ML Analysis — ENCOMPASS HEALTH REHABILITATION OF P
CCN 103048 | 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.
48
/ 100 (C)
Financial Health11/25
RCM Upside14/25
Market Position12/20
Demand Defensibility6/15
Operational Efficiency5/15
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)
3.6%
R²=0.34 | n=4,907 | Grade B | Actual: 3.4%
Ridge regression trained on 4,907 HCRIS hospitals. 90% CI: [-24.7%, 31.9%]. P71 nationally.
| Driver | Value | Effect | Explanation | |
|---|---|---|---|---|
| Revenue/Bed | 429598.850 | -0.1605 | Lower Revenue/Bed decreases predicted margin | |
| Expense/Bed | 415143.325 | +0.1530 | Higher Expense/Bed increases predicted margin | |
| State Peer Margin | 0.032 | +0.0578 | Higher State Peer Margin increases predicted margi | |
| Net-to-Gross | 0.614 | +0.0275 | Higher Net-to-Gross increases predicted margin | |
| Occupancy × Net-to-Gross | 0.452 | +0.0198 | Higher Occupancy × Net-to-Gross increases predicte |
Rural/Critical Access
Archetype
48.0%
Distress Risk
$6.3M
RCM Opportunity
A
Opportunity Grade
40.1%
Projected Margin
Cluster: Rural/Critical Access
Percentile within cluster: P91. 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: Elevated
National distress rate: 49.3%
FL distress rate: 30.3%
Model AUC: 0.629
| Factor | Value | Contribution | Direction |
|---|---|---|---|
| Occupancy Rate | 0.736 | -0.196 | ▼ risk |
| Net To Gross Ratio | 0.614 | +0.109 | ▲ risk |
| Medicaid Day Pct | 0.009 | -0.080 | ▼ risk |
| Revenue Per Bed | 429598.850 | +0.068 | ▲ risk |
| Medicare Day Pct | 0.686 | +0.062 | ▲ risk |
| Beds | 40.000 | -0.015 | ▼ risk |
RCM Improvement Opportunity
Total (risk-adjusted): $6.3M
Current margin: 3.4%
Projected margin: 40.1%
Grade: A
Comps: 78
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 | 0.305 | 0.690 | 38.5% | $5.8M | 50% | 24mo |
| Occupancy Improvement | 0.736 | 0.818 | 8.1% | $537K | 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 | 26.2 | [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. |