ML Analysis — ENCOMPASS HEALTH REHABILITATION HOSP
CCN 083026 | 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.
40
/ 100 (D)
Financial Health16/25
RCM Upside5/25
Market Position4/20
Demand Defensibility6/15
Operational Efficiency9/15
Entry Multiple: 8.0x – 10.0x
Est. MOIC: 1.9x
Risk Factors:
- Heavy Medicare dependence (>55%)
- Small facility (<50 beds) — limited scale
Catalysts:
Margin Prediction (Trained Ridge Model)
10.9%
R²=0.34 | n=4,907 | Grade B | Actual: 28.0%
Ridge regression trained on 4,907 HCRIS hospitals. 90% CI: [-17.3%, 39.2%]. P83 nationally.
| Driver | Value | Effect | Explanation | |
|---|---|---|---|---|
| Expense/Bed | 525095.725 | +0.1395 | Higher Expense/Bed increases predicted margin | |
| Revenue/Bed | 729744.650 | -0.1186 | Lower Revenue/Bed decreases predicted margin | |
| Net-to-Gross | 0.861 | +0.0552 | Higher Net-to-Gross increases predicted margin | |
| Occupancy × Net-to-Gross | 0.839 | +0.0487 | Higher Occupancy × Net-to-Gross increases predicte | |
| State Peer Margin | 0.007 | +0.0391 | Higher State Peer Margin increases predicted margi |
nan%
Distress Risk
$5.4M
RCM Opportunity
A
Opportunity Grade
46.6%
Projected Margin
Distress Analysis
Risk: Unknown
National distress rate: 49.3%
DE distress rate: 28.6%
Model AUC: 0.629
| Factor | Value | Contribution | Direction |
|---|---|---|---|
| Occupancy Rate | 0.975 | -0.417 | ▼ risk |
| Medicare Day Pct | 0.698 | +0.064 | ▲ risk |
| Medicaid Day Pct | nan | +nan | ▼ risk |
| Net To Gross Ratio | 0.861 | +0.219 | ▲ risk |
| Revenue Per Bed | 729744.650 | +0.050 | ▲ risk |
| Beds | 40.000 | -0.015 | ▼ risk |
RCM Improvement Opportunity
Total (risk-adjusted): $5.4M
Current margin: 28.0%
Projected margin: 46.6%
Grade: A
Comps: 2737
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 | 0.302 | 0.663 | 36.1% | $5.4M | 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. |