AMERICAN FORK HOSPITAL
1. Target Overview & Investment Thesis
AMERICAN FORK HOSPITAL is a 88-bed suburban community hospital in UTAH, UT with $216.8M in net patient revenue and a 25.3% operating margin. The hospital serves a payer mix of 10.7% Medicare, 6.3% Medicaid, and 83.0% commercial.
Thesis: Turnaround. Our ML models identify $16.0M in annual EBITDA improvement potential from RCM optimization across 5 levers, lifting margin from 25.3% to 32.7% (+736bps).
| Net Revenue HCRIS | $216.8M |
| Current EBITDA COMPUTED | $54.8M |
| Operating Margin COMPUTED | 25.3% |
| Occupancy HCRIS | 62.5% |
| Revenue / Bed COMPUTED | $2.5M |
| Net-to-Gross HCRIS | 42.5% |
| Distress Probability ML | 44.5% |
2. Market Context & Competitive Position
UT has 59 Medicare-certified hospitals with a median operating margin of 8.0%. The target's margin of 25.3% places it above the state median. Among 16 size-comparable peers (44-176 beds), the median margin is 22.9%. The target performs in line with or above peers.
3. RCM Performance Analysis — Comparable Hospitals
Comps selected by bed count (44-176), prioritizing same-state peers. 16 hospitals in the comp set.
| Hospital | State | Beds | Revenue | Margin |
|---|---|---|---|---|
| AMERICAN FORK HOSPITAL (Target) | UT | 88 | $216.8M | 25.3% |
| LOGAN REGIONAL HOSPITAL | UT | 114 | $320.1M | 29.3% |
| OGDEN REGIONAL MEDICAL CENTER | UT | 174 | $299.3M | 47.4% |
| DAVIS HOSPITAL & MEDICAL CENTE | UT | 175 | $235.1M | 29.1% |
| RIVERTON HOSPITAL | UT | 87 | $195.8M | 18.0% |
| TIMPANOGOS REGIONAL HOSPITAL | UT | 117 | $156.1M | 38.3% |
| CEDAR CITY HOSPITAL | UT | 48 | $136.8M | 31.4% |
| 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: $16.0M (736bps margin improvement).
| Lever | Current | Target | EBITDA Impact | Margin | Ramp |
|---|---|---|---|---|---|
| Net Collection Rate | 93.5% | 97.0% | $4.6M | +210bp | 18mo |
| Cost to Collect | 4.5% | 2.5% | $4.3M | +200bp | 12mo |
| Denial Rate Reduction | 12.0% | 6.5% | $4.3M | +198bp | 12mo |
| A/R Days Reduction | 5200.0% | 3800.0% | $2.6M | +122bp | 9mo |
| Clean Claim Rate | 88.0% | 96.0% | $139K | +6bp | 6mo |
5. EBITDA Bridge
| Current EBITDA | $54.8M |
| + RCM Uplift | +$16.0M |
| Pro Forma EBITDA | $70.8M |
| Current Margin | 25.3% |
| Pro Forma Margin | 32.7% |
| WC Released (1x) | $8.3M |
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 | $84.4M | $521.3M | 6.18x | 43.9% |
| Base (11x exit) | 10.0x | 11.0x | $84.4M | $600.9M | 7.12x | 48.1% |
| Bull Case | 9.0x | 11.0x | $75.9M | $680.9M | 8.97x | 55.1% |
| Bull (12x exit) | 9.0x | 12.0x | $75.9M | $765.2M | 10.08x | 58.7% |
| Bear Case | 11.0x | 10.0x | $92.8M | $414.1M | 4.46x | 34.9% |
| Bear (11x exit) | 11.0x | 11.0x | $92.8M | $485.7M | 5.23x | 39.2% |
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
- 16 hospitals with 44-176 beds
- Same-state prioritization (n=17)
- Comp margins: P25=-1.9% / P50=22.9% / P75=31.9%
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.