ML Analysis — DREW MEMORIAL HOSPITAL INC
CCN 040051 | 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 Health4/25
RCM Upside19/25
Market Position14/20
Demand Defensibility7/15
Operational Efficiency2/15
Entry Multiple: 8.0x – 10.0x
Est. MOIC: 1.9x
Risk Factors:
- Negative operating margin
- Small facility (<50 beds) — limited scale
- Expenses exceed revenue
Catalysts:
- Strong commercial payer base protects revenue
- Limited competition supports pricing power
Margin Prediction (Trained Ridge Model)
-14.0%
R²=0.34 | n=4,907 | Grade B | Actual: -27.2%
Ridge regression trained on 4,907 HCRIS hospitals. 90% CI: [-42.3%, 14.3%]. P29 nationally.
| Driver | Value | Effect | Explanation | |
|---|---|---|---|---|
| Revenue/Bed | 721172.816 | -0.1198 | Lower Revenue/Bed decreases predicted margin | |
| Expense/Bed | 917524.429 | +0.0911 | Higher Expense/Bed increases predicted margin | |
| State Peer Margin | -0.075 | -0.0222 | Lower State Peer Margin decreases predicted margin | |
| Bed Utilization Value | 257218.976 | -0.0204 | Lower Bed Utilization Value decreases predicted ma | |
| Reimbursement Quality | 0.140 | +0.0177 | Higher Reimbursement Quality increases predicted m |
Turnaround: 27%Low turnaround probability (27%). Structural disadvantages in Revenue/Bed and Expense/Bed.
Under-Performing / Distre
Archetype
54.9%
Distress Risk
$4.8M
RCM Opportunity
B
Opportunity Grade
-13.7%
Projected Margin
Cluster: Under-Performing / Distressed
Percentile within cluster: P23. Deeply negative margins signal severe distress. Evaluate asset-level acquisition at 4-6x normalized EBITDA.
Nearest Peers
| Hospital | State | Beds |
|---|---|---|
| HOLY FAMILY MEMORIAL INC | WI | 58 |
| MIDDLESBORO ARH | KY | 46 |
| ATRIUM HEALTH NAVICENT BALDWIN | GA | 86 |
| BON SECOURS COMMUNITY HOSPITAL | NY | 98 |
| ADVANCED SPECIALTY HOSP. OF TOLEDO | OH | 40 |
| COMMUNITY HEALTH CENTER BRANCH | MI | 75 |
Distress Analysis
Risk: High
National distress rate: 49.3%
AR distress rate: 53.3%
Model AUC: 0.629
| Factor | Value | Contribution | Direction |
|---|---|---|---|
| Occupancy Rate | 0.357 | +0.156 | ▲ risk |
| Revenue Per Bed | 721172.816 | +0.051 | ▲ risk |
| Medicaid Day Pct | 0.116 | +0.027 | ▲ risk |
| Medicare Day Pct | 0.458 | +0.022 | ▲ risk |
| Net To Gross Ratio | 0.328 | -0.018 | ▼ risk |
| Beds | 49.000 | -0.013 | ▼ risk |
RCM Improvement Opportunity
Total (risk-adjusted): $4.8M
Current margin: -27.2%
Projected margin: -13.7%
Grade: B
Comps: 58
Gap analysis vs P75 peers with 60% closure assumption. Confidence-weighted by lever implementation difficulty.
| Lever | Current | Benchmark | Gap | Impact | Confidence | Timeline |
|---|---|---|---|---|---|---|
| Payer Mix Optimization | 0.426 | 0.569 | 14.3% | $2.1M | 50% | 24mo |
| Occupancy Improvement | 0.357 | 0.659 | 30.2% | $2.0M | 55% | 24mo |
| Net-to-Gross Ratio Improvement | 0.328 | 0.487 | 15.9% | $657K | 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 | 31.7 | [25.0, 75.0] | P69 | 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. |