ML Analysis — SHOALS HOSPITAL
CCN 010157 | Clustering + Distress + RCM Opportunity
🛡️ Public data only — no PHI permitted on this instance.
Investability Score
Speculative — only pursue if turnaround thesis is strong and entry multiple reflects risk.
42
/ 100 (D)
Financial Health2/25
RCM Upside19/25
Market Position15/20
Demand Defensibility6/15
Operational Efficiency0/15
Entry Multiple: 8.0x – 10.0x
Est. MOIC: 1.9x
Risk Factors:
- Negative operating margin
- Expenses exceed revenue
Catalysts:
- Strong commercial payer base protects revenue
- Limited competition supports pricing power
Margin Prediction (Trained Ridge Model)
-15.6%
R²=0.34 | n=4,907 | Grade B | Actual: -14.2%
Ridge regression trained on 4,907 HCRIS hospitals. 90% CI: [-43.9%, 12.7%]. P27 nationally.
| Driver | Value | Effect | Explanation | |
|---|---|---|---|---|
| Revenue/Bed | 587816.679 | -0.1384 | Lower Revenue/Bed decreases predicted margin | |
| Expense/Bed | 671507.472 | +0.1214 | Higher Expense/Bed increases predicted margin | |
| State Peer Margin | -0.085 | -0.0292 | Lower State Peer Margin decreases predicted margin | |
| Bed Utilization Value | 240854.038 | -0.0210 | Lower Bed Utilization Value decreases predicted ma | |
| Medicaid % | 0.245 | -0.0189 | Higher Medicaid % decreases predicted margin |
Turnaround: 25%Low turnaround probability (25%). Structural disadvantages in Revenue/Bed and Expense/Bed.
Safety-Net/Medicaid Heavy
Archetype
54.8%
Distress Risk
$1.7M
RCM Opportunity
D
Opportunity Grade
-8.9%
Projected Margin
Cluster: Safety-Net/Medicaid Heavy
Percentile within cluster: P37. High Medicaid dependence creates reimbursement risk. Assess DSH payments and state expansion status.
Nearest Peers
| Hospital | State | Beds |
|---|---|---|
| WESTERN PEAKS SPECIALTY HOSPITAL | UT | 59 |
| HOSPITAL MENONITA AIBONITO | PR | 129 |
| TOPPENISH COMMUNITY HOSPITAL | WA | 47 |
| MINERAL COMMUNITY HOSPITAL | MT | 25 |
| BANNER UNIVERSITY MED CENTER SOUTH | AZ | 132 |
| NORTH COLORADO MEDICAL CENTER | CO | 202 |
Distress Analysis
Risk: High
National distress rate: 49.3%
AL distress rate: 58.3%
Model AUC: 0.629
| Factor | Value | Contribution | Direction |
|---|---|---|---|
| Medicaid Day Pct | 0.245 | +0.156 | ▲ risk |
| Occupancy Rate | 0.410 | +0.107 | ▲ risk |
| Revenue Per Bed | 587816.679 | +0.059 | ▲ risk |
| Net To Gross Ratio | 0.250 | -0.053 | ▼ risk |
| Medicare Day Pct | 0.119 | -0.036 | ▼ risk |
| Beds | 53.000 | -0.013 | ▼ risk |
RCM Improvement Opportunity
Total (risk-adjusted): $1.7M
Current margin: -14.2%
Projected margin: -8.9%
Grade: D
Comps: 59
Gap analysis vs P75 peers with 60% closure assumption. Confidence-weighted by lever implementation difficulty.
| Lever | Current | Benchmark | Gap | Impact | Confidence | Timeline |
|---|---|---|---|---|---|---|
| Occupancy Improvement | 0.410 | 0.539 | 12.9% | $852K | 55% | 24mo |
| Net-to-Gross Ratio Improvement | 0.250 | 0.469 | 22.0% | $801K | 65% | 18mo |
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 | 30.6 | [25.0, 75.0] | P62 | 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. |