ML Analysis — BAXTER REGIONAL MEDICAL CENTER
CCN 040027 | 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.
60
/ 100 (B)
Financial Health9/25
RCM Upside18/25
Market Position15/20
Demand Defensibility12/15
Operational Efficiency6/15
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)
-5.4%
R²=0.34 | n=4,907 | Grade B | Actual: -2.8%
Ridge regression trained on 4,907 HCRIS hospitals. 90% CI: [-33.7%, 22.9%]. P48 nationally.
| Driver | Value | Effect | Explanation | |
|---|---|---|---|---|
| State Peer Margin | -0.075 | -0.0222 | Lower State Peer Margin decreases predicted margin | |
| Log(Beds) | 5.130 | +0.0176 | Higher Log(Beds) increases predicted margin | |
| Revenue/Bed | 1669564.633 | +0.0126 | Higher Revenue/Bed increases predicted margin | |
| Expense/Bed | 1716012.219 | -0.0072 | Higher Expense/Bed decreases predicted margin | |
| Bed Utilization Value | 1010075.100 | +0.0045 | Bed Utilization Value has minimal effect |
Turnaround: 40%Turnaround possible (40%) but uncertain. Margin improvement depends on improving State Peer Margin.
Suburban Community Hospit
Archetype
46.9%
Distress Risk
$1.2M
RCM Opportunity
D
Opportunity Grade
-2.4%
Projected Margin
Cluster: Suburban Community Hospital
Percentile within cluster: P15. 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%
AR distress rate: 53.3%
Model AUC: 0.629
| Factor | Value | Contribution | Direction |
|---|---|---|---|
| Occupancy Rate | 0.605 | -0.074 | ▼ risk |
| Medicaid Day Pct | 0.072 | -0.017 | ▼ risk |
| Net To Gross Ratio | 0.354 | -0.006 | ▼ risk |
| Revenue Per Bed | 1669564.633 | -0.005 | ▼ risk |
| Medicare Day Pct | 0.344 | +0.003 | ▲ risk |
| Beds | 169.000 | +0.003 | ▲ risk |
RCM Improvement Opportunity
Total (risk-adjusted): $1.2M
Current margin: -2.8%
Projected margin: -2.4%
Grade: D
Comps: 24
Gap analysis vs P75 peers with 60% closure assumption. Confidence-weighted by lever implementation difficulty.
| Lever | Current | Benchmark | Gap | Impact | Confidence | Timeline |
|---|---|---|---|---|---|---|
| Occupancy Improvement | 0.605 | 0.696 | 9.1% | $600K | 55% | 24mo |
| Payer Mix Optimization | 0.585 | 0.623 | 3.9% | $580K | 50% | 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 | 25.0 | [25.0, 75.0] | P0 | 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. |