ML Analysis — CULLMAN REGIONAL
CCN 010035 | Clustering + Distress + RCM Opportunity
🛡️ Public data only — no PHI permitted on this instance.
Investability Score
Hold / Selective — investigate specific opportunities but be prepared for execution risk.
57
/ 100 (C)
Financial Health9/25
RCM Upside19/25
Market Position15/20
Demand Defensibility12/15
Operational Efficiency2/15
Entry Multiple: 9.5x – 11.5x
Est. MOIC: 2.3x
Risk Factors:
- Negative operating margin
Catalysts:
- RCM optimization could add 3-5pp margin
- Strong commercial payer base protects revenue
- Limited competition supports pricing power
Margin Prediction (Trained Ridge Model)
-8.1%
R²=0.34 | n=4,907 | Grade B | Actual: -4.9%
Ridge regression trained on 4,907 HCRIS hospitals. 90% CI: [-36.4%, 20.2%]. P42 nationally.
| Driver | Value | Effect | Explanation | |
|---|---|---|---|---|
| Revenue/Bed | 1219549.759 | -0.0502 | Lower Revenue/Bed decreases predicted margin | |
| Expense/Bed | 1278761.628 | +0.0466 | Higher Expense/Bed increases predicted margin | |
| State Peer Margin | -0.085 | -0.0292 | Lower State Peer Margin decreases predicted margin | |
| Reimbursement Quality | 0.133 | +0.0196 | Higher Reimbursement Quality increases predicted m | |
| Net-to-Gross | 0.237 | -0.0148 | Lower Net-to-Gross decreases predicted margin |
Turnaround: 36%Turnaround possible (36%) but uncertain. Margin improvement depends on improving Revenue/Bed.
Suburban Community Hospit
Archetype
46.7%
Distress Risk
$4.5M
RCM Opportunity
D
Opportunity Grade
-2.2%
Projected Margin
Cluster: Suburban Community Hospital
Percentile within cluster: P35. Community hospitals — the largest PE deal category. Focus on RCM improvement and cost optimization at 9-11x.
Nearest Peers
| Hospital | State | Beds |
|---|---|---|
| PROMEDICA HICKMAN HOSPITAL | MI | 58 |
| WATAUGA MEDICAL CENTER | NC | 95 |
| ST LUKES HOSPITAL - EASTON CAMPUS | PA | 29 |
| CULPEPER MEMORIAL HOSPITAL | VA | 70 |
| SOUTHSIDE COMMUNITY HOSPITAL | VA | 80 |
| SPECTRUM HEALTH LUDINGTON | MI | 45 |
Distress Analysis
Risk: Elevated
National distress rate: 49.3%
AL distress rate: 58.3%
Model AUC: 0.629
| Factor | Value | Contribution | Direction |
|---|---|---|---|
| Occupancy Rate | 0.633 | -0.100 | ▼ risk |
| Net To Gross Ratio | 0.237 | -0.059 | ▼ risk |
| Medicaid Day Pct | 0.125 | +0.036 | ▲ risk |
| Revenue Per Bed | 1219549.759 | +0.021 | ▲ risk |
| Medicare Day Pct | 0.313 | -0.002 | ▼ risk |
| Beds | 137.000 | -0.002 | ▼ risk |
RCM Improvement Opportunity
Total (risk-adjusted): $4.5M
Current margin: -4.9%
Projected margin: -2.2%
Grade: D
Comps: 32
Gap analysis vs P75 peers with 60% closure assumption. Confidence-weighted by lever implementation difficulty.
| Lever | Current | Benchmark | Gap | Impact | Confidence | Timeline |
|---|---|---|---|---|---|---|
| Net-to-Gross Ratio Improvement | 0.237 | 0.358 | 12.1% | $2.4M | 65% | 18mo |
| Payer Mix Optimization | 0.562 | 0.638 | 7.6% | $1.1M | 50% | 24mo |
| Occupancy Improvement | 0.633 | 0.779 | 14.6% | $961K | 55% | 24mo |
Predicted RCM Performance (Public Data Only)
A
RCM Grade
Strong RCM profile — likely low-risk from an operations perspective. Focus diligence on growth thesis.
| Metric | Predicted | 90% CI | Percentile | Assessment |
|---|---|---|---|---|
| Denial Rate | 2.0% | [2.0%, 25.0%] | P0 | Strong — predicted denial rate is in the top third nationall |
| Days in AR | 25.8 | [25.0, 75.0] | P33 | Strong — predicted days in ar is in the top third nationally |
| Clean Claim Rate | 98.0% | [80.0%, 98.0%] | P0 | Strong — predicted clean claim rate is in the top third. |
| Net Collection Rate | 99.5% | [90.0%, 99.5%] | P8 | Strong — predicted net collection rate is in the top third. |