ML Analysis — SUMMIT HEALTHCARE
CCN 030062 | Clustering + Distress + RCM Opportunity
🛡️ Public data only — no PHI permitted on this instance.
Investability Score
Buy — solid fundamentals with identifiable value creation levers. Proceed to detailed diligence.
61
/ 100 (B)
Financial Health12/25
RCM Upside18/25
Market Position13/20
Demand Defensibility11/15
Operational Efficiency6/15
Entry Multiple: 9.5x – 11.5x
Est. MOIC: 2.3x
Risk Factors:
- Negative operating margin
Catalysts:
- Strong commercial payer base protects revenue
Margin Prediction (Trained Ridge Model)
2.8%
R²=0.34 | n=4,907 | Grade B | Actual: -2.9%
Ridge regression trained on 4,907 HCRIS hospitals. 90% CI: [-25.5%, 31.1%]. P69 nationally.
| Driver | Value | Effect | Explanation | |
|---|---|---|---|---|
| Revenue/Bed | 2854879.326 | +0.1781 | Higher Revenue/Bed increases predicted margin | |
| Expense/Bed | 2937337.416 | -0.1577 | Higher Expense/Bed decreases predicted margin | |
| State Peer Margin | -0.008 | +0.0279 | Higher State Peer Margin increases predicted margi | |
| Bed Utilization Value | 1672589.298 | +0.0265 | Higher Bed Utilization Value increases predicted m | |
| Net-to-Gross | 0.276 | -0.0104 | Lower Net-to-Gross decreases predicted margin |
Turnaround: 55%Turnaround possible (55%) but uncertain. Margin improvement depends on Revenue/Bed.
Suburban Community Hospit
Archetype
44.5%
Distress Risk
$9.5M
RCM Opportunity
D
Opportunity Grade
0.9%
Projected Margin
Cluster: Suburban Community Hospital
Percentile within cluster: P13. 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%
AZ distress rate: 35.5%
Model AUC: 0.629
| Factor | Value | Contribution | Direction |
|---|---|---|---|
| Revenue Per Bed | 2854879.326 | -0.075 | ▼ risk |
| Occupancy Rate | 0.586 | -0.056 | ▼ risk |
| Net To Gross Ratio | 0.276 | -0.041 | ▼ risk |
| Medicaid Day Pct | 0.079 | -0.010 | ▼ risk |
| Beds | 89.000 | -0.008 | ▼ risk |
| Medicare Day Pct | 0.311 | -0.003 | ▼ risk |
RCM Improvement Opportunity
Total (risk-adjusted): $9.5M
Current margin: -2.9%
Projected margin: 0.9%
Grade: D
Comps: 55
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 | 0.276 | 0.469 | 19.4% | $5.8M | 65% | 18mo |
| Payer Mix Optimization | 0.610 | 0.791 | 18.0% | $2.7M | 50% | 24mo |
| Occupancy Improvement | 0.586 | 0.742 | 15.6% | $1.0M | 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 | 26.5 | [25.0, 75.0] | P37 | 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. |