307.0M | -5.5% |
| OGDEN REGIONAL MEDICAL CENTER | UT | 174 | $299.3M | 47.4% |
| DAVIS HOSPITAL & MEDICAL CENTE | UT | 175 | $235.1M | 29.1% |
| AMERICAN FORK HOSPITAL | UT | 88 | $216.8M | 25.3% |
| RIVERTON HOSPITAL | UT | 87 | $195.8M | 18.0% |
| TIMPANOGOS REGIONAL HOSPITAL | UT | 117 | $156.1M | 38.3% |
| LONE PEAK HOSPITAL | UT | 61 | $133.1M | 25.2% |
| ALTA VIEW HOSPITAL | UT | 57 | $130.9M | -0.6% |
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: $23.6M (736bps margin improvement).
| Lever | Current | Target | EBITDA Impact | Margin | Ramp |
|---|---|---|---|---|---|
| Net Collection Rate | 93.5% | 97.0% | $6.7M | +210bp | 18mo |
| Cost to Collect | 4.5% | 2.5% | $6.4M | +200bp | 12mo |
| Denial Rate Reduction | 12.0% | 6.5% | $6.3M | +198bp | 12mo |
| A/R Days Reduction | 5200.0% | 3800.0% | $3.9M | +122bp | 9mo |
| Clean Claim Rate | 88.0% | 96.0% | $205K | +6bp | 6mo |
5. EBITDA Bridge
| Current EBITDA | $93.7M |
| + RCM Uplift | +$23.6M |
| Pro Forma EBITDA | $117.3M |
| Current Margin | 29.3% |
| Pro Forma Margin | 36.6% |
| WC Released (1x) | $12.3M |
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 | $144.2M | $853.7M | 5.92x | 42.7% |
| Base (11x exit) | 10.0x | 11.0x | $144.2M | $985.9M | 6.84x | 46.9% |
| Bull Case | 9.0x | 11.0x | $129.7M | $1.11B | 8.56x | 53.6% |
| Bull (12x exit) | 9.0x | 12.0x | $129.7M | $1.25B | 9.63x | 57.3% |
| Bear Case | 11.0x | 10.0x | $158.6M | $689.1M | 4.35x | 34.2% |
| Bear (11x exit) | 11.0x | 11.0x | $158.6M | $809.5M | 5.10x | 38.6% |
7. Key Risks & Mitigants
| Severity | Risk Factor | Mitigant |
|---|---|---|
| High | Elevated distress probability | Model estimates 50.4% 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
- 16 hospitals with 57-228 beds
- Same-state prioritization (n=17)
- Comp margins: P25=-5.5% / P50=19.3% / P75=30.2%
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.