ML Analysis — MERCY REHAB HOSPITAL FORT SMITH
CCN 043037 | 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.
44
/ 100 (D)
Financial Health15/25
RCM Upside5/25
Market Position10/20
Demand Defensibility4/15
Operational Efficiency9/15
Entry Multiple: 8.0x – 10.0x
Est. MOIC: 1.9x
Risk Factors:
- Heavy Medicare dependence (>55%)
Catalysts:
Margin Prediction (Trained Ridge Model)
-7.4%
R²=0.34 | n=4,907 | Grade B | Actual: 18.7%
Ridge regression trained on 4,907 HCRIS hospitals. 90% CI: [-35.7%, 20.9%]. P43 nationally.
| Driver | Value | Effect | Explanation | |
|---|---|---|---|---|
| Revenue/Bed | 320881.820 | -0.1757 | Lower Revenue/Bed decreases predicted margin | |
| Expense/Bed | 260831.280 | +0.1720 | Higher Expense/Bed increases predicted margin | |
| Reimbursement Quality | 0.118 | +0.0241 | Higher Reimbursement Quality increases predicted m | |
| Bed Utilization Value | 159473.869 | -0.0237 | Lower Bed Utilization Value decreases predicted ma | |
| State Peer Margin | -0.075 | -0.0222 | Lower State Peer Margin decreases predicted margin |
Rural/Critical Access
Archetype
51.9%
Distress Risk
$5.6M
RCM Opportunity
A
Opportunity Grade
53.4%
Projected Margin
Cluster: Rural/Critical Access
Percentile within cluster: P88. Rural/small hospitals face structural headwinds. Evaluate CAH conversion, telehealth, and rural health funding.
Nearest Peers
| Hospital | State | Beds |
|---|---|---|
| BRECKINRIDGE HEALTH INC | KY | 25 |
| SHERIDAN MEMORIAL HOSPITAL | MT | 19 |
| DAYTON GENERAL HOSPITAL | WA | 25 |
| BLUE MOUNTAIN HOSPITAL DISTRICT | OR | 16 |
| COMMUNITY HOSPITAL | WY | 25 |
| CARLE EUREKA HOSPITAL | IL | 25 |
Distress Analysis
Risk: High
National distress rate: 49.3%
AR distress rate: 53.3%
Model AUC: 0.629
| Factor | Value | Contribution | Direction |
|---|---|---|---|
| Medicaid Day Pct | 0.010 | -0.079 | ▼ risk |
| Revenue Per Bed | 320881.820 | +0.074 | ▲ risk |
| Medicare Day Pct | 0.717 | +0.067 | ▲ risk |
| Net To Gross Ratio | 0.431 | +0.028 | ▲ risk |
| Occupancy Rate | 0.497 | +0.026 | ▲ risk |
| Beds | 50.000 | -0.013 | ▼ risk |
RCM Improvement Opportunity
Total (risk-adjusted): $5.6M
Current margin: 18.7%
Projected margin: 53.4%
Grade: A
Comps: 59
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 | 0.273 | 0.568 | 29.6% | $4.4M | 50% | 24mo |
| Occupancy Improvement | 0.497 | 0.653 | 15.6% | $1.0M | 55% | 24mo |
| Net-to-Gross Ratio Improvement | 0.431 | 0.485 | 5.4% | $102K | 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 | 27.4 | [25.0, 75.0] | P40 | 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. |