ML Analysis — ENCOMPASS HEALTH REHABILITATION HOSP
CCN 113034 | 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.
46
/ 100 (C)
Financial Health16/25
RCM Upside5/25
Market Position11/20
Demand Defensibility6/15
Operational Efficiency9/15
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)
4.0%
R²=0.34 | n=4,907 | Grade B | Actual: 29.4%
Ridge regression trained on 4,907 HCRIS hospitals. 90% CI: [-24.3%, 32.3%]. P72 nationally.
| Driver | Value | Effect | Explanation | |
|---|---|---|---|---|
| Expense/Bed | 392755.500 | +0.1558 | Higher Expense/Bed increases predicted margin | |
| Revenue/Bed | 556262.460 | -0.1428 | Lower Revenue/Bed decreases predicted margin | |
| Net-to-Gross | 0.698 | +0.0370 | Higher Net-to-Gross increases predicted margin | |
| Reimbursement Quality | 0.125 | +0.0220 | Higher Reimbursement Quality increases predicted m | |
| Occupancy × Net-to-Gross | 0.475 | +0.0215 | Higher Occupancy × Net-to-Gross increases predicte |
Rural/Critical Access
Archetype
50.7%
Distress Risk
$7.7M
RCM Opportunity
A
Opportunity Grade
57.2%
Projected Margin
Cluster: Rural/Critical Access
Percentile within cluster: P99. 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%
GA distress rate: 44.4%
Model AUC: 0.629
| Factor | Value | Contribution | Direction |
|---|---|---|---|
| Net To Gross Ratio | 0.698 | +0.147 | ▲ risk |
| Occupancy Rate | 0.680 | -0.144 | ▼ risk |
| Medicare Day Pct | 0.811 | +0.083 | ▲ risk |
| Medicaid Day Pct | 0.010 | -0.079 | ▼ risk |
| Revenue Per Bed | 556262.460 | +0.060 | ▲ risk |
| Beds | 50.000 | -0.013 | ▼ risk |
RCM Improvement Opportunity
Total (risk-adjusted): $7.7M
Current margin: 29.4%
Projected margin: 57.2%
Grade: A
Comps: 89
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 | 0.179 | 0.692 | 51.3% | $7.7M | 50% | 24mo |
| Occupancy Improvement | 0.680 | 0.684 | 0.4% | $24K | 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. |