ML Analysis — ENCORE MEDICAL CENTER
CCN 040161 | 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.
50
/ 100 (C)
Financial Health7/25
RCM Upside19/25
Market Position8/20
Demand Defensibility10/15
Operational Efficiency6/15
Entry Multiple: 8.0x – 10.0x
Est. MOIC: 1.9x
Risk Factors:
- Negative operating margin
- Small facility (<50 beds) — limited scale
Catalysts:
- Limited competition supports pricing power
Margin Prediction (Trained Ridge Model)
-4.1%
R²=0.34 | n=4,907 | Grade B | Actual: -4.7%
Ridge regression trained on 4,907 HCRIS hospitals. 90% CI: [-32.4%, 24.2%]. P51 nationally.
| Driver | Value | Effect | Explanation | |
|---|---|---|---|---|
| Revenue/Bed | 2229263.680 | +0.0907 | Higher Revenue/Bed increases predicted margin | |
| Expense/Bed | 2333022.320 | -0.0833 | Higher Expense/Bed decreases predicted margin | |
| Log(Beds) | 3.219 | -0.0268 | Lower Log(Beds) decreases predicted margin | |
| Bed Utilization Value | 1544482.738 | +0.0223 | Higher Bed Utilization Value increases predicted m | |
| State Peer Margin | -0.075 | -0.0222 | Lower State Peer Margin decreases predicted margin |
Turnaround: 43%Turnaround possible (43%) but uncertain. Margin improvement depends on Revenue/Bed.
nan%
Distress Risk
$1.3M
RCM Opportunity
D
Opportunity Grade
-2.4%
Projected Margin
Distress Analysis
Risk: Unknown
National distress rate: 49.3%
AR distress rate: 53.3%
Model AUC: 0.629
| Factor | Value | Contribution | Direction |
|---|---|---|---|
| Occupancy Rate | 0.693 | -0.156 | ▼ risk |
| Medicare Day Pct | 0.372 | +0.008 | ▲ risk |
| Medicaid Day Pct | nan | +nan | ▼ risk |
| Revenue Per Bed | 2229263.680 | -0.038 | ▼ risk |
| Net To Gross Ratio | 0.292 | -0.034 | ▼ risk |
| Beds | 25.000 | -0.017 | ▼ risk |
RCM Improvement Opportunity
Total (risk-adjusted): $1.3M
Current margin: -4.7%
Projected margin: -2.4%
Grade: D
Comps: 52
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 | 0.292 | 0.489 | 19.7% | $1.3M | 65% | 18mo |
Predicted RCM Performance (Public Data Only)
B
RCM Grade
Average RCM profile — some improvement opportunities. Standard diligence scope recommended.
| Metric | Predicted | 90% CI | Percentile | Assessment |
|---|---|---|---|---|
| Denial Rate | 25.0% | [2.0%, 25.0%] | P83 | Below average — denial rate suggests RCM improvement opportu |
| Days in AR | 75.0 | [25.0, 75.0] | P83 | Below average — days in ar suggests RCM improvement opportun |
| 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. |