MOAB REGIONAL HOSPITAL
1. Target Overview & Investment Thesis
MOAB REGIONAL HOSPITAL is a 17-bed rural/critical access in GRAND, UT with $44.2M in net patient revenue and a -3.4% operating margin. The hospital serves a payer mix of 57.2% Medicare, 12.4% Medicaid, and 30.4% commercial.
Thesis: Turnaround. Our ML models identify $3.3M in annual EBITDA improvement potential from RCM optimization across 5 levers, lifting margin from -3.4% to 4.0% (+736bps).
| Net Revenue HCRIS | $44.2M |
| Current EBITDA COMPUTED | $-1.5M |
| Operating Margin COMPUTED | -3.4% |
| Occupancy HCRIS | 31.8% |
| Revenue / Bed COMPUTED | $2.6M |
| Net-to-Gross HCRIS | 57.7% |
| Distress Probability ML | 56.4% |
2. Market Context & Competitive Position
UT has 59 Medicare-certified hospitals with a median operating margin of 8.0%. The target's margin of -3.4% places it below the state median. Among 19 size-comparable peers (8-34 beds), the median margin is 0.5%. The target's below-peer margin suggests operational improvement opportunity.
3. RCM Performance Analysis — Comparable Hospitals
Comps selected by bed count (8-34), prioritizing same-state peers. 19 hospitals in the comp set.
| Hospital | State | Beds | Revenue | Margin |
|---|---|---|---|---|
| MOAB REGIONAL HOSPITAL (Target) | UT | 17 | $44.2M | -3.4% |
| GUNNISON VALLEY HOSPITAL | UT | 25 | $130.4M | -6.4% |
| UINTAH BASIN MEDICAL CENTER | UT | 33 | $119.9M | 1.8% |
| 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% |
| 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: $3.3M (736bps margin improvement).
| Lever | Current | Target | EBITDA Impact | Margin | Ramp |
|---|---|---|---|---|---|
| Net Collection Rate | 93.5% | 97.0% | $928K | +210bp | 18mo |
| Cost to Collect | 4.5% | 2.5% | $884K | +200bp | 12mo |
| Denial Rate Reduction | 12.0% | 6.5% | $875K | +198bp | 12mo |
| A/R Days Reduction | 5200.0% | 3800.0% | $538K | +122bp | 9mo |
| Clean Claim Rate | 88.0% | 96.0% | $28K | +6bp | 6mo |
5. EBITDA Bridge
| Current EBITDA | $-1.5M |
| + RCM Uplift | +$3.3M |
| Pro Forma EBITDA | $1.8M |
| Current Margin | -3.4% |
| Pro Forma Margin | 4.0% |
| WC Released (1x) | $1.7M |
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 | $-2.3M | $22.7M | 0.00x | -100.0% |
| Base (11x exit) | 10.0x | 11.0x | $-2.3M | $24.3M | 0.00x | -100.0% |
| Bull Case | 9.0x | 11.0x | $-2.1M | $34.2M | 0.00x | -100.0% |
| Bull (12x exit) | 9.0x | 12.0x | $-2.1M | $36.8M | 0.00x | -100.0% |
| Bear Case | 11.0x | 10.0x | $-2.5M | $7.2M | 0.00x | -100.0% |
| Bear (11x exit) | 11.0x | 11.0x | $-2.5M | $7.1M | 0.00x | -100.0% |
7. Key Risks & Mitigants
| Severity | Risk Factor | Mitigant |
|---|---|---|
| High | Negative operating margin | RCM uplift bridge shows clear path to profitability; working capital release provides near-term cash cushion |
| Medium | Heavy Medicare dependence | Medicare comprises 57.2% of days; rate updates may lag inflation. Mitigant: CDI/CMI lever directly increases Medicare reimbursement |
| Medium | Low occupancy | At 31.8%, 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 56.4% 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
- 19 hospitals with 8-34 beds
- Same-state prioritization (n=20)
- Comp margins: P25=-10.3% / P50=0.5% / P75=5.1%
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.