ML Analysis — ENCOMPASS HEALTH REHABILITATION HOSP
CCN 053034 | 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 Health4/25
RCM Upside19/25
Market Position2/20
Demand Defensibility12/15
Operational Efficiency4/15
Entry Multiple: 8.0x – 10.0x
Est. MOIC: 1.9x
Risk Factors:
- Negative operating margin
- Expenses exceed revenue
Catalysts:
Margin Prediction (Trained Ridge Model)
-4.7%
R²=0.34 | n=4,907 | Grade B | Actual: -5.1%
Ridge regression trained on 4,907 HCRIS hospitals. 90% CI: [-33.0%, 23.6%]. P50 nationally.
| Driver | Value | Effect | Explanation | |
|---|---|---|---|---|
| Revenue/Bed | 488353.554 | -0.1523 | Lower Revenue/Bed decreases predicted margin | |
| Expense/Bed | 513301.861 | +0.1409 | Higher Expense/Bed increases predicted margin | |
| Reimbursement Quality | 0.331 | -0.0374 | Higher Reimbursement Quality decreases predicted m | |
| Net-to-Gross | 0.595 | +0.0254 | Higher Net-to-Gross increases predicted margin | |
| Occupancy × Net-to-Gross | 0.478 | +0.0218 | Higher Occupancy × Net-to-Gross increases predicte |
Turnaround: 42%Turnaround possible (42%) but uncertain. Margin improvement depends on improving Revenue/Bed.
nan%
Distress Risk
$2.5M
RCM Opportunity
C
Opportunity Grade
2.7%
Projected Margin
Distress Analysis
Risk: Unknown
National distress rate: 49.3%
CA distress rate: 49.7%
Model AUC: 0.629
| Factor | Value | Contribution | Direction |
|---|---|---|---|
| Occupancy Rate | 0.805 | -0.259 | ▼ risk |
| Medicare Day Pct | 0.443 | +0.020 | ▲ risk |
| Medicaid Day Pct | nan | +nan | ▼ risk |
| Net To Gross Ratio | 0.595 | +0.101 | ▲ risk |
| Revenue Per Bed | 488353.554 | +0.064 | ▲ risk |
| Beds | 65.000 | -0.011 | ▼ risk |
RCM Improvement Opportunity
Total (risk-adjusted): $2.5M
Current margin: -5.1%
Projected margin: 2.7%
Grade: C
Comps: 131
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 | 0.557 | 0.722 | 16.4% | $2.5M | 50% | 24mo |
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. |