ML Analysis — NORWALK HOSPITAL
CCN 070034 | 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.
56
/ 100 (C)
Financial Health8/25
RCM Upside19/25
Market Position11/20
Demand Defensibility14/15
Operational Efficiency4/15
Entry Multiple: 9.5x – 11.5x
Est. MOIC: 2.3x
Risk Factors:
- Negative operating margin
- Expenses exceed revenue
Catalysts:
- RCM optimization could add 3-5pp margin
- Strong commercial payer base protects revenue
Margin Prediction (Trained Ridge Model)
-10.0%
R²=0.34 | n=4,907 | Grade B | Actual: -17.7%
Ridge regression trained on 4,907 HCRIS hospitals. 90% CI: [-38.3%, 18.3%]. P37 nationally.
| Driver | Value | Effect | Explanation | |
|---|---|---|---|---|
| Log(Beds) | 5.385 | +0.0235 | Higher Log(Beds) increases predicted margin | |
| Reimbursement Quality | 0.131 | +0.0203 | Higher Reimbursement Quality increases predicted m | |
| Expense/Bed | 1808622.661 | -0.0187 | Higher Expense/Bed decreases predicted margin | |
| State Peer Margin | -0.068 | -0.0169 | Lower State Peer Margin decreases predicted margin | |
| Bed Count | 218.000 | -0.0108 | Higher Bed Count decreases predicted margin |
Turnaround: 33%Turnaround possible (33%) but uncertain. Margin improvement depends on Log(Beds).
Under-Performing / Distre
Archetype
51.2%
Distress Risk
$5.2M
RCM Opportunity
D
Opportunity Grade
-16.2%
Projected Margin
Cluster: Under-Performing / Distressed
Percentile within cluster: P62. 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%
CT distress rate: 74.3%
Model AUC: 0.629
| Factor | Value | Contribution | Direction |
|---|---|---|---|
| Medicaid Day Pct | 0.168 | +0.079 | ▲ risk |
| Net To Gross Ratio | 0.295 | -0.033 | ▼ risk |
| Medicare Day Pct | 0.387 | +0.010 | ▲ risk |
| Beds | 218.000 | +0.009 | ▲ risk |
| Occupancy Rate | 0.517 | +0.008 | ▲ risk |
| Revenue Per Bed | 1536190.376 | +0.003 | ▲ risk |
RCM Improvement Opportunity
Total (risk-adjusted): $5.2M
Current margin: -17.7%
Projected margin: -16.2%
Grade: D
Comps: 20
Gap analysis vs P75 peers with 60% closure assumption. Confidence-weighted by lever implementation difficulty.
| Lever | Current | Benchmark | Gap | Impact | Confidence | Timeline |
|---|---|---|---|---|---|---|
| Occupancy Improvement | 0.517 | 0.808 | 29.1% | $1.9M | 55% | 24mo |
| Payer Mix Optimization | 0.444 | 0.554 | 11.0% | $1.6M | 50% | 24mo |
| Net-to-Gross Ratio Improvement | 0.295 | 0.335 | 4.1% | $1.6M | 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 | 26.4 | [25.0, 75.0] | P36 | 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. |