BEAR RIVER VALLEY HOSPITAL
1. Target Overview & Investment Thesis
BEAR RIVER VALLEY HOSPITAL is a 16-bed suburban community hospital in BOX ELDER, UT with $34.2M in net patient revenue and a 9.5% operating margin. The hospital serves a payer mix of 14.9% Medicare, 9.7% Medicaid, and 75.4% commercial.
Thesis: Turnaround. Our ML models identify $2.5M in annual EBITDA improvement potential from RCM optimization across 5 levers, lifting margin from 9.5% to 16.9% (+736bps).
| Net Revenue HCRIS | $34.2M |
| Current EBITDA COMPUTED | $3.2M |
| Operating Margin COMPUTED | 9.5% |
| Occupancy HCRIS | 16.3% |
| Revenue / Bed COMPUTED | $2.1M |
| Net-to-Gross HCRIS | 50.7% |
| Distress Probability ML | 57.4% |
2. Market Context & Competitive Position
UT has 59 Medicare-certified hospitals with a median operating margin of 8.0%. The target's margin of 9.5% places it above the state median. Among 18 size-comparable peers (8-32 beds), the median margin is -1.9%. The target performs in line with or above peers.
3. RCM Performance Analysis — Comparable Hospitals
Comps selected by bed count (8-32), prioritizing same-state peers. 18 hospitals in the comp set.
| Hospital | State | Beds | Revenue | Margin |
|---|---|---|---|---|
| BEAR RIVER VALLEY HOSPITAL (Target) | UT | 16 | $34.2M | 9.5% |
| GUNNISON VALLEY HOSPITAL | UT | 25 | $130.4M | -6.4% |
| SPANISH FORK HOSPITAL | UT | 16 | $65.3M | 0.5% |
| CENTRAL VALLEY MEDICAL CENTER | UT | 25 | $60.7M | 4.3% |
| SEVIER VALLEY HOSPITAL | UT | 24 | $58.2M | 14.5% |
| HEBER VALLEY HOSPITAL | UT | 19 | $55.8M | 8.4% |
| MOAB REGIONAL HOSPITAL | UT | 17 | $44.2M | -3.4% |
| CACHE VALLEY HOSPITAL | UT | 28 | $34.7M | -12.4% |
| OREM COMMUNITY HOSPITAL | UT | 24 | $34.2M | 4.9% |
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: $2.5M (736bps margin improvement).
| Lever | Current | Target | EBITDA Impact | Margin | Ramp |
|---|---|---|---|---|---|
| Net Collection Rate | 93.5% | 97.0% | $717K | +210bp | 18mo |
| Cost to Collect | 4.5% | 2.5% | $683K | +200bp | 12mo |
| Denial Rate Reduction | 12.0% | 6.5% | $676K | +198bp | 12mo |
| A/R Days Reduction | 5200.0% | 3800.0% | $416K | +122bp | 9mo |
| Clean Claim Rate | 88.0% | 96.0% | $22K | +6bp | 6mo |
5. EBITDA Bridge
| Current EBITDA | $3.2M |
| + RCM Uplift | +$2.5M |
| Pro Forma EBITDA | $5.8M |
| Current Margin | 9.5% |
| Pro Forma Margin | 16.9% |
| WC Released (1x) | $1.3M |
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 | $5.0M | $46.6M | 9.32x | 56.3% |
| Base (11x exit) | 10.0x | 11.0x | $5.0M | $52.9M | 10.57x | 60.3% |
| Bull Case | 9.0x | 11.0x | $4.5M | $62.8M | 13.95x | 69.4% |
| Bull (12x exit) | 9.0x | 12.0x | $4.5M | $69.8M | 15.52x | 73.0% |
| Bear Case | 11.0x | 10.0x | $5.5M | $32.4M | 5.89x | 42.6% |
| Bear (11x exit) | 11.0x | 11.0x | $5.5M | $37.4M | 6.80x | 46.7% |
7. Key Risks & Mitigants
| Severity | Risk Factor | Mitigant |
|---|---|---|
| Medium | Low occupancy | At 16.3%, fixed costs are spread over fewer patient days. Mitigant: volume growth is an additional upside lever not modeled in base case |
| High | Elevated distress probability | Model estimates 57.4% 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
- 18 hospitals with 8-32 beds
- Same-state prioritization (n=19)
- Comp margins: P25=-11.3% / P50=-1.9% / P75=4.9%
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.