ST GEORGE REGIONAL HOSPITAL
1. Target Overview & Investment Thesis
ST GEORGE REGIONAL HOSPITAL is a 256-bed suburban community hospital in WASHINGTON, UT with $790.1M in net patient revenue and a 12.0% operating margin. The hospital serves a payer mix of 30.7% Medicare, 7.2% Medicaid, and 62.1% commercial.
Thesis: Platform Growth. Our ML models identify $58.2M in annual EBITDA improvement potential from RCM optimization across 5 levers, lifting margin from 12.0% to 19.4% (+736bps).
| Net Revenue HCRIS | $790.1M |
| Current EBITDA COMPUTED | $94.9M |
| Operating Margin COMPUTED | 12.0% |
| Occupancy HCRIS | 70.9% |
| Revenue / Bed COMPUTED | $3.1M |
| Net-to-Gross HCRIS | 41.4% |
| Distress Probability ML | 43.2% |
2. Market Context & Competitive Position
UT has 59 Medicare-certified hospitals with a median operating margin of 8.0%. The target's margin of 12.0% places it above the state median. Among 10 size-comparable peers (128-512 beds), the median margin is 12.6%. The target's below-peer margin suggests operational improvement opportunity.
3. RCM Performance Analysis — Comparable Hospitals
Comps selected by bed count (128-512), prioritizing same-state peers. 10 hospitals in the comp set.
| Hospital | State | Beds | Revenue | Margin |
|---|---|---|---|---|
| ST GEORGE REGIONAL HOSPITAL (Target) | UT | 256 | $790.1M | 12.0% |
| INTERMOUNTAIN MEDICAL CENTER | UT | 486 | $1.24B | 8.9% |
| PRIMARY CHILDRENS HOSPITAL | UT | 287 | $895.5M | 5.6% |
| UTAH VALLEY HOSPITAL | UT | 338 | $707.3M | 7.6% |
| MCKAY-DEE HOSPITAL | UT | 236 | $629.9M | 12.6% |
| ST MARKS HOSPITAL | UT | 263 | $539.0M | 44.0% |
| LDS HOSPITAL | UT | 216 | $307.0M | -5.5% |
| OGDEN REGIONAL MEDICAL CENTER | UT | 174 | $299.3M | 47.4% |
| JORDAN VALLEY MEDICAL CENTER | UT | 267 | $274.2M | 17.2% |
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: $58.2M (736bps margin improvement).
| Lever | Current | Target | EBITDA Impact | Margin | Ramp |
|---|---|---|---|---|---|
| Net Collection Rate | 93.5% | 97.0% | $16.6M | +210bp | 18mo |
| Cost to Collect | 4.5% | 2.5% | $15.8M | +200bp | 12mo |
| Denial Rate Reduction | 12.0% | 6.5% | $15.6M | +198bp | 12mo |
| A/R Days Reduction | 5200.0% | 3800.0% | $9.6M | +122bp | 9mo |
| Clean Claim Rate | 88.0% | 96.0% | $506K | +6bp | 6mo |
5. EBITDA Bridge
| Current EBITDA | $94.9M |
| + RCM Uplift | +$58.2M |
| Pro Forma EBITDA | $153.1M |
| Current Margin | 12.0% |
| Pro Forma Margin | 19.4% |
| WC Released (1x) | $30.3M |
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 | $146.0M | $1.21B | 8.27x | 52.6% |
| Base (11x exit) | 10.0x | 11.0x | $146.0M | $1.38B | 9.42x | 56.6% |
| Bull Case | 9.0x | 11.0x | $131.4M | $1.62B | 12.29x | 65.2% |
| Bull (12x exit) | 9.0x | 12.0x | $131.4M | $1.80B | 13.70x | 68.8% |
| Bear Case | 11.0x | 10.0x | $160.6M | $869.4M | 5.41x | 40.2% |
| Bear (11x exit) | 11.0x | 11.0x | $160.6M | $1.01B | 6.28x | 44.4% |
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
- 10 hospitals with 128-512 beds
- Same-state prioritization (n=11)
- Comp margins: P25=7.6% / P50=12.6% / P75=29.1%
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.