ML Analysis — LARKIN COMMUNITY HOSPITAL
CCN 100181 | 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.
47
/ 100 (C)
Financial Health8/25
RCM Upside17/25
Market Position11/20
Demand Defensibility10/15
Operational Efficiency2/15
Entry Multiple: 8.0x – 10.0x
Est. MOIC: 1.9x
Risk Factors:
- Negative operating margin
Catalysts:
- RCM optimization could add 3-5pp margin
- Strong commercial payer base protects revenue
Margin Prediction (Trained Ridge Model)
-1.0%
R²=0.34 | n=4,907 | Grade B | Actual: -2.2%
Ridge regression trained on 4,907 HCRIS hospitals. 90% CI: [-29.3%, 27.3%]. P60 nationally.
| Driver | Value | Effect | Explanation | |
|---|---|---|---|---|
| Revenue/Bed | 838904.542 | -0.1034 | Lower Revenue/Bed decreases predicted margin | |
| Expense/Bed | 857748.644 | +0.0985 | Higher Expense/Bed increases predicted margin | |
| State Peer Margin | 0.032 | +0.0578 | Higher State Peer Margin increases predicted margi | |
| Bed Utilization Value | 451648.909 | -0.0140 | Lower Bed Utilization Value decreases predicted ma | |
| Log(Beds) | 4.771 | +0.0092 | Higher Log(Beds) increases predicted margin |
Turnaround: 48%Turnaround possible (48%) but uncertain. Margin improvement depends on improving Revenue/Bed.
Suburban Community Hospit
Archetype
47.5%
Distress Risk
$2.8M
RCM Opportunity
D
Opportunity Grade
0.6%
Projected Margin
Cluster: Suburban Community Hospital
Percentile within cluster: P22. 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%
FL distress rate: 30.3%
Model AUC: 0.629
| Factor | Value | Contribution | Direction |
|---|---|---|---|
| Medicaid Day Pct | 0.037 | -0.052 | ▼ risk |
| Revenue Per Bed | 838904.542 | +0.044 | ▲ risk |
| Net To Gross Ratio | 0.297 | -0.032 | ▼ risk |
| Medicare Day Pct | 0.235 | -0.016 | ▼ risk |
| Occupancy Rate | 0.538 | -0.012 | ▼ risk |
| Beds | 118.000 | -0.004 | ▼ risk |
RCM Improvement Opportunity
Total (risk-adjusted): $2.8M
Current margin: -2.2%
Projected margin: 0.6%
Grade: D
Comps: 123
Gap analysis vs P75 peers with 60% closure assumption. Confidence-weighted by lever implementation difficulty.
| Lever | Current | Benchmark | Gap | Impact | Confidence | Timeline |
|---|---|---|---|---|---|---|
| Occupancy Improvement | 0.538 | 0.765 | 22.6% | $1.5M | 55% | 24mo |
| Net-to-Gross Ratio Improvement | 0.297 | 0.361 | 6.4% | $745K | 65% | 18mo |
| Payer Mix Optimization | 0.728 | 0.765 | 3.7% | $550K | 50% | 24mo |
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 | 25.6 | [25.0, 75.0] | P31 | 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. |