ML Analysis — ENCOMPASS HEALTH REHABILITATION HOSP
CCN 103040 | 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.
51
/ 100 (C)
Financial Health11/25
RCM Upside13/25
Market Position15/20
Demand Defensibility7/15
Operational Efficiency5/15
Entry Multiple: 8.0x – 10.0x
Est. MOIC: 1.9x
Risk Factors:
- Heavy Medicare dependence (>55%)
Catalysts:
- Limited competition supports pricing power
Margin Prediction (Trained Ridge Model)
2.4%
R²=0.34 | n=4,907 | Grade B | Actual: 4.6%
Ridge regression trained on 4,907 HCRIS hospitals. 90% CI: [-25.9%, 30.7%]. P68 nationally.
| Driver | Value | Effect | Explanation | |
|---|---|---|---|---|
| Revenue/Bed | 324052.040 | -0.1752 | Lower Revenue/Bed decreases predicted margin | |
| Expense/Bed | 309008.640 | +0.1661 | Higher Expense/Bed increases predicted margin | |
| State Peer Margin | 0.032 | +0.0578 | Higher State Peer Margin increases predicted margi | |
| Net-to-Gross | 0.707 | +0.0379 | Higher Net-to-Gross increases predicted margin | |
| Bed Utilization Value | 190655.056 | -0.0226 | Lower Bed Utilization Value decreases predicted ma |
Rural/Critical Access
Archetype
52.5%
Distress Risk
$6.8M
RCM Opportunity
A
Opportunity Grade
32.6%
Projected Margin
Cluster: Rural/Critical Access
Percentile within cluster: P77. 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%
FL distress rate: 30.3%
Model AUC: 0.629
| Factor | Value | Contribution | Direction |
|---|---|---|---|
| Net To Gross Ratio | 0.707 | +0.151 | ▲ risk |
| Medicaid Day Pct | 0.006 | -0.083 | ▼ risk |
| Revenue Per Bed | 324052.040 | +0.074 | ▲ risk |
| Occupancy Rate | 0.588 | -0.059 | ▼ risk |
| Medicare Day Pct | 0.646 | +0.055 | ▲ risk |
| Beds | 75.000 | -0.010 | ▼ risk |
RCM Improvement Opportunity
Total (risk-adjusted): $6.8M
Current margin: 4.6%
Projected margin: 32.6%
Grade: A
Comps: 120
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 | 0.348 | 0.719 | 37.1% | $5.6M | 50% | 24mo |
| Occupancy Improvement | 0.588 | 0.775 | 18.6% | $1.2M | 55% | 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 | 25.0 | [25.0, 75.0] | P0 | 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. |