ML Analysis — TANNER MEDICAL CENTER ALABAMA INC.
CCN 011306 | 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.
47
/ 100 (C)
Financial Health3/25
RCM Upside19/25
Market Position15/20
Demand Defensibility7/15
Operational Efficiency4/15
Entry Multiple: 8.0x – 10.0x
Est. MOIC: 1.9x
Risk Factors:
- Negative operating margin
- Small facility (<50 beds) — limited scale
- Low occupancy (<30%) — demand risk
- Expenses exceed revenue
Catalysts:
- Strong commercial payer base protects revenue
- Limited competition supports pricing power
Margin Prediction (Trained Ridge Model)
-16.0%
R²=0.34 | n=4,907 | Grade B | Actual: -12.0%
Ridge regression trained on 4,907 HCRIS hospitals. 90% CI: [-44.3%, 12.3%]. P26 nationally.
| Driver | Value | Effect | Explanation | |
|---|---|---|---|---|
| Revenue/Bed | 1002163.333 | -0.0806 | Lower Revenue/Bed decreases predicted margin | |
| Expense/Bed | 1122163.533 | +0.0659 | Higher Expense/Bed increases predicted margin | |
| Log(Beds) | 2.708 | -0.0387 | Lower Log(Beds) decreases predicted margin | |
| State Peer Margin | -0.085 | -0.0292 | Lower State Peer Margin decreases predicted margin | |
| Bed Count | 15.000 | +0.0209 | Higher Bed Count increases predicted margin |
Turnaround: 24%Low turnaround probability (24%). Structural disadvantages in Revenue/Bed and Expense/Bed.
Rural/Critical Access
Archetype
54.9%
Distress Risk
$1.1M
RCM Opportunity
C
Opportunity Grade
-4.8%
Projected Margin
Cluster: Rural/Critical Access
Percentile within cluster: P48. Rural/small hospitals face structural headwinds. Evaluate CAH conversion, telehealth, and rural health funding.
Nearest Peers
| Hospital | State | Beds |
|---|---|---|
| BRECKINRIDGE HEALTH INC | KY | 25 |
| SHERIDAN MEMORIAL HOSPITAL | MT | 19 |
| DAYTON GENERAL HOSPITAL | WA | 25 |
| BLUE MOUNTAIN HOSPITAL DISTRICT | OR | 16 |
| COMMUNITY HOSPITAL | WY | 25 |
| CARLE EUREKA HOSPITAL | IL | 25 |
Distress Analysis
Risk: High
National distress rate: 49.3%
AL distress rate: 58.3%
Model AUC: 0.629
| Factor | Value | Contribution | Direction |
|---|---|---|---|
| Occupancy Rate | 0.267 | +0.240 | ▲ risk |
| Revenue Per Bed | 1002163.333 | +0.034 | ▲ risk |
| Medicaid Day Pct | 0.056 | -0.033 | ▼ risk |
| Beds | 15.000 | -0.018 | ▼ risk |
| Medicare Day Pct | 0.414 | +0.015 | ▲ risk |
| Net To Gross Ratio | 0.335 | -0.015 | ▼ risk |
RCM Improvement Opportunity
Total (risk-adjusted): $1.1M
Current margin: -12.0%
Projected margin: -4.8%
Grade: C
Comps: 17
Gap analysis vs P75 peers with 60% closure assumption. Confidence-weighted by lever implementation difficulty.
| Lever | Current | Benchmark | Gap | Impact | Confidence | Timeline |
|---|---|---|---|---|---|---|
| Occupancy Improvement | 0.267 | 0.347 | 8.1% | $533K | 55% | 24mo |
| Payer Mix Optimization | 0.530 | 0.552 | 2.1% | $322K | 50% | 24mo |
| Net-to-Gross Ratio Improvement | 0.335 | 0.464 | 12.9% | $226K | 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 | 33.9 | [25.0, 75.0] | P77 | Average — predicted days in ar is near the median. |
| Clean Claim Rate | 98.0% | [80.0%, 98.0%] | P0 | Strong — predicted clean claim rate is in the top third. |
| Net Collection Rate | 99.3% | [90.0%, 99.5%] | P5 | Strong — predicted net collection rate is in the top third. |