BRAXTON COUNTY MEMORIAL HOSPITAL
1. Target Overview & Investment Thesis
BRAXTON COUNTY MEMORIAL HOSPITAL is a 25-bed suburban community hospital in BRAXTON, WV with $26.7M in net patient revenue and a 10.2% operating margin. The hospital serves a payer mix of 35.4% Medicare, 3.8% Medicaid, and 60.8% commercial.
Thesis: Turnaround. Our ML models identify $2.0M in annual EBITDA improvement potential from RCM optimization across 5 levers, lifting margin from 10.2% to 17.6% (+736bps).
| Net Revenue HCRIS | $26.7M |
| Current EBITDA COMPUTED | $2.7M |
| Operating Margin COMPUTED | 10.2% |
| Occupancy HCRIS | 18.0% |
| Revenue / Bed COMPUTED | $1.1M |
| Net-to-Gross HCRIS | 56.8% |
| Distress Probability ML | 58.6% |
2. Market Context & Competitive Position
WV has 62 Medicare-certified hospitals with a median operating margin of -0.3%. The target's margin of 10.2% places it above the state median. Among 30 size-comparable peers (12-50 beds), the median margin is 0.8%. The target performs in line with or above peers.
3. RCM Performance Analysis — Comparable Hospitals
Comps selected by bed count (12-50), prioritizing same-state peers. 30 hospitals in the comp set.
| Hospital | State | Beds | Revenue | Margin |
|---|---|---|---|---|
| BRAXTON COUNTY MEMORIAL HOSPIT (Target) | WV | 25 | $26.7M | 10.2% |
| ST. JOSEPHS HOSPITAL OF BUCKHA | WV | 25 | $101.4M | 15.7% |
| JEFFERSON MEMORIAL HOSPITAL | WV | 25 | $85.5M | 9.7% |
| POTOMAC VALLEY HOSPITAL | WV | 25 | $69.5M | 16.2% |
| BOONE MEMORIAL HOSPITAL | WV | 25 | $61.8M | -12.0% |
| SUMMERSVILLE REGIONAL MED CENT | WV | 25 | $60.6M | 0.3% |
| ST FRANCIS HOSPITAL | WV | 40 | $58.5M | 30.5% |
| ROANE GENERAL HOSPITAL | WV | 25 | $48.9M | -13.1% |
| JACKSON GENERAL HOSPITAL | WV | 25 | $47.9M | 12.6% |
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: $2.0M (736bps margin improvement).
| Lever | Current | Target | EBITDA Impact | Margin | Ramp |
|---|---|---|---|---|---|
| Net Collection Rate | 93.5% | 97.0% | $561K | +210bp | 18mo |
| Cost to Collect | 4.5% | 2.5% | $534K | +200bp | 12mo |
| Denial Rate Reduction | 12.0% | 6.5% | $529K | +198bp | 12mo |
| A/R Days Reduction | 5200.0% | 3800.0% | $325K | +122bp | 9mo |
| Clean Claim Rate | 88.0% | 96.0% | $17K | +6bp | 6mo |
5. EBITDA Bridge
| Current EBITDA | $2.7M |
| + RCM Uplift | +$2.0M |
| Pro Forma EBITDA | $4.7M |
| Current Margin | 10.2% |
| Pro Forma Margin | 17.6% |
| WC Released (1x) | $1.0M |
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 | $4.2M | $37.7M | 8.96x | 55.0% |
| Base (11x exit) | 10.0x | 11.0x | $4.2M | $42.9M | 10.18x | 59.1% |
| Bull Case | 9.0x | 11.0x | $3.8M | $50.7M | 13.38x | 68.0% |
| Bull (12x exit) | 9.0x | 12.0x | $3.8M | $56.5M | 14.89x | 71.6% |
| Bear Case | 11.0x | 10.0x | $4.6M | $26.5M | 5.72x | 41.8% |
| Bear (11x exit) | 11.0x | 11.0x | $4.6M | $30.7M | 6.62x | 46.0% |
7. Key Risks & Mitigants
| Severity | Risk Factor | Mitigant |
|---|---|---|
| Medium | Low occupancy | At 18.0%, 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 58.6% 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
- 30 hospitals with 12-50 beds
- Same-state prioritization (n=31)
- Comp margins: P25=-12.8% / P50=0.8% / P75=10.2%
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.