HOSPITALS OF PROV TRANSMOUNTAIN CAMP
1. Target Overview & Investment Thesis
HOSPITALS OF PROV TRANSMOUNTAIN CAMP is a 108-bed suburban community hospital in EL PASO, TX with $143.7M in net patient revenue and a 5.9% operating margin. The hospital serves a payer mix of 20.2% Medicare, 4.9% Medicaid, and 74.8% commercial.
Thesis: Turnaround. Our ML models identify $10.6M in annual EBITDA improvement potential from RCM optimization across 5 levers, lifting margin from 5.9% to 13.3% (+736bps).
| Net Revenue HCRIS | $143.7M |
| Current EBITDA COMPUTED | $8.5M |
| Operating Margin COMPUTED | 5.9% |
| Occupancy HCRIS | 65.0% |
| Revenue / Bed COMPUTED | $1.3M |
| Net-to-Gross HCRIS | 10.7% |
| Distress Probability ML | 42.3% |
2. Market Context & Competitive Position
TX has 583 Medicare-certified hospitals with a median operating margin of -0.7%. The target's margin of 5.9% places it above the state median. Among 191 size-comparable peers (54-216 beds), the median margin is 2.2%. The target performs in line with or above peers.
3. RCM Performance Analysis — Comparable Hospitals
Comps selected by bed count (54-216), prioritizing same-state peers. 191 hospitals in the comp set.
| Hospital | State | Beds | Revenue | Margin |
|---|---|---|---|---|
| HOSPITALS OF PROV TRANSMOUNTAI (Target) | TX | 108 | $143.7M | 5.9% |
| DRISCOLL CHILDRENS HOSPITAL | TX | 215 | $694.3M | 29.4% |
| ROUND ROCK HOSPITAL | TX | 165 | $681.4M | 8.7% |
| THE HEART HOSPITAL BAYLOR PLAN | TX | 109 | $464.6M | 25.7% |
| COVENANT CHILDRENS HOSPITAL | TX | 181 | $410.3M | 15.5% |
| COLLEGE STATION HOSPITAL | TX | 135 | $397.7M | -0.9% |
| MEMORIAL HERMANN KATY | TX | 196 | $381.4M | 13.3% |
| CHILDRENS HOSPITAL OF SAN ANTO | TX | 174 | $376.5M | -2.8% |
| MEDICAL CITY FORT WORTH | TX | 209 | $375.9M | 22.9% |
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: $10.6M (736bps margin improvement).
| Lever | Current | Target | EBITDA Impact | Margin | Ramp |
|---|---|---|---|---|---|
| Net Collection Rate | 93.5% | 97.0% | $3.0M | +210bp | 18mo |
| Cost to Collect | 4.5% | 2.5% | $2.9M | +200bp | 12mo |
| Denial Rate Reduction | 12.0% | 6.5% | $2.8M | +198bp | 12mo |
| A/R Days Reduction | 5200.0% | 3800.0% | $1.7M | +122bp | 9mo |
| Clean Claim Rate | 88.0% | 96.0% | $92K | +6bp | 6mo |
5. EBITDA Bridge
| Current EBITDA | $8.5M |
| + RCM Uplift | +$10.6M |
| Pro Forma EBITDA | $19.1M |
| Current Margin | 5.9% |
| Pro Forma Margin | 13.3% |
| WC Released (1x) | $5.5M |
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 | $13.1M | $162.1M | 12.35x | 65.3% |
| Base (11x exit) | 10.0x | 11.0x | $13.1M | $182.6M | 13.91x | 69.3% |
| Bull Case | 9.0x | 11.0x | $11.8M | $221.8M | 18.77x | 79.8% |
| Bull (12x exit) | 9.0x | 12.0x | $11.8M | $245.4M | 20.77x | 83.4% |
| Bear Case | 11.0x | 10.0x | $14.4M | $104.9M | 7.27x | 48.7% |
| Bear (11x exit) | 11.0x | 11.0x | $14.4M | $120.1M | 8.32x | 52.8% |
7. Key Risks & Mitigants
| Severity | Risk Factor | Mitigant |
|---|---|---|
| Low | Low net-to-gross ratio | Large contractual allowances suggest pricing discipline issues. Mitigant: payer renegotiation is an additional upside lever |
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
- 191 hospitals with 54-216 beds
- Same-state prioritization (n=192)
- Comp margins: P25=-10.3% / P50=2.2% / P75=11.6%
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.