ML Analysis — CORNERSTONE SPECIALTY LITTLE ROCK
CCN 042010 | Clustering + Distress + RCM Opportunity
🛡️ Public data only — no PHI permitted on this instance.
Investability Score
Speculative — only pursue if turnaround thesis is strong and entry multiple reflects risk.
41
/ 100 (D)
Financial Health9/25
RCM Upside13/25
Market Position9/20
Demand Defensibility9/15
Operational Efficiency1/15
Entry Multiple: 8.0x – 10.0x
Est. MOIC: 1.9x
Risk Factors:
- Small facility (<50 beds) — limited scale
Catalysts:
- Strong commercial payer base protects revenue
Margin Prediction (Trained Ridge Model)
-10.0%
R²=0.34 | n=4,907 | Grade B | Actual: 4.2%
Ridge regression trained on 4,907 HCRIS hospitals. 90% CI: [-38.3%, 18.3%]. P37 nationally.
| Driver | Value | Effect | Explanation | |
|---|---|---|---|---|
| Revenue/Bed | 380611.075 | -0.1673 | Lower Revenue/Bed decreases predicted margin | |
| Expense/Bed | 364650.675 | +0.1592 | Higher Expense/Bed increases predicted margin | |
| State Peer Margin | -0.075 | -0.0222 | Lower State Peer Margin decreases predicted margin | |
| Reimbursement Quality | 0.126 | +0.0218 | Higher Reimbursement Quality increases predicted m | |
| Bed Utilization Value | 218955.645 | -0.0217 | Lower Bed Utilization Value decreases predicted ma |
Suburban Community Hospit
Archetype
46.8%
Distress Risk
$1.7M
RCM Opportunity
B
Opportunity Grade
15.0%
Projected Margin
Cluster: Suburban Community Hospital
Percentile within cluster: P30. 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 |
|---|---|---|---|
| Revenue Per Bed | 380611.075 | +0.071 | ▲ risk |
| Medicaid Day Pct | 0.020 | -0.069 | ▼ risk |
| Net To Gross Ratio | 0.234 | -0.060 | ▼ risk |
| Occupancy Rate | 0.575 | -0.047 | ▼ risk |
| Medicare Day Pct | 0.441 | +0.020 | ▲ risk |
| Beds | 40.000 | -0.015 | ▼ risk |
RCM Improvement Opportunity
Total (risk-adjusted): $1.7M
Current margin: 4.2%
Projected margin: 15.0%
Grade: B
Comps: 65
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 | 0.539 | 0.583 | 4.5% | $670K | 50% | 24mo |
| Occupancy Improvement | 0.575 | 0.655 | 8.0% | $525K | 55% | 24mo |
| Net-to-Gross Ratio Improvement | 0.234 | 0.489 | 25.6% | $455K | 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 | 29.1 | [25.0, 75.0] | P52 | 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. |