MARIAN CENTER
1. Target Overview & Investment Thesis
MARIAN CENTER is a 12-bed community hospital in SALT LAKE, UT with $3.6M in net patient revenue and a 11.5% operating margin. The hospital serves a payer mix of 36.6% Medicare, 0.0% Medicaid, and 63.4% commercial.
Thesis: Turnaround. Our ML models identify $280K in annual EBITDA improvement potential from RCM optimization across 5 levers, lifting margin from 11.5% to 19.2% (+774bps).
| Net Revenue HCRIS | $3.6M |
| Current EBITDA COMPUTED | $414K |
| Operating Margin COMPUTED | 11.5% |
| Occupancy HCRIS | 81.2% |
| Revenue / Bed COMPUTED | $301K |
| Net-to-Gross HCRIS | 50.5% |
| Distress Probability ML | nan% |
2. Market Context & Competitive Position
UT has 59 Medicare-certified hospitals with a median operating margin of 8.0%. The target's margin of 11.5% places it above the state median. Among 13 size-comparable peers (6-24 beds), the median margin is 0.5%. The target performs in line with or above peers.
3. RCM Performance Analysis — Comparable Hospitals
Comps selected by bed count (6-24), prioritizing same-state peers. 13 hospitals in the comp set.
| Hospital | State | Beds | Revenue | Margin |
|---|---|---|---|---|
| MARIAN CENTER (Target) | UT | 12 | $3.6M | 11.5% |
| SPANISH FORK HOSPITAL | UT | 16 | $65.3M | 0.5% |
| 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% |
| OREM COMMUNITY HOSPITAL | UT | 24 | $34.2M | 4.9% |
| BEAR RIVER VALLEY HOSPITAL | UT | 16 | $34.2M | 9.5% |
| SANPETE VALLEY HOSPITAL | UT | 16 | $28.3M | 4.8% |
| SAN JUAN HEALTH SERVICES DISTR | UT | 21 | $19.3M | -12.9% |
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: $280K (774bps margin improvement).
| Lever | Current | Target | EBITDA Impact | Margin | Ramp |
|---|---|---|---|---|---|
| Denial Rate Reduction | 12.0% | 6.5% | $78K | +215bp | 12mo |
| Net Collection Rate | 93.5% | 97.0% | $76K | +210bp | 18mo |
| Cost to Collect | 4.5% | 2.5% | $72K | +200bp | 12mo |
| A/R Days Reduction | 5200.0% | 3800.0% | $44K | +122bp | 9mo |
| Clean Claim Rate | 88.0% | 96.0% | $10K | +27bp | 6mo |
5. EBITDA Bridge
| Current EBITDA | $414K |
| + RCM Uplift | +$280K |
| Pro Forma EBITDA | $694K |
| Current Margin | 11.5% |
| Pro Forma Margin | 19.2% |
| WC Released (1x) | $139K |
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 | $637K | $5.5M | 8.68x | 54.0% |
| Base (11x exit) | 10.0x | 11.0x | $637K | $6.3M | 9.87x | 58.1% |
| Bull Case | 9.0x | 11.0x | $573K | $7.4M | 12.94x | 66.9% |
| Bull (12x exit) | 9.0x | 12.0x | $573K | $8.3M | 14.41x | 70.5% |
| Bear Case | 11.0x | 10.0x | $701K | $3.9M | 5.60x | 41.1% |
| Bear (11x exit) | 11.0x | 11.0x | $701K | $4.5M | 6.48x | 45.3% |
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
- 13 hospitals with 6-24 beds
- Same-state prioritization (n=14)
- Comp margins: P25=-3.4% / P50=0.5% / P75=5.3%
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.